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Sibneft Revenues Rise in 1H 2004 Consolidated Financial Results

Moscow, September 8, 2004. Sibneft recorded total revenue of $4.014 billion dollars in the first half of 2004 according to preliminary consolidated US GAAP financial results released today. Earnings before interest, tax, depreciation and amortization (EBITDA) for the period reached $1.504 billion, while the company posted net income of $975.3 million for the first half.

Total revenue grew by a substantial 17% from the $3.438 billion reported for the first half of 2003. The increase came against the background of 11% growth in six-month crude oil production to 16.62 million tons (683,000 barrels per day) from 15.00 million tons (616,000 b.p.d.) over the same period in 2003.

The six-month net income figure represents a 29% decrease from $1.380 billion last year, when Sibneft booked a sizeable one-time gain from the sale of its stake in ONACO/Orenburgneft to TNK-BP. Excluding that item, net revenue dipped by 2% year-on-year as a result of increases in income tax payments, export duties and transportation costs.

Excluding revenue derived from Sibneft’s stake in Slavneft, and accounting for differences in the calculation of amortization, the consolidated US GAAP net income figure is in line with the 30.1 billion rubles in first-half profit reported by Sibneft and its subsidiaries under Russian accounting standards.

“Sibneft showed strong top-line growth in its first-half financials, while the bottom line was affected by external factors experienced across the industry in Russia,” said Sibneft president Eugene Shvidler. “Our task for the remainder of this year is to continue to refocus our growth strategy and to maintain our position as industry leaders in a variety of key indices.”

Sibneft expects to release its full consolidated US GAAP financial statements and independent audit report later this month and will post the report on its website.

Note: Sibneft calculates EBITDA as operating income plus DD&A