Surgutneftegas Releases Preliminary Operating Results

Oil and gas production have increased by 11.8% to 49.2 million tons and by 20% to 13.3% bcm respectively against 2001. There have been three new oil fields launched. The Company has discovered 11 new oil and gas deposits and one new field, carrying out prospecting works at 29 structures. Seismic and geological prospecting has added 30 million tons of recoverable reserves.

There have been 911 new wells put onstream, 738 kilometers of pipelines, 76 kilometers of motor roads and 436 kilometers of power transmission lines constructed. The Company has commissioned a number of major production facilities including booster station, cluster pump station and initial water draining unit. Surgutneftegas has 11 new filling stations constructed with 8 stations renovated to meet international standards.

The Company's gas-turbine power stations, Tyanskaya and Konitlorskaya, have generated 280 million kW of electric power. Surgutneftegas has started constructing five new gas-turbine power stations at Lukyavinskoye, Bittemskoye, Russkinskoye and Lyantorskoye oil fields. Power consumption and heat supply control program has resulted in 192 million kWh and 128 thousand gigacalories saved which translates into over RUR160 million.

The company continues to incorporate R/3 integrated asset management system. All structural subdivisions of the company have implemented R/3-based tasks covering receivable and payable accounts, fiscal accounting, centralized maintenance of fixed assets and services registry.

The Company's business plan for 2003 calls for higher oil and gas production which is planned to attain 52.9 million tons and 13.6 bcm accordingly with 3 new fields launched.