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Board of Directors Approves Gazprom Neft’s Investment Programme and Budget for 2011

On December 20, a regular meeting of Gazprom Neft Board of Directors was held to approve the Company's investment programme and budget (financial programme) for 2011. In addition, the Board members also took note of the progress made in Gazprom Neft's borrowing programme in 2010.

In 2010, Gazprom Neft comfortably exceeded the targets set for all of the Company's business lines. Before the end of the year, hydrocarbon production will amount to upwards of 52.8 mtoe, up 3.9% as compared with 2009. Increase in throughput will be 16.2% and reach 38.8 mln. tonnes in 2010. Sales of premium oil products will hit 11.3 mln tonnes, which demonstrates a 14.1% increase in comparison with the previous year.

The Company development programme envisages 2011 production growth of at least 7% of oil equivalent. The Company has set priority targets for several projects, including commencement of development at the Novoportovskoye and Orenburgskoye fields, preparation for the Messoyakha fields development, and participation in SeverEnergia's assets development. Gazprom Neft will also proceed with its overseas projects in Serbia, Iraq, Venezuela, Equatorial Guinea, Cuba, and other countries. Additionally, the Company intends to participate in open acreage auctions in Russia.

Key processing projects in 2011-2013 will include programmes aimed at the improvement of the quality of motor gasolines and growing of processing depth. The 2011 targets allow for an increase in sales of premium oil products by 13%, which will be achieved through various programmes that include filling stations reconstruction and re-branding, expansion of the retail chain, and strengthening the Company's position within the jet fuel, bunkering and lubricants markets.

Implementation of the 2011-2013 programme will enable Gazprom Neft to approach the targets set out by the Company's development strategy till 2020: namely, production growth up to 100 mtoe, increase in throughput up to 70 mln. tonnes of oil, and premium sales growth up to 40 mln. tonnes of oil products.

Gazprom Neft Board Chairman Alexey Miller commented:

"In 2010, Gazprom Neft kept on strengthening its vertical integration, which enabled the Company to establish itself as an industry leader in terms of operational efficiency and internal rate of return. This year, the Company was ahead of target in terms of all business lines. The implementation of next year investment programme will ensure that the Company maintains its ambitious growth dynamics outlined in its long-term development strategy".