Chairman’s Address

Dear Shareholders,

For us, as for many of you, 2009 was a challenging year. The difficulties which Rosneft had to face included macroeconomic instability, with sharp fluctuations of prices and currency rates, and a decline in demand for petroleum products. The exceptional environment tested flexibility of the Company’s management system and called for extra scrutiny of Rosneft’s strategy plans. I would emphasize that we rose to the challenges of 2009. Our business is fully on track and we have strengthened our competitive advantages. Moreover: the extra care in decision making, which was needed in the reporting year, has greatly improved our strategic positions. Optimization of our debt portfolio is the best proof of that.

Good results in 2009 were also the outcome of hard work, good planning and adherence to the highest business standards in previous years, and the crisis environment did not distract us from long-term goals. Our main achievement was launch, as per schedule, of industrial production at the enormous Vankor field in Eastern Siberia. Development of Vankor is largest and most capital intensive project ever implemented by the Company. The field was prepared for production at record speed, despite doubling of target output levels since the initial investment decision was taken. Vankor will be the main source of production growth for Rosneft in the medium term: crude oil output at the field by 2014 should be over 500,000 barrels of oil per day, or around 5% of total Russian output. Oil from Vankor will be the main input to the Eastern Siberia – Pacific Ocean pipeline, which has strategic importance for Russia. Transport of Vankor oil through the pipeline for export to Asia-Pacific countries began in December 2009.

Other strategic projects also moved ahead in 2009, despite cost-saving measures. We continued intensive geological exploration work in new regions of key importance to the Company, namely Eastern Siberia, the Far East offshore shelf and Russia’s southern seas. Thanks to these efforts, we posted a very high rate of reserve replacement once again. Modernization work continued at the Company’s industrial facilities, particularly oil refineries, in order to ensure that products meet the highest environmental and quality standards.

Strong operating trends and good decision-making ensured excellent financial results in the reporting year. The Board of Directors was therefore able to recommend the AGM to increase dividends per share once again, by 20%, to a level of RUB 2.30. This recommendation is fully in line with the Company’s policy of striking a balance between the interests of Rosneft and of its shareholders. Growth of the share price at a faster rate compared with most competitors is confirmation of the Company’s successes and of the confidence which shareholders and investors place in Rosneft. Market capitalization of Rosneft had almost regained its pre-crisis level by the end of 2009.

The Company continued to play an active role in design of amendments to the current system of oil sector taxation. The most important outcome for Rosneft in 2009 was creation of a system of preferential export duty rates on oil produced at a number of fields in Eastern Siberia. The measure is intended to stimulate field development and geological exploration work in that region.

We reached a number of long-term agreements with our Chinese partners in 2009. The agreements include a long-term credit to Rosneft on favorable terms by the Chinese Bank of Development as well as a long-term contract for annual deliveries to China of 66 mln barrels of oil at market prices, starting from 2011. Deepening of cooperation with China is an important strategic priority for the Company.

Rosneft is always keen to make every possible improvement to its corporate governance system, taking account of the latest legal requirements and best international practice. Amendments were made in 2009 to the Company Charter and to a number of internal documents regulating activities of the President, Board of Directors, Management Board of the Company and of the Internal Audit Commission. I should also point out that two new professionals took up positions on our Board in the accounting year. The new Directors are experienced managers who are making important contributions to development of the Company and improvement of its efficiency.

High levels of informational openness and transparency are integral to a developed system of corporate governance. Progress by Rosneft in this field was acknowledged by one of the top international rating agencies, Standard & Poor’s, which acclaimed Rosneft the leader by informational openness among all Russian public companies in 2009.

Successes in the reporting year show that we are well equipped for further sustainable development and attainment of all the goals we have set ourselves, without exception. We will continue to work efficiently in the future for the good of the country and of our shareholders, adhering to the highest business standards with respect to production, the environment and society.

On behalf of senior management of Rosneft I would like to thank all our employees for their excellent work in 2009 and all our shareholders for the confidence which they have continued to place in the Company throughout the economic crisis.

Igor Sechin Chairman of Rosneft Board of Directors