Exploration

Rosneft consistently works to increase the volume and efficiency of its exploration activities, which is crucial to ensuring ongoing replacement of extracted reserves and sustainable production growth in the medium and long term. The Company carries out extensive seismic surveys and exploration drilling both domestically and abroad, and implements exploration projects in close cooperation with Russian and foreign partners.

Rosneft performs exploration activities in its key priority areas of Russia’ Far East, East Siberia, and the shelf of the Caspian, Black and Azov Seas, as well as in its traditional oil producing areas of West Siberia, the Volga-Urals region, the North Caucasus, Timan-Pechora, and Southern Russia. In addition, the Company participates in promising exploration projects in Algeria, Kazakhstan, and Turkmenistan.

Rosneft’s active participation in numerous exploration projects ensures access to considerable prospective resources that further support the Company’s long-term development prospects. According to DeGolyer and MacNaughton, as of December 31, 2007, the best estimate of aggregate prospective resources of upstream projects involving Rosneft was more than 75 bln. barrels of oil equivalent.

In 2007, the Company significantly increased the volume of exploration drilling and 3D seismic surveying. A total of 9,488 linear km. and 6,807 sq. km. of 2D and 3D seismic, respectively, were shot within exploration projects with Rosneft participation, while exploration drilling amounted to 104,300 m. As a result, eight new fields and seven reservoirs at the existing fields were discovered.

In 2007, Rosneft remained the leader in terms of reserves added per well and replacement cost of reserves, with the latter not exceeding 30 cents per barrel of oil equivalent (for ABC1 reserves under Russian classification). This strong performance was achieved due to well-planned 2D and 3D seismic surveying, the application of advanced data processing and interpretation techniques, and enhanced well location.

Accelerated exploration operations and ongoing introduction of innovative technology allows Rosneft to efficiently replace its proved hydrocarbon reserves. In 2007, the Company’s organic reserve replacement ratio reached 111%.

Exploration activities within projects involving Rosneft