Sibneft Posts Solid Operating Results for 2004

Moscow, February 9, 2005. Sibneft crude oil production rose to 34.04 million tons (693,000 barrels per day) in 2004 compared to 31.45 million tons (641,000 b.p.d.) in 2003, an increase of 8.2% year-on-year. Growth in exports outside the CIS outpaced production, coming in at 9% as total volumes rose to 13.58 million tons versus 12.46 million tons the previous year. As with 2003, crude oil exports last year constituted just under 40% of Sibneft’s overall production.

The production figure does not take into account Sibneft’s stake in Slavneft, which it owns and operates jointly with TNK-BP. Slavneft last month announced a 24.1% increase in crude oil output to 22.01 million tons in 2004.

Sibneft’s Omsk Refinery posted a 3.4% increase in processing to 14.31 million tons (292,000 b.p.d.) from 13.83 million tons (282,000 b.p.d.) in 2003. Sibneft also refined 9.1% more crude oil at the Moscow Refinery for a total of 3.25 million tons (66,200 b.p.d.) versus 2.98 million (60,700 b.p.d.) the previous year. At both refineries, Sibneft boosted output of profitable lighter petroleum products such as gasoline, aromatics and jet fuel.

Total refining for 2004 fell by 2.2% to 17.56 million tons (358,000 b.p.d.) from 17.96 million tons (366,000 b.p.d.) the previous year. Petroleum product exports also dipped slightly, by 4.2% to 5.17 million tons from 5.40 million tons. Both decreases were due to the curtailment of refining at Slavneft’s Yaroslavl Refinery under an agreement with TNK-BP to run all Yaroslavl volumes through Slavneft.

Sibneft last year continued its retail network expansion in its traditional base in Western Siberia as well as in markets in European Russia. Retail sales through proprietary stations rose nearly 22% in 2004.

"In 2004, Sibneft struck a better balance between production, refining and retail, which should reflect well on our financials for the year,” said Sibneft president Eugene Shvidler. “The slow-down in production growth from the previous year is in line with our field development plans and our long-term strategy aimed at maximizing returns and increasing oil recovery rates.”

Below are key Sibneft production figures for 2004:

(million tons)


2004

2003

Change

Crude oil production

34.04

31.45

+8.2%

Crude oil exports

13.58

12.46

+9.0%

Refinery throughput

17.56

17.96

-2.2%

Omsk

14.31

13.83

+3.4%

Moscow

3.25

2.98

+9.1%

Yaroslavl

-

1.15

-

Oil product exports

5.17

5.40

-4.2%