OREANDA-NEWS. Gazprom Neft's Board of Directors has reviewed the Company's debt structure. The Company is constantly seeking to diversify its debt portfolio by attracting funding at an optimal interest rate for longer terms whilst maintaining a strong balance sheet. The investment ratings assigned to the Company by the world's leading rating agencies provide Gazprom Neft with broader access to the financial market and significantly reduce the cost of borrowing. In 2013, for the first time in the Company's history, Fitch Ratings gave Gazprom Neft a rating at the sovereign level of BBB with a stable outlook, while Moody's upgraded Gazprom Neft's rating from Baa3 to Baa2 with a stable outlook.

In 2013, Gazprom Neft increased its average debt repayment term by 35% compared with the previous year - to 5.13 years. The share of long-term loans accounts for 90% of Gazprom Neft's total borrowings. At the end of 2013 the Company's total debt portfolio stood at approximately USD 9 billion. The debt burden, measured as the proportion of net debt to EBITDA*, increased slightly over 2013 from 0.51 at the beginning of the year, but remains significantly below the threshold of 1.5.

Gazprom Neft's Board of Directors also reviewed the Company's material and equipment procurement procedure and measures to increase the share of domestic products in its order portfolio.

Gazprom Neft's procurement policy ensures fair competition between suppliers, as well as impartial and transparent procedures and the fair and equal treatment of all suppliers. This is guaranteed by means of a tender process as well as e-procurement, which is the primary source. The supplier offering the best terms is selected based on their bids, which meet criteria set out by the Company. The automatic information delivery system provides data on upcoming purchases to over 22,000 potential contractors registered on the system.

Additionally the Company has a database of alternative suppliers which also contains information about the equipment and materials procured by the company on a regular basis. The databank provides information on the basic product and substitutes, including a price chart for both types of goods.

Gazprom Neft works with major Russian manufacturers that guarantee high quality products, reliable services, stable prices and the use of cutting-edge technology. The Company's procurement policy commits 93% of its funds to the purchase of equipment and materials produced by Russian companies.