On December 27 Rosneft’s Board of Directors convened to review preliminary results of the Company’s activities in 2007 and a business plan for 2008.

Discussing expected performance in 2007, the Board particularly noted that Rosneft has demonstrated the best operational performance in its entire history in all principal areas of activity. It was also noted that all key indicators of this year’s business plan will be further exceeded.

Key Operational Indicators: Expected 2007 Results, Plan for 2008

In 2007 Rosneft continued to increase oil production at industry leading rates, with production for the year expected to reach 100.9 million tons of crude oil (including 100% of Polar Lights and Udmurtneft production for the whole year, 100% of Samaraneftegas production from June 1, 2007, as well as 100% of Tomskneft production for June and 50% — from July 1, 2007), and represents a 25% increase over 2006. Organic production growth (i.e. excluding acquisitions) is expected to reach 6.3%.

Crude oil production growth rates were achieved primarily through increased drilling, commissioning of new wells (up to 658 wells), improvement of well interventions and efficient management of waterflooding at key subsidiaries, as well as through acquisition of new assets — Samaraneftegas and Tomskneft-VNK. Gas sales volumes in 2007 are expected to reach more than 11 bcm, or 10% more than in 2006.

Throughput at the Company’s refineries in 2007 will reach 40.2 mmt of oil, 67.9% more than in 2006. Petroleum products output will increase by 68.8% vs. the previous year — up to 38.1 mmt. Due to the acquisition of multiple refining assets in 2007, the variety of products has been expanded and refining depth has grown from 59% in 2006 to 65.6% expected in 2007.

In 2007 the Company’s retail network also materially increased: the average number of operating stations increased to 1 629 stations from only 640 in 2006. As a result, retail throughput increased by 2.3 times to 2.789 million tons.

The approved business plan for 2008 assumes further growth of oil production, refining volumes and sales via most profitable distribution channels.

According to the plan, oil and gas condensate production in 2008 will grow by 10.9% to 111.9 mmt The most significant increases of production are expected from RN-Yuganskneftegas (7.4%) and Samaraneftegas (6.2%) and the Company’s Vankor development, which will launch commercial production towards the end of the year.

Throughput at the Company’s refineries in 2008 is planned at 49.1 mmt, which is 22% above the expected level of 2007. Product output will reach 46.8 mmt, which is 23% above the expected volume in 2007. Refining depth will increase to 67%.

One of the primary objectives in the area of cost control for the Company in 2008 is the control of unit cost growth at refineries through a number of initiatives including:

• establishment of a centralized service provider for maintenance and repairs (RN-Service-Refining);
• completion of the gas supply program for the Samara group of refineries;
• conducting an energy audit to subsequently apply measures to reduce unit power consumption;
• continuing efforts to establish a 2-year cycle between maintenance shut-downs;
• reduction of process losses;
• optimization of processes and increase of process units efficiency;
• divestitures of auxiliary entities.

Further expansion of the Company’s retail network and an increase in average throughput per station are also planned for 2008, with the number of the retail stations targeted to reach 1 975 by the end of the year via opening of newbuilt stations and acquisitions.

Volume growth, together with continuing emphasis on operating and capital cost control, as well as improving sales efficiency via new, more profitable distribution channels will provide further momentum to the Company’s objective to solidify its position as the leader of the Russian oil industry both in terms of operational and financial performance.