Procurement
Our supply chain management system is an integrated process consisting of interrelated elements: procurement planning, inventory management, pre-qualification of tenderers, evaluation of tenders and contract award, contract quality and milestone management (including expediting, during production inspections, delivery receipt, checking the necessary permits, and incoming inspection), and control of inventory transactions.
The supply chain management is also closely linked with other related processes at the Company, such as contract management and budgeting. The principles of purchasing materials and equipment, works and services in NOVATEK are determined by the Company’s Procurement Policy.
ESG criteria are integrated into all stages of the procurement process, from procurement planning to putting the inventory into operation. When entering into contracts, we set out our expectations with counterparties and monitor how they are observed at various stages of the procurement process. The Company also pays attention to whether its suppliers observe the human rights requirements, inter alia preventing child and forced labor.
Procurement process
NOVATEK works with partners who are committed to business ethics and human rights, including prevention of child and forced labor, and with those who comply with anti-corruption requirements. The Company places emphasis on cooperation with local counterparties1 and on production localization, thereby reducing its reliance on imports. At each stage of supply chain management, the Company states its expectations of counterparties and monitors partners’ compliance with its responsible business principles.
The Company consistently monitors and regularly assesses procurement, corruption, and human rights risks, and develops measures to reduce their impact on supply chain sustainability. Procurement risks are reflected in the Company Risk Map.
When identifying and assessing risks related to suppliers’ businesses, NOVATEK considers a totality of factors, including a supplier’s business profile, size, geographical location, and business reputation.
1 Local counterparties are suppliers of goods and services operating in the Russian Federation.
Procurement transparency and equal treatment of suppliers
NOVATEK is committed to transparency, objectivity, equality, and non-discrimination in the procurement process. To this end, the Company sets requirements for bidders and procured items so no one bidder has an advantage while minimizing potential corruption risks and risks of non-performance or improper performance of contractual obligations.
The Company prioritizes open competitive tenders conducted through an electronic trading platform as its primary procurement format. Tenders can also be announced on the websites of PAO NOVATEK or NOVATEK Group companies. All bidders are guaranteed equal access to the relevant data about the tender conditions, procedures, and closing date. NOVATEK evaluates all bids as part of the procurement process, engaging independent experts who do not influence each other’s opinion.
To improve the procurement transparency and the efficiency of management decision making, the Company has started automating the procurement and inventory management process. In 2025, the OSNOVA ERP centralized information system (“OSNOVA”), integrated with 1C-based accounting platform, was put into commercial operation.
