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MESSAGE for Shareholders and investors

Dear Shareholders and Investors!

Over the last few years corporate governance has been one of the fastest growing areas at public companies and has taken on even more importance given the deterioration in macroeconomic indicators. All other things being equal, the quality of company management and observing the interests of investors and shareholders take centre stage.

However, simply complying with the law is not sufficient. The trends and priorities we see on the market require a stronger role and expanded powers for the Board of Directors, increased information openness and financial transparency of companies as well as greater freedom for shareholders to express their will and take part in corporate events.

The management of a complex multi-level structure such as Gazprom Neft, which includes geological exploration, production, refining and sales both within the country and abroad, requires a professional team of managers and a highly efficient system of corporate governance and control. The Company currently has a well-defined and clear organisational structure with a high level of interaction between governing bodies and clear delineation of management and control duties to guarantee sustained growth in the Company’s value for shareholders in the long term.

In 2015, the Board of Directors focused on matters involving strategic and investment planning, monitoring the activities of executive bodies and assessing the results of the Company’s financial and economic performance, the effectiveness of internal control systems as well as corporate governance.

The Board of Directors held 68 meetings in the reporting year, including nine in person, which is consistent with the best practices of the leading Russian companies in the oil industry. I would like to note that the Board of Directors meets in person to consider the most important issues concerning the Company’s development strategy, financial and business performance results, risk management and the approval of major corporate events.

Adhering to the recommendations of the Code of Corporate Governance, the Board of Directors annually reviews an evaluation of corporate governance at the Company and conducts a self-assessment of its own activities.

In 2015, the General Meeting of Shareholders approved new versions of the Company’s Charter and the Code of Corporate Governance to reflect the main principles recommended by the Central Bank of the Russian Federation for public companies. In this regard, I would like to note the distinctive feature of Gazprom Neft having a single major shareholder in PJSC Gazprom. With a 95.68% stake in the Company, PJSC Gazprom fully determines the members of the Board of Directors and the distribution of the balance of power between the different parties involved in corporate relations.

We hope that the experience and high level of professionalism of Board members combined with an effective team of managers will enable Gazprom Neft to successfully make it through another difficult year economically and meet all the Company’s objectives.