Sibneft to Increase Sales of Oil Products in Russia

Moscow, 04 April 2002; Sibneft plans to increase its sale of oil products in Russia by more than 18% from 2.3 million tonnes in 2001 to over 2.7 million tonnes in 2002. Overall investment in retail enterprises will reach $34 million, while Sibneft will spend nearly $27 million on building and acquiring retail stations to expand its network.

In its home market of Omsk, Sibneft plans to sell 956,000 tonnes of oil products overall in 2002, included in which is 182,000 tonnes that Sibneft will sell through its own retail network. Capital investment in its Omsk marketing subsidiaries is expected to exceed $1.6 million.

Sales of oil products in the regions of Kemerovo, Krasnoyarsk, Kurgan and Khakassia are expected to reach nearly 360,000 tonnes, of which roughly 108,000 will be sold through Sibneft’s retail network. Investment will more than double to $8.8 million.

Sibneft’s marketing activities in Altai and Chelyabinsk regions are expected to raise sales from 92,000 tonnes in 2001 to 137,000 tonnes in 2002. The amount of capital investment in Sibneft’s network and marketing activities will reach $526,000 from $472,000 in 2001.

Sibneft will also invest nearly $8.0 million to reconstruct, modernize, and expand its retail network in the Sverlovsk region. Overall sales are expected to increase to 851,000 tonnes from 790,000 tonnes in 2001.

In the Tyumen region, Sibneft plans in 2002 to sell more than 360,000 tonnes of oil products, of which 108,000 will be sold through the company’s retail network. Capital expenditures are targeted to reach $15 million.

“Sibneft intends to broaden its presence in regions of Siberia and Central Russia,” said Eugene Shvidler, President of Sibneft. “Right now, Sibneft controls more than 1,000 retail filling stations, and the sale of oil products on the internal market allows us to realize greater margins than sales through exports. Additionally, the rapid growth of our production creates a base for developing our refining and marketing operations.”