Gazprom neft will operate independently

In October 2005 Gazprom became the owner of Sibneft’s 75% of shares which was renamed in May 2006 into Gazprom neft.

According to the Resolution of Gazprom’s Board of Directors as of September 27 JSC Gazprom neft operates as a vertically integrated oil company with upstream and downstream assets. The Company will conduct its operational activities independently and finance its projects using its own means.

Gazprom neft’s yearly oil output compiled 22 million tons in 2005, oil throughput - 17,6 million tons. Company’s sales network contains approximately 700 retail outlets.

In accordance with the approved oil business development strategy Gazprom neft is going to annually increase oil production. In 2006 Gazprom neft oil production is planned to remain at the 2005 level and will be 33 million tons. In 2007 GazpromNeft’s oil production will exceed 33 million tons and by 2020 it will be 80 million tons. Production increase is planned by means of new oilfields purchasing and development of oilfields which are on Gazprom’s balance.

Gazprom neft will continue participating in new assets purchasing auctions. Since last October up to now the Company has purchased 8 licenses giving the right to develop subsurface mineral resources, a sales network in Kirghizia and 30 sites for retail outlets construction in St-Petersburg.

Besides, Gazprom neft plans to upgrade existing assets. The upgrading program of the Omsk refinery is approved. It will help the refinery to achieve the European level in terms of product quality. he re-equipment program of service companies included in Gazprom neft is being developed. In case of program’s approval and implementation Gazprom neft will be able to conduct all spectrum of service works on oilfields.