Rosneft at a Glance

Rosneft is the leader of Russia’s petroleum industry, and ranks among the world’s top publicly traded oil and gas companies. The Company is primarily engaged in exploration and production of hydrocarbons, production of petroleum products and petrochemicals, and marketing of outputs. Rosneft has been included in the Russian Government’s List of Strategic Enterprises and Organizations. The state holds 75.16% in the Company (through OJSC ROSNEFTEGAZ), while approximately 15% of shares are in free-float (see shareholder structure).

Rosneft is widely engaged in exploration and production across all key hydrocarbon regions of Russia: Western Siberia, Southern and Central Russia, Timan-Pechora, Eastern Siberia and the Far East. In addition, the Company participates in several exploration projects in Kazakhstan and Algeria. Rosneft’s seven major refineries have convenient locations throughout the country, from the Black Sea coast to the Far East, and the Company’s retail network covers 38 regions of the Russian Federation.

Unlike many of its competitors, Rosneft has a vast and high-quality reserve base, with total proved hydrocarbon reserves of 22.3 bln barrels of oil equivalent – among the best indicators for a global publicly traded oil and gas company. Moreover, Rosneft is second-to-none on an international scale in terms of total proved liquid hydrocarbon reserves. The Company’s proved reserve-to-production ratio is 26 years. Rosneft operates mainly conventional reserves, so the Company is well-placed for efficient increase in hydrocarbon production. In addition, Rosneft has access to probable and possible reserves of 26.6 bln barrels of oil equivalent, which will become the main source of proved reserve extension in the future.

Rosneft is focused on expanding its resource base through intensive exploration and new acquisitions in order to secure sustainable production growth in the long term. In recent years, the Company has demonstrated consistently strong reserve replacement performance: in 2008, Rosneft’s proved reserve replacement ratio was 172%. Rosneft’s major exploration projects are located in the most promising hydrocarbon regions of Russia, such as Eastern Siberia, the Far East, and shelves of Russia’s southern seas. As a result, the Company has access to about 53 bln barrels of oil equivalent of prospective resources.

Rosneft has been successfully implementing its strategy of steady production growth, supported by constant monitoring and adoption of innovative technology. In 2008, the Company produced a total of 776 mln barrels of crude oil (2.12 mln barrels per day), thus posting a fivefold growth in crude output over the last five years. Furthermore, the Company consistently maintains high operating efficiency, and has the lowest upstream production and operating expenses among its national and major international peers.

Rosneft is also one of the leading independent gas producers in Russia, with an annual output of natural and associated gas exceeding 12 bcm. The Company’s vast and unique reserve portfolio ensures steady long-term growth in gas output. Rosneft is currently implementing comprehensive measures aimed at achieving a target gas utilization rate of 95%, one of the Company’s high-priority objectives.

Rosneft’s refinery throughput in 2008 totaled 360 mln barrels (985,000 barrels per day) – a record high for the Russian oil industry. Favorable refinery locations enable the Company to raise consistently the efficiency of petroleum product sales. Rosneft is now actively involved in expanding and upgrading its refineries to enhance further the balance between crude output and refinery throughput, and to boost production of higher value-added petroleum products meeting the latest environmental standards.

Rosneft also operates proprietary marine terminals in Tuapse, De-Kastri, Nakhodka and Arkhangelsk, which allows the Company to capture higher margins on crude oil and petroleum product exports. Rosneft is currently implementing comprehensive expansion and modernization programs at its terminals to ensure their capacity meets future export volumes.

Rosneft is aware of the importance of increasing direct sales of petroleum products to end customers. For that purpose, the Company is consistently extending its retail infrastructure, which now comprises about 1,700 service stations – the country’s second largest marketing network.

Rosneft strictly complies with international standards for corporate governance, information disclosure and financial reporting. Reputable non-executive directors have held one third of Board seats since 2006. The Company also pursues a policy of social responsibility toward its employees and members of their families, to the people in regions in which it operates and – most importantly – to society at large.