Sales of oil and petroleum products
Gazprom Neft is a wholesaler of oil and petroleum products both in Russia and abroad. Small wholesale and retail sales, including sales at filling stations, are managed by dedicated subsidiaries.
In 2018, crude oil sales decreased 8.6% year-on-year to 24.26 mt as production increased at Russian refineries of the Company.
Domestic sales dropped 22.6% to 4.31 mt, and total oil exports decreased 6% to 18.70 mt. By contrast, oil sales to global markets rose 17.9% to 1.25 mt on the back of increased production in Iraq.
In 2018, Gazprom Neft's own fleet received enough vessels to ensure uninterrupted service of the Company's fields in the Arctic region. With the fully-fledged own Arctic fleet, Gazprom Neft ensures year-round oil delivery to global markets with maximum cost efficiency and minimal risk of interruptions caused by external negative factors.
Petroleum product sales
The growth of sales in 2018 was mostly associated with demand in the domestic market where petroleum product sales increased 6.1%.
Cumulative exports of petroleum products and international sales grew 4.6% to 16.24 mt in 2018. The biggest driver of exports was growing sales of naphtha, fuel oil and jet fuel to non-CIS countries. In 2018, actual sales of fuel oil on the domestic and international markets were driven by cost considerations and deemed optimal given the existing demand and price levels.
Premium sales Premium sales are:
>> sales of petroleum products via premium marketing channels, both retail and small wholesale. This group includes all product sales at filling stations and tank farms, as well as into-plane and direct-to-vessel fuelling, small wholesale at refuelling terminals at airports and seaports;
>> sales of premium petroleum products with a higher added value due to advantages over other products in the same category. This group includes sales of packaged products (oils in barrels and cans, polymer modified asphalt cements (PMAC) in clovertainers, etc.), premium-branded liquid lubricants (Gazpromneft, G-Family, Texaco), premium-branded bituminous materials (PMAC, polymer modified bitumens, bitumen emulsions, etc.), all brands of bitumen-based products, and potential wholesale of premium motor fuels (G-Drive, etc.). in the reporting period increased 3.7% to 27.10 mt. Sustained growth of premium sales was a result of the product range expansion, production capacity upgrade and implementation of innovative solutions in customer segments.
Focus on aviation fuel, premium bitumen and lubricant sales allowed the Company to increase its share in relevant retail segments in the reporting year. Aviation fuel and bitumen sales in the premium channels were up 10.6% and 22.9%, respectively. Higher demand in Russia's north-western and Black Sea ports drove a 7.7% year-on-year increase in bunkering volumes in 2018. Premium sales of oils and motor fuels increased 6.9% and 1.9%, respectively.
Development of small wholesale and retail sales of petroleum products is one of the Company's priorities. Having a nationwide brand with strong recognition and customer confidence helps the Company to deliver on one of its strategic goals of becoming a leader in Russia and the CIS in terms of retail sales and filling station network performance by 2025.
As at the end of 2018, the total retail sales of motor fuels via filling stations grew 2.7% year-on-year to 11.34 mt, including 9.12 mt in Russia. The Company confirmed its status as a Russian market leader in terms of average daily sales per filling station, which grew 3.3% year-on-year reaching 20.7 tpd.