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Rosneft Oil Company

December 16, 2005

Rosneft’s First Vice-President takes part in a meeting chaired by the RF Prime Minister in the Krasnoyarsk Territory

Rosneft’s First Vice-President Sergei Kudryashov, during his working visit to East Siberia, took part in a meeting on December 16 dedicated to works on the implementation of the Russian Presidential decree on the launch of the Boguchansk hydro-electric power plant in 2010 and on the development of the Vankor oil and gas field. The meeting was held in the town of Kodinsk, in the Krasnoyarsk Territory, and chaired by Chairman of the RF Government Mikhail Fradkov.

Sergei Kudryashov also discussed current operational issues, preliminary results for 2005 and future development plans with the management of Rosneft’s Krasnoyarsk Territory subsidiary, Vankorneft, which is developing the Vankor field (the Vankor and North Vankor license areas).

Under the 2005 exploration program, 6 wells were drilled at the Vankor field, with another 8 wells planned for 2006, of which 5 will be oil wells and 2 will be gas wells. Exploration costs in 2004–2005 totaled some $182 million.

Tests of the first wells drilled this year revealed record yields for inland developments — of up to 1,000 tons a day. The unique geology and concentration of reserves will provide for one of the lowest production cost figures in the industry. It is estimated that operating costs per ton of product will be 20% lower than in Rosneft’s largest production enterprise — Yuganskneftegaz, currently Russia’s leader in terms of controlling operating costs. Commercial oil production at Vankor will commence no later than 2008. The current reserves of the Vankor and North Vankor sites will provide for annual production of some 16 – 18 million tons depending on the development options. As at September 2005, C1 category recoverable oil reserves at the Vankor field are estimated at 66.12 million tons, with C2 category reserves estimated at 201.12 million tons. Category C3 reserves are estimated at 98.4 million tons.

Rosneft also owns exploration licenses for 10 areas adjacent to Vankor. Total Category C3 and D reserves in these adjacent areas are preliminarily estimated at over 600 million tons of oil. Vankor’s development may therefore signal the creation in Russia of a new petroleum province.

Rosneft’s acquisition of the Anglo-Siberian Oil Company (ASOC), the initial holder of the licenses for the Vankor group of fields, in 2003, marked the first take-over of a public company on the London stock market by a Russian company, and was conducted in strict compliance with international principles and rules. The deal allowed Rosneft to gain control over the unique deposit. The work of Rosneft’s geologists and engineers subsequently allowed the company, ably and at minimal cost, to conduct a program of geological and engineering research and to significantly increase the value of the project.

The Vankor field development plan allowed a speedy decision to be taken on the construction of the Eastern export oil pipeline (East Siberia – Pacific Ocean). The oil to be transported via this pipeline will be sold in Asia-Pacific region countries – the region with the highest rates of growth in energy consumption.

Participating in the project are leading global specialist companies: Schlumberger, Halliburton, SNC Lavalin, and the top Russian pipe suppliers: the Vyksunsky Metallurgical Plant and the Chelyabinsk Pipe Mill. Financial support for the project is being provided by RF Sberbank.




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