Tatneft' PAO : An Annual General Meeting of the PJSC TATNEFT’s Shareholders Was Held

The annual general meeting of the PJSC TATNEFT's shareholders was held in Almetyevsk (Republic of Tatarstan) on June 24.

Nail U. Maganov, General Director of PJSC TATNEFT, presented to the audience the report on the results of PJSC TATNEFT's operations in 2015. He outlined in his speech the operations results of 2015 and perspective plans.

The year 2015 was for TATNEFT, as well as for all the producers of hydrocarbons, difficult and ambiguous. However, the Company met all the production targets, ensuring virtually qualitative growth of all the financial and economic performance results in all the business segments. The Joint Stock Company's strategy was aimed at reducing the level of costs, improving the efficiency and increasing the production volume, expanding high-viscosity oil (HVO) production and development of refining processes at the TANECO Complex.

According to the Company's General Director, the production volume of the TATNEFT Group of Companies amounted to 27.249 million tonnes of oil in 2015. Over 44 % of the oil volume was produced through application of tertiary and hydrodynamic methods of enhanced oil recovery.

To maintain a high level of crude oil production and availability of reserves the Company increased the production drilling volume with the meterage amounting to 738.5 thousand meters in the reporting year. 352 new production wells were commissioned.

The production of raw bitumen at Ashalchinskoye field amounted to 376,000 tonnes with the daily output amounting to 1,200 tonnes by the end of the year. The total number of wells drilled since the beginning of the deposit development amounted to 520 wells, while the production volume exceeded 1 million 200 thousand tonnes of HVO. The current production level exceeded 2 thousand tonnes of oil per day. Development of HVO is based on the latest scientific achievements with application of the latest environmentally friendly technologies.

According to Nail Maganov, the main driver for the Company's growth is maximum widespread introduction of innovations in all the areas of the Company's operations: crude oil production, refining, marketing development through retail chains, petrochemical complex, mechanical engineering and energy.

Modern technologies allow TATNEFT having one of the highest associated petroleum gas utilization level in the industry accounting for more than 96.7%.

The Company continues implementation of a comprehensive resource conservation program, which involves the structural divisions of TATNEFT and companies providing maintenance services. The Company's savings in terms of the standard reference fuel amounted to about 60 thousand tonnes in the reporting year.

The tools of 'lean production', project and process management, production automation are being actively introduced.

The productivity enhancement program adopted in 2013 is being successfully executed. Since the beginning of its implementation the NGDU-wide output amounted to 23.7 million rubles per person, which is 10% more than the base year level.

The General Director of PJSC TATNEFT mentioned the Company's investment activity results in his report. The total investment amount for TATNEFT was RUB 97.2 billion in 2015. Like in earlier years, the bulk (over 60%) was spent on the development of the oil and gas production sector. RUB 24.5 billion were spent for the construction of the TANECO Complex. Significant funds were allocated for the expansion of the Company's retail and marketing network and modernization of the Company's power generation sector.

During the reporting period the TANECO Complex processed over 8.6 million tonnes of crude oil produced by the TATNEFT Group of Companies. The Company put into commercial operation a unique facility of base oils production, is expanding the range of the petroleum products output. The conversion depth exceeded 73%, while the yield of light oil products accounted for more than 70%. Production of Euro 5 diesel fuel reached 1.4 million tonnes and by the results of the All-Russian contest was among 100 best goods of Russia in 2015.

Largely due to its own refinery, TATNEFT retained the financial stability. Implementation of the TANECO project allowed TATNEFT shaping as a modern engineering company capable of building refineries on a 'turnkey' basis. The projects of this kind are the economic diversification powerhouse, the basis for new competitive production works, points of the human capital increase not only for a particular company or a separate republic, but also for the entire regions and contribute to ensuring the economic and national security of the whole country.

According to Nail Maganov, good results were obtained by the Company's tire manufacturing Complex, where they manufactured 12 million tires in 2015, including 875,000 highly sought-after solid steel cord tires. Together with Italian partners the Company established a new production facility to rehabilitate solid steel cord truck tires, enabling to use the permissible maximum mileage resource.

Special attention is paid at TATNEFT to ensuring social well-being, decent standards of living for the employees, as well as creation of conditions for their professional development. All the commitments set up in the Company's 2015 Collective Agreement were met.

Defining the future prospects of the PJSC TATNEFT's development, Nail Maganov pointed out that the Company's strategy was focused on increasing the Company's shareholder value in all the areas of the integrated business. TATNEFT determined doubling of the current Company's value as its goal for the next decade.

The block of field development and crude oil production shall ensure crude oil production at the 30 million tonnes level by 2025. At the same time the tasks are assigned to reduce the level of operating costs by at least 10% and improve the efficiency of investments.

In the field of refining our efforts will be aimed at the construction completion of the TANECO's Complex 1st stage to the full extent and the construction of the 2nd stage.

In the course of the meeting the shareholders and the invited persons were presented reports by professionals of the TATNEFT Group of Companies. Azat Khabibrahmanov, were Head of NGDU 'Bavlyneft' provided information on the implementation of strategic objectives based on the internal benchmarking and application of best practices in the operation of the oil and gas production division. According to the 'Exploration and production' business-line, which states the objective to ensure crude oil production at the level of not less than 30 million tons per year, TATNEFT forcasing to increase EBITDA by 60% and reduce operating costs by 10%.

There were also reports presented by Leonid Alekhin, General Director of JSC TANECO on the results of operations and development of the TANECO refinery complex; Ravil Gareev, Head of Department for Industrial, Environmental and Occupational Safety - Deputy Chief Engineer of PJSC TATNEFT on solving the problems of improve environmental friendliness of the production activities and compliance with industrial safety regulations; Rifdar Khamadyarov, Head of the Personnel Department provided information on improving the training of personnel in order to enhance the Company's competitiveness.

Results of the Shareholders' Meeting

The shareholders' meeting approved the annual report for 2015, annual financial statements and the profit distribution for the financial year.

The shareholders also made a decision on the dividends payment. The dividend will be paid at a rate of 1,096 per cent of the share nominal value (10 rubles 96 kopecks) on the preferred and ordinary shares of PJSC TATNEFT. July 8, 2016 was fixed as the date for determining the persons entitled to receive the dividends. The deadline for payment of the dividends was determined under the applicable law. 30 percent of the Company's net profit will be allocated for the dividend payment based on the results of 2015.

Board of Directors Was Formed

The following persons were elected to the Board of Directors: Nail Ulfatovich Maganov, General Director of PJSC TATNEFT; Gerecs Laszlo, Independent Director; Yuri Lvovich Levin, Independent Director; Rene Steiner, Independent Director; Radik Raufovich Gaizatullin, Minister of Finance of the Republic of Tatarstan; Nail Gabdulbarievich Ibragimov, First Deputy General Director for Operations - Chief Engineer of PJSC TATNEFT; Renat Khaliullovich Muslimov, Consultant to President of the Republic of Tatarstan on the development of oil and gas fields; Rafail Saitovich Nurmukhametov, Head of NGDU 'Leninogorskneft'; Rinat Kasimovich Sabirov, Assistant to President of the Republic of Tatarstan; Valery Yurievich Sorokin, General Director of PJSC 'Svyazinvestneftekhim'; Shafagat Fakhrazovich Takhautdinov, Assistant to President of the Republic of Tatarstan on the oil industry issues and Advisor to Chairman of the Board of Directors of PJSC TATNEFT; Rustam Khamisovich Khalimov, Deputy General Director of PJSC TATNEFT on Crude Oil Exploration and Production; Azat Kiyamovich Khamaev, Minister of Land and Property Relations of the Republic of Tatarstan; Rais Salikhovich Khisamov, Deputy General Director - Chief Geologist of PJSC TATNEFT.

Rustam Minnikhanov, President of the Republic of Tatarstan, was appointed as the State representative to the PJSC TATNEFT's Board of Directors.

Audit Commission was formed composed of:

Kseniya Gennadyevna Borzunova - Head of the Economics, Privatization and Strategic Planning Office of Minzemimuschestvo (Ministry of Land Property) of the Republic of Tatarstan; Ranilya Ramilevna Gizatova, Chief of Investments Office of NGDU 'Elkhovneft'; Guzal Rafisovna Gilfanova, Deputy Head of the Auditing Office of PJSC TATNEFT; Oleg Mikhailovich Matveev, Chief Accountant of PJSC TATNEFT's Crude Oil and Petroleum Products Sales Department; Taskirya Gaptenurovna Nurmukhametova - Chief Accountant of OOO 'Sistema-Service' Management Company; Liliya Rafaelovna Rahimzyanova, Head of Oil Production and Oil Refining Office of the Ministry of Trade and Industry of the Republic of Tatarstan; Nazilya Rafisovna Farkhutdinova, Deputy Director for Finance and Economics of OOO 'Tatneft-RemServis'; Tatyana Viktorovna Tsyganova, Deputy Chief Accountant of PJSC TATNEFT's Accounting and Reporting Department.

Saria Kashibulhakovna Yusupova, Office Deputy Head of the Ministry of Finance of the Republic of Tatarstan, was appointed to the Revision Commission as Representative of the State.

ZAO 'PricewaterhouseCoopers/Audit' was approved as Auditor of PJSC TATNEFT for one year's period to perform a mandatory audit of the PJSC TATNEFT's annual financial statements prepared in accordance with the Russian Accounting Rules.

At the annual meeting the shareholders of PJSC TATNEFT approved a new Articles version of the Public Joint Stock Company, updated versions of the Provision on the General Meeting of Shareholders, Provision on the Board of Directors and other internal documents.

The newly formed Board of Directors elected R.N. Minnikhanov, President of the Republic of Tatarstan, as Chairman of the Board of Directors.

Right after the completion of the General Meeting of Shareholders there was a meeting of the Board of Directors of PJSC TATNEFT in the new approved composition held

The Board of Directors considered the budget execution results of PJSC TATNEFT for five months in 2016 and approved the budget for July and the third quarter of the current year.

The Board of Directors took decisions regarding Committees under the Board of Directors of PJSC TATNEFT.

The meeting adopted the work plan of the Board of Directors for the second half of 2016 and discussed a number of other issues of the Company's activities.

Forward-looking statements: These materials contain certain statements about future events and expectations that are forward-looking in nature. Any statement in these materials that is not a statement of a historical fact is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements expressed or implied by such forward-looking statements to differ. PJSC TATNEFT shall not assume any obligations to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements.