Bashneft has released its preliminary operating results for the first quarter of 2015.

• Average daily oil production amounted to 52.3 thousand tonnes
• Production at brownfields added 4.7% year-on-year
• New assets in Timan-Pechora and Western Siberia accounted for 12.6% of oil production
• Gasoline output grew by 5% year-on-year, while the output of diesel fuel added 5.5%
• The share of light products increased to 68.6%
• 83.4% of gasoline and 99.8% of diesel fuel meet the Euro 5 standard

In the first quarter of 2015, the Company produced 4,709 thousand tonnes of oil, which is 14.4% more than in the first quarter of 2014. In the first quarter of 2015, average daily production reached 52.3 thousand tonnes per day.

Strong growth of oil production in the first quarter of 2015 was driven by a 4.7% increase in production at brownfields mainly due to highly efficient geological and engineering operations in Bashkortostan. The R. Trebs and A. Titov fields in the Nenets Autonomous District and the Sorovskoye field in the Khanty-Mansi Autonomous District, which accounted for 12.6% of the Company’s total production in the first quarter of 2015, were another important driver of production growth.

In the first quarter of 2015, Bashneft’s refining complex processed 4,715 thousand tonnes of crude oil, which is 11.3% less than in the same period in 2014. This level of refining is in keeping with the plan; given the current macroeconomic conditions and a new tax policy, it helps to maximize the value of the product mix by increasing the output of light products.

In the first quarter of 2015, the output of commercial products decreased by 9.5% year-on-year (to 4,385 thousand tonnes) due to a decline in refining. At the same time, the Company considerably improved its product mix. Thus, gasoline output added 5% year-on-year and reached 1,212 thousand tonnes, while the output of diesel fuel increased by 5.5% to 1,898 thousand tonnes. At the same time, the output of fuel oil fell by 18.7% to 706 thousand tonnes, while the output of vacuum gas oil slumped by 93.6% year-on-year to 27 thousand tonnes.

As a result, in the first quarter of 2015, the share of light products increased to 68.6% compared to 58.6% in the first quarter of 2014. One of the factors behind this consisted in the start of operation of a new hydrogen production unit in October 2014, which enabled an increase in the throughput of conversion processes. In the first quarter of 2015, an increase in the average refining depth compared to the same period in 2014 was moderate: the figure reached 83.7%.

Large-scale refinery upgrade projects completed in 2014 and aimed at ensuring compliance with the requirements of the Technical Regulations, such as commissioning of a catalytic cracking gasoline hydrotreater and a hydrogen production unit, enabled the Company to boost the output of light products of higher quality.

Thus, in the first quarter of 2015, the output of Euro 5 gasoline increased by 7.4% year-on-year to 1,017 thousand tonnes. The output of Euro 5 diesel fuel totalled 1,895 thousand tonnes in the first quarter of 2015, which is over 3.5 times more than in the same period in the previous year. As a result, almost 100% of diesel fuel produced in the first quarter of 2015 met the Euro 5 standard.

PRELIMINARY OPERATING RESULTS FOR THE FIRST QUARTER OF 2015

*- LLC Burneftegaz as from March 27, 2014

OIL PRODUCTION BY OIL AND GAS PROVINCE

*- LLC Bashneft-Dobycha
**- LLC Bashneft-Polyus
***- LLC Bashneft-Dobycha and LLC Burneftegaz