6.7. EQUIPMENT AND TECHNOLOGY LOCALIZATION

THE COMPANY’S STRATEGIC GOAL WITH REGARD TO EQUIPMENT AND TECHNOLOGY LOCALIZATION IS TO ENSURE IMPLEMENTATION OF ITS STRATEGIC PRIORITIES REGARDING EFFICIENT DEVELOPMENT OF ITS RESOURCE BASE WITH A MAXIMUM RETURN FOR ALL SHAREHOLDERS AND MINIMUM IMPACT ON THE ENVIRONMENT.

INDUSTRIAL AND SHIPBUILDING CLUSTER IN THE FAR EAST

In the mid-2015 a Rosneft Group company – JSC STS (the company engaged in up-to-date shipbuilding technologies) acquired 75 % minus 2 shares of JSC DCSS, constructing the largest civil shipbuilding yard in Russia — the Zvesda shipbuilding complex, estimated annual capacity of
330 thousand tons of metalwork.

Zvezda complex shall not only be a modern shipbuilding facility, but a crucially new efficient industrial cluster in the Far East of Russia.

Zvezda shipbuilding complex shall be the center of marine engineering and shipbuilding materials manufacturing. Zvezda is a unique complex due to revolutionary engineering solutions applied at the design state, allowing it to become one of the most up-to-date shipbuilding facilities in the world.

To provide for the facility operation Rosneft signed for all the shipbuilding orders placement at JSC DSCC in June 2014. Under the agreement at the Easter Economic Forum in September, 2015 Rosneft and JSC DCSS signed a contract for a pilot order placement for four Icebreaker-7 procurement ships. PJSC Sovkomflot also signed an agreement for all the shipbuilding orders placement at JSC DSCC in June, 2014. Gazprom and Novatek signed agreements for all the shipbuilding orders placement at JSC DSCC in January 2016.

To raise efficiency of the constructed shipbuilding yard, getting the required technologies and localize manufacturing Rosneft cooperates with a wide range of process partners — world leaders in the key shipbuilding segments, including General Electric. The Company aims at 70 % localization in Russian territory under all shipbuilding projects, including equipment procurement and works performed by the Zvezda complex.

In order to attract foreign technological competences, in 2015 we signed a cooperation agreement in terms of design and construction of service vessels and offshore drilling rigs with a number of Russian and foreign process partners, and started designing of promising models of vessels.

RESULTS OF THE APPLIED ENGINEERING AND SAPPHIRE TRAINING CENTER IN A JOINT VENTURE WITH GE IN 2015. PLANS FOR 2016

In 2015, General Electric and the Applied Engineering and Sapphire Training Center established a joint venture in St. Petersburg.

OIL AND GAS PROJECTS

Sapphire Center provides engineering support to projects of construction of compressor stations and gas turbine power plants at Srednebotuobinskoye oil and gas condensate field and Kuyumbinskoye oil and gas fields.

In 2015 the Sapphire center performed analysis of advantages and disadvantages of APG pumping technologies technologies for reservoir pressure maintenance systems for Taas-Yuryakh Neftegazobodycha. Then the best technology was selected and compressor equipment procurement was performed.

The Sapphire center specialists also performed technical analysis and issued recommendations for selecting power generation for the projects at Srednebotuobinskoye and Kuyubinskoye fields.

SAPPHIRE SEA PROJECTS

As part of the joint shipbuilding projects of Rosneft and GE for the development of the Zvesda shipbuilding complex in Vladivostok, Sapphire Center is designing basic solutions for propulsion systems for ships and rudder propellers, as well as programs for potential localization of rudder propellers and ship electrical equipment in Russia.

In order to promote the cooperation of Rosneft and GE in the field of hydrocarbon production technologies, Sapphire developed options for placing an industrial site for production wellhead equipment and Christmas trees, and a list of equipment was made for localization and analysis of the main production facilities.

Sapphire is directly engaged in a pilot project of Rosneft and GE for remote monitoring and control of equipment at the Ryazan Refinery.

Pursuant to the agreement between Rosneft and General Electric, in 2016 we plan to perform testing of 20 electric submersible pumps at RN-Yuganskneftegaz, RN-Stavropolneftegaz and Samotlorneftegaz fields. In the process of commercial testing Sapphire rendered full range of services within the project’s lifecycle, including preparation, potential wells selection, consulting in terms of starting-up and termination of electric submersible pumps and issuing reports on testing results.

ORGANIZATION AND DELIVERY OF TECHNICAL TRAINING

ONE OF THE PRIORITIES OF THE SAPPHIRE CENTER IS TRAINING AND RETRAINING OF HIGHLY QUALIFIED PERSONNEL FOR THE NEEDS OF ROSNEFT.

In 2015, in order to support the Company’s localization projects, Sapphire Center delivered five technical trainings in various fields including shipbuilding, energy efficiency, gas monetization, downhole operations, and drilling. More than 80 employees of the Central Staff and the Group companies took part in the training, which was in Moscow and St. Petersburg. In the feedback questionnaires, the participants commented the trainings and noted that the knowledge gained could be applied in the implementation of the Company’s projects.

In 2016-2017, the Center plans to train more than 250 employees, managers, and technical specialists of Rosneft under 14 technical programs designed to meet the most urgent tasks of the Company.

DEVELOPMENT OF AN INDUSTRIAL CLUSTER OF OIL SERVICE ENTERPRISES FOR OFFSHORE PROJECTS IN THE ARCTIC ZONE OF THE RUSSIAN FEDERATION

In 2015, pursuant to the Russian President Vladimir Putin’s resolution No. Pr-1553 dated July 11, 2013, and the Russian Government No. 243-r dated February 18, 2015, Rosneft Group completed the acquisition of a 100 %-one block of shares of JSC Shipyard 82, which located in the Roslyakovo residential district of Murmansk.

On the territory of Shipyard 82 and the adjacent land areas and water areas, in addition to the coastal support base there will be an industrial oil service cluster consisting of the following:

  • multipurpose dry docks with caisson gates for the production of concrete foundations of oil and gas production platforms and refineries for production of liquefied natural gas of coastal location;
  • platform for modular assembly of topsides;
  • plant for wellhead reinforcement production;
  • equipment assembly and production shop for elimination of accidental oil spills;
  • coastal infrastructure for docking topsides and concrete foundations of drilling platforms.

In 2016 we are to develop new substantiation of investments for the above industrial platform development with account of continuing ship repair operations of the plant and development of new oil service production units with participation of process partners.

The Zvezda ship building complex shall be the key facility of the new naval mechanical engineering and shipyard materials manufacturing plants