Breakdown of Oil Products Supplies by Regions
The marketing policy of the Company is inextricably connected with geographical aspects of the arrangement of refineries and also with economic aspects of regional development.
The major regional market for Gazprom Neft’ petroleum products is the West Siberian region which accounted for about 37 percent of the Company’s overall domestic sales in 2006. This is explained by the geographical location of the Company’s main oil refining facility in the region – the Omsk Oil Refinery.
The following factors ensure the competitiveness of Omsk Refinery oil products in the regional markets:
- the short “SibNeft’-Omsk Refinery fields” transport shoulder, and the resulting low transport costs;
- the high quality of oil without mixture means lower processing costs and output of better oil products;
- the capacity of the refinery and the essential share of secondary processes ensure intensive processing.
Oil products produced at Omsk Refinery are also traded on distant markets due to the oil products pipeline that goes both east and west from the Refinery. The Refinery uses railways to convey high-quality fuels and petrochemicals, thus preventing blending in pipeline (see Export section).
All these factors allow the Company to sell oil products with maximum efficiency in the regional markets. As of the end of 2006, the company’s marketing subsidiaries were present in key regions of Western and Eastern Siberia, such as Omsk, Tyumen, Kemerovo, Sverdlovsk, Tomsk, Novosibirsk regions, Krasnoyarsk territory, Altai and Noyabrsk. In the Central and North-West Regions – Yaroslavl, Kaluga, Nizhny Novgorod, Leningrad and Moscow Regions.
Expanding Distribution Network
In 2006 68 owned and rented retail fuel stations were operating in the Moscow region. A further 24 stations operate in Moscow as franchisees.
The award to Gazprom Neft’ in 2006 of lease rights under the tender for 30 land lots allocated for construction of retail fuel stations in St. Petersburg was a key event that contributed considerably to strengthening the Company’s presence in the north-western region.
The Gazprom Neft’ –owned retail network in Russia includes 811 retail fuel stations offering high quality products to their customers. These retail fuel stations are built with application of the latest innovative technologies, and offer everything that may be needed while travelling. Besides, in addition to traditional grades of petrol, CNG/LNG automotive fuel is offered at some of the Company’s retail fuel stations. Gazprom Neft’ intends to expand its own network of retail fuel stations on the basis of international expertise and world market trends, including enhanced versatility and wider range of services provided at retail fuel stations.
The Company’s interests in oil products sales extend beyond the Russian market place. Creation of subsidiary sales outlets outside Russia is one of the Company’s top priorities. The setting up of a subsidiary company, Gazprom Neft’ Asia, in Kyrgyzstan was the first step towards realising this priority. As an operator of 78 retail fuel stations Gazprom Neft’ Asia now has a strong footing in the Kyrgyz market and plans to become an important player among oil product suppliers in the Central Asian market.
Strategically, Gazprom Neft’ intends to increase its share in the Russian and international markets on the basis of regular investments in modernisation of its oil processing facilities and expansion of its retail network in various regions in Russia.
