The Company successfully implements the import substitution program. The Company is working with Russian and foreign manufacturers on the localization of advanced foreign technologies in the territory of the Russian Federation. By 2025, the Company intends to provide 70% of localization for all projects it implements.

The objective of the import substitution program is to maximize the share of purchases of goods, works and services from the Russian market through the development of existing Russian production and service equipment and by localizing the equipment production and service.

The tasks to be accomplished within the Program:

• reducing dependence on the product import;
• fulfillment of obligations on localization production stipulated by licensing agreements for deposits development;
• minimizing the situations with the lack of equipment required for the projects implementation or unreasonable increase in its cost caused by political risks, a rapid increase in demand, delayed delivery and customs clearance, etc.;
• minimization of idle equipment or unreasonably high repair costs due to the lack of spare parts and equipment service base in the territory of the Russian Federation;
• potential for developing and adapting products in the unique conditions of the Company's projects;
• building up the country's engineering and industrial potential with the potential for selling manufactured products both in the domestic and foreign markets;
• optimization of the production and products service cost by eliminating transportation costs outside the country, customs duties;
• increased control over the timing and cost of the products production and delivery;
• development of personnel potential.

To date, a part of the equipment and services are represented only by foreign suppliers (including up to 100% in a number of areas in the production of hard-to-recover reserves, oil and gas processing, offshore development and information technology).

The implementation of import substitution policy is performed in two main directions:

• localization of equipment which is not currently produced in the territory of the Russian Federation;
• import substitution of equipment, provided in the Russian market in one form or another.