West Siberian Plans Merger with Alliance Oil

West Siberian plans to merge with Alliance Oil and create a vertically integrated Russian oil company with a stable supply of crude oil, substantial refining capacity and important assets in distribution and marketing of petroleum products. The group will have proved and probable oil reserves of 430 million barrels, production of close to 51,000 barrels per day, refining capacity of 70,000 barrels per day, and 255 gas stations that will provide the basis for stable future earnings and improved margins.

The combined market capitalization of the companies amounts to approximately USD 2.5 billion and combined pro forma revenues for the first nine months 2007 amounted to USD 1,398 million and combined EBITDA amounted to USD 228 million.

West Siberian Resources Ltd (OMX:WSIB-SDB) ("WSR") and shareholders OJSC Oil Company Alliance ("Alliance Oil") today signed a Memorandum of Understanding ("MoU") that creates a leading independent vertically integrated oil company, with a mix of upstream and downstream businesses that operate in key oil regions of Russia. The parties intend to enter into and execute definitive merger agreements that will see Alliance Oil become a wholly-owned subsidiary of WSR in exchange for WSR issuing to Alliance Oil shareholders 1,783,540,968 ordinary shares representing 60% of its total issued share capital post-issue. Alliance Oil's shareholders will be represented on WSR's board of directors by two directors and WSR's management team will be complemented by the senior management of Alliance Oil adding downstream experience. Maxim Barski will continue as the Managing Director of the combined company.