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Rosneft Oil Company

March 20, 2007

Resolutions of the Rosneft Board of Directors

On 15 March 2007, the Rosneft Board of Directors held an extraordinary meeting. In accordance with the meeting’s agenda, the members of Rosneft’s Board of Directors unanimously agreed to approve major transactions in connection with the Company signing a loan for up to USD 13 billion and providing a guarantee for RN-Razvitiye, which is signing a loan for up to USD 9 billion. Rosneft indirectly holds 100% of the capital in RN-Razvitiye through subsidiaries.

The loans for USD 13 billion and USD 9 billion were arranged by ABN AMRO, Barclays, BNP Paribas, Calyon, Citibank, Goldman Sachs, J.P. Morgan Chase and Morgan Stanley and have final maturities of up to 12 and up to 18 months respectively. The interest rates on both loans are LIBOR +0.25%-0.5%, depending on the final redemption date. Both the size and the terms of the loans are unprecedented for a borrower on the Russian market.

Rosneft has secured the loans in order to finance potential acquisitions of core assets in the Russian Federation and abroad, including YUKOS’ assets to be sold at upcoming auctions. The loans are fully compliant with Rosneft’s existing liabilities and will not result in the violation of any previously agreed covenants. Following any acquisitions, Rosneft intends to repay, extend or refinance the loans via longer term instruments which, together with anticipated pro forma cash flows, will enable Rosneft to further improve its credit profile.

RN-Razvitiye has already requested approval from Russia’s Federal Anti-Monopoly Service for Rosneft to acquire 1 billion ordinary Rosneft’s shares, owned by YUKOS, to be sold as part of the bankruptcy proceedings.

Commenting on the resolution of the Board of Directors, Sergei Bogdanchikov, president of Rosneft, said: “Currently, Rosneft’s business mix includes a material disbalance between upstream and downstream - we produce much more oil than we have capacity to refine. Hence, we are interested in potential acquisitions of assets being sold in the YUKOS bankruptcy auctions. Securing funding of USD 22 billion is an important component of our preparation for the auctions and we are now ready to compete. All of our decisions during the process, will, as always, be taken with a view to commercial benefit, to create shareholder value and advance the Company’s stable and long-term development.”

 

 

 

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