Retail Network

Rosneft operates the second largest service station network in Russia, covering 38 regions, from Murmansk in the north to the North Caucasus in the south, and from Bryansk in the west to Sakhalin Island in the east. The Company sells motor gasoline, diesel and lubricants through its retail network. As of December 31, 2008, Rosneft marketing subsidiaries owned 151 operating tank farms with a total capacity of 3.0 mln cubic meters.

The Company’s network of operating service stations consisted of 1,683 stations in ownership or leased, and 72 stations operating under the Rosneft brand on the basis of franchising agreements. Owned and leased service stations had 116 car washes, 739 shops and 71 cafes. There were small-scale vehicle repair and servicing facilities at 113 of the service stations.

Sales through the Company service station network continued to grow in 2008. A total of 4.06 mln tonnes of petroleum products were sold via the network, which is 1.8 times more than in 2007.

Rosneft continued intensive work on optimization of its retail business, withdrawing inefficient stations and tank farms, acquiring and building highly efficient stations, and carrying out upgrades and rebranding of existing outlets. The Company sold or closed 26 service stations in the course of the year, while 18 stations were built, 13 acquired and 47 rebuilt. Rebranding of Company service stations approached completion in 2008, with the design of 548 stations altered to match the new Rosneft corporate standard.

Work on optimization of the marketing network enabled Rosneft to raise average daily sales per service station to 8.1 tonnes in 2008, compared with 6.8 tonnes in 2007.

Rosneft’s strategy envisages continuing development of the filling station network in areas close to Company-owned refineries and tank farms (the Sakhalin, Chita, Khabarovsk, Primorsk, and Krasnoyarsk regions in the Far East, and the Samara, Krasnodar, and Stavropol regions in Southern Russia), as well as in the fast-growing markets of Moscow and St. Petersburg. Another top priority for Rosneft is increasing the sales volumes of high-quality goods and services through further expanding its network of filling stations with retail premises, cafes, car washes, and garages. Rosneft also plans to continue optimizing its retail portfolio through disposing of underperforming filling stations and upgrading those that can potentially increase sales volumes.