Yesterday, the Board of Directors of JSOC Bashneft has approved the report on the results of submission of buyback requests by shareholders as part of reorganization of the Company through consolidation of CJSC Bashneft-Invest with Bashneft. Those shareholders who abstained or voted against the reorganization at the Extraordinary General Meeting of Shareholders of Bashneft on February 3, 2014 were given the right to submit a buyback request

According to the approved report, shareholders of JSOC Bashneft submitted requests for the buyback of 4,020,473 ordinary shares and 13,114,172 preferred shares of the Company worth a total of 26.4 billion roubles. In accordance with the Law on Joint-Stock Companies, the total amount of funds which the Company may allocate for the buyout of shares from shareholders must not exceed 10% of its net asset value as of the date when the decision on reorganization was made. If the total number of shares to be bought back exceeds the number of securities which the Company may buy out taking into account this restriction, the shares shall be bought out in proportion to the number of submitted requests.

As of the last reporting date, December 31, 2013, 10% of Bashneft’s net asset value amounted to 17.9 billion roubles. Thus, the buyback ratio totalled 0.677 (the formula for calculating the ratio is given below).

In accordance with legislation, payment for the shares to be bought back shall be made within 30 days after the end of submission of requests, before April 21, 2014.

As has been reported earlier, on December 18, 2013, JSOC Bashneft announced the start of a reorganization programme involving consolidation of CJSC Bashneft-Invest with Bashneft. CJSC Bashneft-Invest is Bashneft’s wholly owned subsidiary created through a spinoff from CJSC Sistema-Invest, whose shares had been owned by OJSC JSFC Sistema and JSOC Bashneft (their stakes in its authorized share capital had totalled 50.6% and 49.4% respectively). In its turn, prior to its split-up CJSC Sistema-Invest had owned a 25.2% stake in the authorized share capital of Bashneft. The reorganization is aimed at eliminating cross-holdings in Bashneft and completing the divestment of its non-core businesses.

Under the resolution of the General Meeting of Shareholders of Bashneft adopted on February 3, 2014, 20.2% of Bashneft’s ordinary shares (16.8% of its authorized share capital) owned by CJSC Bashneft-Invest to be consolidated with the Company will be cancelled, and the Company’s authorized share capital will be reduced to 189,244,540 roubles (150,570,662 ordinary shares and 38,673,878 preferred shares with a par value of one rouble each). Under the resolution of the General Meeting of Shareholders adopted on February 3, 2014, preferred shares bought back from the shareholders will also be cancelled, which will result in an additional reduction in the authorized share capital of JSOC Bashneft.

The reorganization is expected to be completed by July 1, 2014, provided that necessary approvals are obtained from regulatory bodies.

Details on the reorganization of JSOC Bashneft are available on the website www.bashneft.ru in the Investors & Shareholders section.

Note:

Buyback ratios were calculated using the following formula:

R= NAV*10%/((OS*OS price)+(PS*PS price)), where:

NAV*10% is 10% of net asset value as of the date of the decision on reorganization; OS is the total number of ordinary shares to be bought back; PS is the total number of preferred shares to be bought back; OS price is the established buyback price of one ordinary share (1,983 roubles per share); PS price is the established buyback price of one preferred share (1,403 roubles per share). Buyback ratios are calculated to the tenth decimal place. In this press release they have been rounded to three decimal places.