4.7.Raising the Operational Efficiency
Transneft constantly puts in effort to raise the operational efficiency of Transneft subsidiaries and the Company as a whole.
In pursuance of Executive Orders of the Government of the Russian Federation No. 3984p-P13 dated 24 June 2015, the process of raising operational efficiency and cutting costs was formalised using regulatory documents that helped form the long-term Programme for Operational Efficiency Improvement and Cost Cutting (the OEICC Programme).
|Keeping within the acceptable accident rate per 1000 km of the line||0.065|
|Preventing (precluding) security incidents at protected facilities||0.992|
|In-kind productivity of labour||17.4 mln tkm/person|
|Standard inventory and stock (the RON plan)||Not more than 5 months|
|Reduction of specific electricity consumption for the main type of business activity under comparable conditions||0.5% annually|
|Operating expenses reduction percentage||At least 2% annually|
|Personnel turnover rate||No more than 5% at the end of each year overall|
The first line comes down to ensuring reliability and fullness of oil and petroleum products supply to the domestic market and export routes, including due to:
- introducing innovative technologies and equipment;
- upgrading fixed assets;
- ensuring import substitution and setting up local manufacture to replace imported products in the Russian Federation;
- ensuring anti-terror security of Transneft’s facilities.
The main indicator of the KPI system characterising the Company’s activity in the given area is the Integrated Indicator of Trunk Pipeline System Reliability, Environmental and Industrial Safety. It includes the following indicators:
- Specific Trunk Pipelines Accident Rate;
- Reduction of Specific Air Pollutant Emissions During Oil and Petroleum Products Transportation Via Trunk Pipelines.
The second line comes down to a more efficient use of resources, due to:
- more efficient fixed assets management;
- higher efficiency in managing the maintenance and repair of equipment, buildings and facilities;
- more efficient energy consumption;
- improvement of the organisational and functional structure;
- optimisation of the remuneration and personnel motivation system;
- higher efficiency in managing the working capital;
- reduced operating expenses;
- use of modern technologies and innovations.
The main indicator of the KPI system characterising the Company’s activity in the given area is the Integrated Operational Activity Efficiency Indicator. It includes the following indicators:
- Amount of Dividends;
- Operating Expenses Reduction Percentage;
- Annual Volume of Direct Purchases from SMEs;
- Reduction of Specific Electricity Consumption during Oil Transportation over Trunk Pipelines under Comparable Conditions;
- Raising Labour Productivity in Oil and Petroleum Products Transportation.
In 2019, Transneft achieved 100% of the target KPI values measuring the implementation of the OEICC Programme.
On 27 November 2019, the Company’s Board of Directors approved the Programme for Operational Efficiency Improvement and Cost Cutting up to 2024 (Minutes No. 20).