Sibneft To Adopt Dividend Policy

Moscow, 26 June 2001; Sibneft's management will recommend that the company's board adopt a dividend policy laying out the framework for future dividend payments to shareholders, Sibneft president Eugene Shvidler announced today.

The text of the policy reads as follows:

"It is the intention of the board of directors to pay dividends to shareholders on an annual basis, subject to achieving satisfactory profit levels. The size of the company's earnings will fluctuate as a result of external factors, such as changes in the oil price, and as a consequence the level of dividend payout will also vary from year to year.

However, it is the board's intention to pay out an average of at least 15% of net income in the form of dividends over the long-term earnings cycle. This level reflects the board's bias in favor of investing available cash in the near term, as a result of the high returns currently available from investments in the company's upstream assets.

Through these investments, the board aims to benefit shareholders by achieving growth in the underlying value of the company. It is the board's intention that as the returns from these investments decline over the longer term, a greater proportion of profits will be returned to shareholders in the form of dividends."