Raising the Operational Efficiency

Transneft constantly strives to improve its operational efficiency. The Company has adopted the Programme for Operational Efficiency Improvement and Cost Cutting whose target indicators are included in the KPI system of Transneft’s economic activity.

As per the Porgramme, the Company’s operational efficiency is to be raised along two lines:

  • increasing the quality and quantity of oil and petroleum products transportation services;
  • increasing the efficiency of using the resources available.
The Operational Efficiency Improvement Programme’s Areas
No. Area Ways of implementation KPI
1 Ensuring the reliability and fullness of oil and petroleum products supplies to the home market and for export routes Introducing innovative technologies and equipment;
Upgrading fixed assets;
Ensuring import substitution and setting up local manufacture to replace imported products in the Russian Federation;
Ensuring anti-terror security of Transneft’s facilities.
The integrated indicator of trunk pipeline system reliability, environmental and industrial safety
Comprises the following indicators:
  • specific trunk pipeline accident rate;
  • reduction of specific air pollutant emissions during oil and petroleum products transportation via trunk pipelines.
2 Increasing the efficiency of using the resources available Increasing efficiency:
  • managing fixed assets;
  • managing the maintenance and repair of equipment, buildings and facilities;
  • managing the energy consumption rate;
  • optimising the remuneration and personnel motivation system;
  • managing the working capital.
Improvement of the organisational and functional structure.
Cutting operating expenses.
Using modern technologies and innovations.
Integrated Operational Activity Efficiency Indicator
Comprises the following indicators:
  • operating expenses reduction percentage;
  • reduction of specific electricity consumption during oil transportation over trunk pipelines under comparable conditions;
  • Raising labour productivity in oil and petroleum products transportation.

In 2018, all KPIs were achieved. The Company’s Board of DirectorsMinutes No. 22 dated 27 December 2018 approved the new Programme for Operational Efficiency Improvement and Cost Cutting till 2023.

Key Indicators of the Operational Efficiency Improvement Programme by 2023
Indicator Target for 2023
Keeping within the acceptable range of accidents per 1,000 km of the line 0.065
Suppression (prevention) of security incidents at protected facilities 0.99
In-kind productivity of labour 17.1 million tkm / person
Standard inventory and stock (the plan for repair and operational needs) Not more than 4 months
The Programme’s Key Target Indicators with an annual target
Indicator Target
Reduction of specific electricity consumption for the main type of business activity under comparable conditions 0.5% annually
Operating expenses reduction percentage At least 2% annually
Personnel turnover rate No more than 5% at the end of each year overall