Sakhalinmorneftegaz

Sakhalinmorneftegaz is a Rosneft subsidiary based on Sakhalin Island and is one of Russia’s oldest oil producing enterprises. Sakhalinmorneftegaz is developing more than 30 oil and gas fields on the island.

Sakhalinmorneftegaz is strategically important for Rosneft as it enjoys the strong competitive advantages of proximity to Asia-Pacific markets as well as access to Komsomolsk refinery and Rosneft’s extensive marketing infrastructure in the Russian Far East.

The Company’s specialists on Sakhalin have unique experience in developing hard to recover reserves. They were among the first in Russia to successfully apply heat formation treatment in order to produce high-viscosity oil. At present, over 10% of Sakhalin crude is produced using advanced recovery techniques.

All the crude oil produced by Sakhalinmorneftegaz is transported by a pipeline to Rosneft’s Komsomolsk refinery located on the Amur River. Gas is transported to the domestic consumers via a pipeline owned by Daltransgaz.

In 2008, Sakhalinmorneftegaz produced 1.76 mln tonnes (12.9 mln barrels) of crude oil and 0.63 bcm of gas.

Sakhalinmorneftegaz’s reserves (PRMS, DeGolyer & MacNaughton, as of December 31, 2008)

Proved hydrocarbon reserves, mln boe	176
Proved oil reserves, mln barrels	146
Proved gas reserves, bcm	5.0

Probable hydrocarbon reserves, mln boe	96
Probable oil reserves, mln barrels	71
Probable gas reserves, bcm	4.1

Possible hydrocarbon reserves, mln boe	82
Possible oil reserves, mln barrels	56
Possible gas reserves, bcm	4.4

Sakhalinmorneftegaz’s hydrocarbon production

	2006	2007	2008
Oil, thousand tonnes	1,902	1,767	1,764
Oil, mln barrels	13.9	12.9	12.9
Gas, mcm	1,072	754	627

Sakhalinmorneftegaz’s operating highlights

	2006	2007	2008
Exploration drilling, thousand m	0.0	0.0	0.0
2D seismic, linear km	0	0	0
3D seismic, square km	0	0	8
Production drilling, thousand m	28.6	15.4	16.6
Producing oil wells, units	1,669	1,556	1,331
New production wells, units	3	2	3