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Sibneft Net Income Soars in 2003 Financial Results

Moscow, July 19, 2004. Sibneft today released consolidated U.S. GAAP financial results for full-year 2003, highlighted by a 96% increase in net income to $2.278 billion from $1.161 billion the previous year.

Sibneft’s total 2003 revenues reached $6.717 billion, up 41% from $4.777 billion in 2002. The company also showed strong growth in earnings before interest, tax, depreciation and amortization (EBITDA), which rose 30% to $2.337 billion from $1.803 billion the year before. The EBITDA figures are calculated as operating income plus DD&A.

Net income was boosted by returns on several key investments Sibneft has made in recent years. It includes revenue from the company’s holdings in Slavneft and the Moscow Refinery, as well as proceeds from the sale of shares in ONACO/Orenburgneft to TNK-BP.

Sibneft’s capital expenditures were $985 million in 2003 versus $959 million the previous year. Efficient capital investment and strict cost controls helped the company to boost production by 19.4% while keeping lifting costs down at $1.79 per barrel. Sibneft also reduced its gross debt level from $2.24 billion in January 2003 to $1.59 billion by the beginning of 2004, while net debt stood at $1.48 billion at the beginning of this year.

“Sibneft’s positive financial results reflect our strong operational performance last year,” said Sibneft president Eugene Shvidler. “They form a solid basis for continued growth, allowing the company to remain at the forefront of the Russian oil industry.”