Rosneft & CNPC Sign Deal to Create Vostok Energy

On October 16, 2006, Sergey Bogdanchikov, president of OJSC Rosneft, and Chen Geng, president of China National Petroleum Company (CNPC), signed an agreement to create Vostok Energy Ltd.

The charter capital of Vostok Energy was set at RUR 10 million. Rosneft will hold a 51% stake in the company, and CNPC will hold 49%. The company's board of directors will be comprised of five persons, three of whom will come from Rosneft and two from CNPC.

The new joint venture company was established primarily to conduct exploration work in Russia and obtain licenses for various types of subsoil resource use. Moreover, Vostok Energy intends to undertake production and sales of hydrocarbons, as well as implement new technologies leading to increased effectiveness of exploration and production. In the future, the company's operations will promote increased foreign investment in Russia, as well as greater employment opportunities for Russian citizens.

On March 21 in Beijing, Sergey Bogdanchikov and Chen Geng signed an agreement on general principles of creating joint venture companies in Russia and China in order to expand cooperation between Rosneft and CNPC.