Geological Exploration

Rosneft puts much emphasis on carrying out optimal amounts of prospecting and exploration work and maximizing the efficiency of this work in order to replace commercial hydrocarbon reserves and ensure sustainable production growth in the medium and long term. The Company carries out geological exploration in Russia and abroad both independently and as part of joint projects with Russian and foreign partners.

Rosneft’s portfolio of exploration projects ensures extensive access to prospective resources, which will provide a foundation for long-term development of the Company. According to the mean estimate by DeGolyer & MacNaughton, prospective recoverable resources in upstream projects with Rosneft involvement were 5.5 bln tonnes (40.5 bln barrels) of oil and 1.7 trillion cubic meters of gas as of the end of 2010 (not including resources at Arctic shelf blocks, which were acquired in 2010).

Substantial amounts of prospecting and exploration drilling and extensive seismic studies were carried out in projects with Rosneft participation during 2010, in accordance with license terms. Exploration drilling was 94,400 meters, 2D seismic works was 7,573 linear km, and 3D seismic work was 8,809 square km. The scale of geological exploration work in 2010 was significantly greater than in 2009, due to more intensive work in Eastern and Western Siberia. Exploration drilling increased by one and a half times, 2D seismic by 14%, and volumes of 3D seismic were 2.7 times greater than in 2009. Construction of 34 prospecting and exploration wells was completed, and prospecting and exploration drilling led to discovery by the Company of five new fields and 10 new deposits at previously discovered fields.

Geological exploration work and production drilling gave increases of ABC1 reserves (under Russian classification) of 165 mln tonnes (1.2 bln barrels) of oil and gas condensate and 74 bln cubic meters of gas (163 mln tonnes and 66 bln cubic meters, respectively, measured by Company stakes in projects). Most of the reserve growth was at fields in Western and Eastern Siberia.

The substantial results from geological exploration work reflect an optimal combination of adequate 2D and 3D seismic studies, professional processing and interpretation of seismic data, and careful positioning of exploration wells.

Rosneft’s core regions for increase of resource potential are Eastern Siberia, and the shelf of the Black Sea, the Far East, and Russia’s Arctic seas. The Company is also carrying out geological exploration work in its traditional oil producing areas of Western Siberia, the Volga region, Timan-Pechora and the southern part of European Russia. In addition, Rosneft is taking part in foreign geological exploration projects in Algeria, Venezuela and the UAE.

Exploration activities within projects involving Rosneft