Sibneft Approves Record Dividend Payment

Moscow, 17 August 2001; Sibneft will pay a dividend of 3.79 roubles per share, the company's board of directors decided at a meeting held yesterday. The dividend payout will total 17.970 billion roubles ($612 million), a new record for a Russian company.

Dividend payments will begin on 17 September 2001 to shareholders on the register on 3 August 2001. This dividend follows the company's first dividend of 0.3 roubles per share announced in October 2000.

Sibneft in June unveiled net profits for 2000 under US GAAP standards of $674.8 million, more than double the level achieved the previous year. The strong profit performance resulted from a combination of higher global oil prices and productivity gains flowing from the successful restructuring of the company's exploration and production division.

The board's decision follows the company's move to adopt a dividend policy laying out the framework for future dividend payments to shareholders. Under the terms of the policy, the company intends to pay dividends on an annual basis, returning an average of at least 15% of net income to shareholders over the long-term earnings cycle.

Sibneft president Eugene Shvidler hailed the landmark dividend payout. "This decision to return a large portion of net profits to shareholders reflects the management's determination to ensure that our shareholders enjoy a superior return on their investment. This historic decision was taken in response to strong encouragement from investors and fits in with the company's long-term strategy for developing its relationship with the investment community and international capital markets."