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Sibneft Signs Memorandum of Understanding with Noyabrskneftegas Labor Union

Noyabrsk. April 28, 2006. Sibneft today signed a memorandum of understanding with the labor union representing workers at its main production subsidiary, Sibneft-Noyabrskneftegas, as part of the company’s ongoing social partnership with its employees. The signing took place in Noyabrsk, where Sibneft president Alexander Ryazanov led a delegation of top company executives on a working visit.

The central focus of the memorandum is to improve upon the social obligations outlined in labor’s collective bargaining agreement. In order to provide additional guarantees and better benefits to employees, the two sides agreed that Sibneft would increase spending on benefits at Noyabrskneftegas and its subsidiaries to levels beyond those set in the company’s 2006 business plan, an increase of 302.6 million rubles.

The measures outlined in the memorandum include larger payments to workers leaving for vacation, up to 20,000 rubles; a rise in monthly stipends to women employees on maternity leave; and a variety of other social benefits, payments and guarantees.

In addition, the two sides agreed to study the possible inclusion in the company’s 2007 business plan of funds to develop and execute a health care and prevention program for employees and their families, a medical insurance program for workers, and a supplemental pension program.

During their stay in the Noyabrsk region, Mr Ryazanov and accompanying Sibneft executives also visited with service companies Borets-Muravlenko, LLC and Centralift., which operate a service center for electrical submersible pumps. Mr Ryazanov also met with managers at Noyabrskneftegas’ production subdivision in Muravlenko.

The delegation likewise met with Muravlenko Mayor Vasily Bykovskiy and Noyabrsk Mayor Nikolay Korobkov. Initially, Mr Ryazanov and the two municipal leaders discussed the outlook for Sibneft’s relationships with the regions where it operates. That was followed by a broader meeting with local energy experts to discuss the proposed construction of power stations at the Sugmut oilfield and in the Noyabrsk area.