From February 2010 onwards Rosneft will have no more monthly auctions to sell its petroleum products in the country. All free volumes, that the Company now sells on “free departure station” (FDS)* basis, will, from now on, be sold only through the commodity exchange.

Taking as guidance the positive feedback of its customers, who value the convenience and transparency of the exchange trading, Rosneft decided to stop the FDS based auction sales of principle types of motor fuels, heating fuel, bitumen and aviation fuel. Another reason for this decision was that relatively small volumes were sold through the auctions as apposed to the commodity exchange.

Currently, through St.Petersburg international commodity exchange (ZŔÎ SPbMTSB) Rosneft sells over 100,000 tons of oil products per month and this figure is growing. Intending to further develop this strategic business, the Company and SPbMTSB agreed to switch to daily trading as well as to begin the sale of petrochemicals and motor oils from Rosneft refineries at the exchange.

Another large contribution made by the Company towards promoting commodity exchange trading is a joint undertaking with the Irkutsk oblast authorities and St.Petersburg exchange, which from November 2009 onwards enables Rosneft to regularly sell through the exchange large amounts of oil products from its Angarsk plant, thus meeting the basic Irkutsk oblast’s fuel needs.

In 2008, on instructions from the Russian Government, Rosneft became the first Russian vertically integrated oil company to begin energetically developing exchange trading with oil products. In 2009 the Company sold some 1.15 million tons of oil products through the exchange. The Company actively worked with its partners and potential buyers in an effort to persuade as many companies as possible to start trading at the exchange. Since then the trading volumes have multiplied and the main goal now is to bring end consumers to the trading. One of the incentives introduced was to reduce the minimum lot size of key motor fuels down to 60 tons, thus giving production companies with small fuel needs an opportunity to buy products directly from the exchange rather than from intermediate sellers.

Rosneft has always been and remains a most active proponent of petroleum products exchange trading in our country. “Rosneft stopped the auctions, preferring instead to sell larger volumes through the exchange, thus making one more step on the road to creating a civilized domestic market of petroleum products”, said Rosneft President Sergey Bogdanchikov.

* (Basic term of delivery whereby the seller is responsible for delivering to and unloading goods ŕt the dispatching station).