Sibneft and Yukos Finalize Merger Transaction

The principal shareholders of OAO Sibneft and Yukos Oil Company have finalized the previously announced transaction creating YukosSibneft Oil Company, Russia's largest oil and gas group.

'This unprecedented transaction was successfully completed in less than six months demonstrating the top professional skills of the joint management team," stated Yukos CEO Mikhail Khodorkovsky. - "In the near future we will begin the process of making YukosSibneft a truly major player in the international energy market."

"With the completion of this transaction, YukosSibneft takes its place among the world's top energy companies. The speed with which we completed the principle steps in the merger process shows how well these two companies fit together, and we expect the resulting synergies will immediately translate into strong operational and financial performance," said Sibneft President Eugene Shvidler.

On October 2, 2003, Yukos effected the final $1.25 billion payment for shares representing 20% minus one share of Sibneft's authorized capital. The total cash consideration for the Sibneft shares was $3 billion.

On October 3, 2003, YUKOS took ownership of 3,413,735,740 shares of Sibneft (equal to 72% plus 1 share of total authorized capital) in exchange for 702,397,159 shares (26.01%) of Yukos Oil Company.

Both newly- and previously-issued stock of Yukos Oil Company was used for the purpose of the share exchange with Sibneft. The total number of newly issued shares was 463,524,307, including 6,481 placed as part of the pre-emptive right exercise and 463,517,826 shares placed under closed subscription among companies representing the principal shareholders of Sibneft. Following registration of a report with the Federal Commission on the Securities Market of the Russian Federation on the results of the new share issuance, there will be a total of 2 700 488 885 shares for the combined company. On November 28, 2003, an extraordinary shareholders' meeting of YUKOS Oil Company will consider amendments to YUKOS' corporate Charter including the official name change to YukosSibneft Oil Company, as well as the election of a new Board of Directors and the approval of an interim dividend.

The revised draft of the Charter contemplates, among other things, the creation of a Management Board that will be responsible for the day-to-day operations of the company.

The proposed changes also cover internal policies & procedures, the number of Directors and the authorities of the Board of Directors.

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