NIS Future at Work in 2015
Table of contents: 2 About NIS 3 Business Segments 8 Sustainable Development 12
ABOUT NIS
NIS j.s.c. Novi Sad 4 one of the largest vertically integrated energy companies in South-East Europe International company which operates in 10 countries The largest investor in Serbia: 30.32 billion RSD in 2015 The largest retail network, more than 400 petrol stations in Serbia and in the region Two retail brands: NIS PETROL and premium brand of petrol stations - GAZPROM Modern NIS refinery plant in Pancevo produces fuel of Euro 5 NIS has launched on the market the high octane gasoline of the highest quality under the brand Own production of electricity since 2014 quality G drive
NIS Today Key parameters in 2015 5 1,577 domestic oil and gas output in thousand tons of oil equivalents 3,281 oil refining volume excluding third parties in thousands of tons EBITDA billion RSD 7.6 NIS paid to shareholders as dividends billion RSD 14.6 Net profit billion RSD
NIS Today 6 The core business activities of the company are as follows: oil and gas exploration, production and refining Sales of a wide range of petroleum and gas products Implementation of projects in the field of petrochemistry and energy NIS owns two refining units in Serbia - in Pancevo and Novi Sad, and the majority of oil and gas fields are located in Vojvodina. Beside production capacities in Serbia, NIS owns production capacities in Angola and oilfield services in Turkmenistan as well. NIS has subsidiaries in Bosnia and Herzegovina, Bulgaria, Hungary and Romania, and the representative offices in Russia, Belgium, and Croatia.
Business Segments
2015 Year of Operational Efficiency 8 The implementation of projects aimed at increasing efficiency in all business segments is one of the strategic priorities of NIS. In the previous period, large investment projects were executed, which significantly contributed to the increase of business efficiency. These projects include start-up of the modern hydrocracking complex in Pancevo Oil Refinery, introduction of cutting-edge equipment and technologies in the segment of oil and gas exploration, modernization of the retail network, organizational restructuring. In 2015 the measures to increase efficiency had the effect on EBITDA of 10.6 billion RSD, By 5,3 times exceeding the plan
Oil and Gas Exploration and Production Exploration and Production 9 NIS is the only company in Serbia pursuing oil and gas exploration and production and geothermal power generation. The total oil and gas output in 2015 was 1,577 thousand tons of oil equivalent Hydrocarbon reserves marked 8% year-on-year increase New environmentally friendly drilling by implementing dry location system Introduction of one of the state-of-the-art production well automation systems New gas purification unit Geological explorations of unconventional gas Development of an elaborated geological model of the Pannonian basin
Oil and Gas Exploration and Production in the Balkans Regional expansion 10 Romania NIS PARTNERS: East West Petroleum, a Canadian company focused on conventional and non-conventional oil resources. MOESIA OIL AND GAS, an Irish exploration and production company focused on South-East Europe. Bosnia and Herzegovina NIS IS A PART OF A JOINT VENTURE FOR EXPLORATION AND PRODUCTION JADRAN-NAFTAGAS. Hungary NIS MAIN PARTNER IS RAG, one of the major European gas storage operators, specialized in exploration and production in Austria, Germany, Hungary and Poland. North Europe Bosnia and Herzegovina Hungary Serbia Bulgaria Romania ZETA PETROLEUM, a British oil and gas exploration company focused on Romania and East Europe. Services Sales and Exploration and Export Distribution Production Refining of Fuel Energy
Refining NIS' refining complex 11 PANCEVO PRODUCTION UNIT In 2015, the increase in crude oil refining and semi-finished products reprocessing volumes continued, and they amounted to 3.28 million tons. Pancevo oil refinery continued producing Euro 5 quality fuel and the new fuel type with a higher octane number Euro BMB 98. Activities on the implementation of the "Bottom of the Barrel" project marked the year 2015. Investment works on the bitumen plant were conducted. In September, FCC complex and SARU plant underwent further modernization. The diesel deparaffinization unit was started-up at the beginning of the year. The continued modernization has facilitated even higher production white petroleum products, such as gasoline, Diesel and jet fuel as per Euro 5 standard, as well as an improved energy efficiency of NIS refinery processing.
Sales and Distribution 12 NIS market share in 2015 remained stable as a result of an adequate market approach and flexible response to the changing environment. The financial results of the Block are 38% year-on-year higher. NIS launched new fuel on the market, G Drive 100, high octane gasoline of improved performances. NIS' share in the total petroleum products market in Serbia in 2015 was 77%. The main reasons of NIS success on the market Modernized refining unit in Pancevo Expanded portfolio of European-quality products Continued NIS Petrol and GAZPROM retail network development Company's marketing campaigns New loyalty program Going the Same Way introduced Super kartica loyalty program
Sales and Distribution Two brands: NIS Petrol and GAZPROM 13 NIS Petrol station network is the largest network in Serbia. It is recognized for Euro 5 quality fuel, modern appearance of petrol stations, and high-quality service. NIS petrol stations in 2015, the same as the year before, were awarded the Best Buy Award by the customers for delivering the most value for money. GAZPROM brand belongs to the premium market segment. The facilities selling Euro quality fuel are open 24 hours a day, they have stores with modern conveniences, furnished with cafe bars or restaurants with Internet access, spacious parking lots, and playgrounds. NIS received the "Best of Serbia" reward for GAZPROM Petrol stations. Overall in Serbia and the countries of the region NIS owns more than 400 petrol stations NIS Petrol GAZPROM SHOP PAYMENT USING NIS CARD CAFE EU-STANDARD FUEL AVAILABILITY WI-FI RESTAURANT EU-STANDARD FUEL PLAY- GROUND 24H
Sales and Distribution Bunkering of ships and aircraft fuelling 14 Bunkering NIS has five bunker stations for supplying ships with Euro diesel and lubricants in Novi Sad, Veliko Gradiste, Smederevo, Prahovo and Belgrade, located on the Danube, the major waterway in Serbia. The facilities equipped with the state-of-the art technical and environmentally-friendly equipment and high-quality fuel, provide a reliable supply for international and local vessels. Aircraft fuelling One of NIS' key activities is supplying aircraft with aviation fuel. The Company offers two types of aviation fuel: jet engine Jet A-1, which is produced in Pancevo refinery in compliance with the most rigorous standards, and aviation fuel Avgas 100LL, for piston aircraft engines, imported from world famous European producers.
Sustainable development
Sustainable development 16 To operate in accordance with the principles of sustainable development is one of NIS prime goals Despite the crisis in the oil and gas industry, NIS continues to strengthen partnerships with local governments, institutions and individuals, as well as to invest in the community in which it operates and talented individuals The basic principles of NIS s sustainable development are transparency in business, environment protection, investing in safety, health and development of employees, investing in society, its needs and values. Future that NIS is building doing business on the principles of sustainable development is the future of energy efficiency with the larger use of renewable sources, the future of compliance with the law and human rights, the future of the optimum use of available capacity and natural resources. NIS in 2015 won "World Finance Oil & Gas Award", awarded by the magazine "World Finance, as the best company in Eastern Europe in the field of sustainable development in the category of oil and gas industry. NIS is also a winner of "My Choice" in 2015, awarded by the Association "My Serbia" and the Serbian Chamber of Commerce, in the category of corporate social responsibility for the program "Together for the Community.
Occupational health and safety 17 Protection of people, assets and the environment, humane working conditions and responsible business are imperative to NIS development. Safe working conditions for all employees and environmental protection are the Company's absolute priorities. NIS thus declared the year 2016 to the year of health, safety and environment (HSE - Health, Safety, Environment). At the same time, NIS set an ambitious objective - to achieve "Target Zero in the next 10 years, which means no injuries or adverse impact on the environment from the work processes. 47% reduced LTIF lost time injury frequency 50% reduced RAR coefficient
Environmental protection 18 NIS expresses environmental responsibility through the relationship to the rational use of natural resources as well as reducing the impact on air, soil and waterways. Although the current NIS standards in the field of occupational safety exceed the legal obligations, the Company is continuously working to facilitate application of the world s best practices in this area. Engaged external contractors and associates must obey NIS standards. In 2015. 627 billion RSD invested in environmental projects Key NIS environmental projects started or completed in 2015 Rehabilitation of reservoir space Changing the heating system on the plant for chemical treatment of water Optimization of the cooling water system Building the system to optimize the furnaces in Refining Replacing the pump and the steam turbine of electromotor in Refining Installation of frequency converters on coolers motors Installation of reactiv power compensation system in Exploration and Production. Environmental protection is one of the main priorities and an integral part of the efficient management Strategy. Implementation of environmental projects aimed at equipment modernization and reduction of the release of polluted substances into the environmental media, remediation and reclamation of contaminated sites (historical pollution), monitoring the condition of the environment.
Human Resources 19 200 million RSD invested into employee training and development Employees from more than 20 countries worldwide International team 3,700 employees completed 2,500 training courses in 2015 almost 700 young people since 2012 have been offered a chance to work for NIS through the "NIS Chance" program
Human Resources 20 NIS sees investment into people as the basis for efficient business. A lot of effort Company invests into a continuous development of the existing human resources. NIS strives to provide its employees the opportunity to acquire high qualifications that correspond to European and international standards, while the system of tangible and intangible awards recognizes way to promote and valorise it. The Company pays a lot of attention to young people and its collaboration with universities educating staff that NIS needs. OUR VALUES: 1 2 3 4 Professionalism Initiative and responsibility Positive attitude and cooperation Shared results
Program of Socially Responsible Business A business which is responsible towards the society and community is the strategic aim of NIS 21 Energy of Sports Support to professional and children s sports and promotion of healthy lifestyles. NIS is the major sponsor of Partizan basketball Club, the club with the greatest number of trophies in the country, and the Tennis association of Serbia. Company supports car racer Dusan Borkovic. Culture without Boarders Support to cultural institutions and festivals of local, national and international importance. NIS has been a years' long supporter of "Sterijino pozorje", "Zmajeve dečje igre", "Joy of Europe", Nisville Jazz Festival, Bolshoi and Balkans Traffic Festival. Energy of Knowledge Partnership with the educational leaders: universities, faculties, high schools and expert scientific societies in the educational system, aiming to improve the curriculum, create modern work conditions by reconstruction and outfitting classrooms and laboratories, and modification and adjustment of study programs to the market requirements. Support to and strategic cooperation with "Petnica" Research Station for promotion of science, which NIS in 2015 donated 12 million RSD for 154 programs, undertaken by 1,550 students, associates and professors. Humanitarian Projects Assistance and support to the affected population categories. Assistance to parents' associations and children's homes.
Responsible to the Community 22 NIS supports five community investment programs - "Energy of Sports", "Culture Without Borders", "Energy of Knowledge", "Humanitarian Projects" and "Together for the Community" 401.2 mln RSD invested in 2015 through five Community investment programs The program "Together for the Community" in 2015 included 11 municipalities and cities where NIS operates: Belgrade, Niš, Novi Sad, Pancevo, Kikinda, Zrenjanin, Novi Becej, Kanjiza, Zitiste, Srbobran and Cacak. Implemented 152 projects under the program "Together for the Community" in which NIS invested 110.5 mln RSD
Contact Details: NIS j.s.c. Novi Sad e-mail: office@nis.eu 12 Narodnog Fronta Novi Sad 21000 +381 21 481 1111 1 Milentija Popovića Belgrade 11000 +381 11 311 3311 www.nis.eu www.nispetrol.rs www.gazprom-petrol.rs www.facebook.com/naftnaindustrijasrbije www.twitter.com/kompanijanis www.linkedin.com/company/nis-a-d-/ www.youtube.com/user/nisrbije 23