OREANDA-NEWS. On April 30, 2008 OJSC “Surgutneftegas” held its Annual General Shareholders’ Meeting, reported the press-centre of Surgutneftegas.

Vladimir Bogdanov, Director General, reported on the Company’s business results in 2007. He stated that Surgutneftegas has been performing in a new economic status of an open joint stock company for the last 15 years and has become a sound energy company with a great number of upstream and downstream projects.

Vladimir Bogdanov stressed also that today Surgutneftegas is a geographically diversified company operating far beyond the West Siberian oil province. As of the end of 2007, the Company’s resource base included 125 license areas in 10 constituent entities of the Russian Federation in three gas and oil provinces: West Siberian, East Siberian, and Timano-Pechora provinces. Surgutneftegas accounts for more than 13% of oil production, 9% of oil refinery, 23% of the total production drilling and more than 19% of exploratory drilling in the sector.

In the reporting year, the Company’s crude oil output and C1 category recoverable reserves growth totaled 64,5 and 77 mn tons, respectively. The capital investments in the upstream sector increased by 29% against the previous year to RUR 86 bn. In 2007, exploration drilling amounted to 167,5 thousand meters. The average producing well stock reached 16,308 wells.

Throughout 2007, the Company added three oil fields to its development portfolio, - the Severo-Tonchinskoye, Yuzhno-Soimlorskoye and Novonadymskoye fields. We also discovered Vostochno-Alinskoye and Severo-Talakanskoye fileds.

Surgutneftegas created the entire production infrastructure in Eastern Siberia. In 2007, accumulated investments in the region amounted to RUR 62 bn. In the current year, the actual commissioning of the Talakanskoye field is planned subject to the start-up date of the Eastern Siberia– Pacific Ocean (ESPO) pipeline.

The Company’s mid-range program represents stabilization of the achieved production output in Western Siberia concurrent with creation of two new oil centers in Nenetsky Autonomous Okrug and Eastern Siberia, as well as entrance into other regions.

Associated petroleum gas output in 2007 totaled 14,1 bcm, gas utilization ratio was 94,3%, which is one of the best figures in the industry. Power generation by the Company’s gas turbine and gas piston plants in the previous year increased by 31% and reached almost 2,5 bn kWh.

Gas processing grew by 31% against the previous year to 6,9 bcm. We produced 6,6 bcm of commercial gas and more than 660 thous. tons of liquid hydrocarbons.

In 2007, the Company processed approximately 20 mn tons of hydrocarbons and invested over RUR 8 bn per year in renewal of the refinery’s assets and construction of the deep oil refining complex based on residue hydrocracking. Turnover of marketing subsidiaries in the reporting year went up by 8,9% and now exceeds 1 mn tons of petroleum products per year.

Environmental financing in 2007 soared by 48% to almost RUR 17,4 bn.

The Company’s net revenue increased by 19% compared with the previous year and amounted to almost RUR 596 bn. Net profit grew by 15% to RUR 88,6 bn.

“We have gone a long way,” said Vladimir Bogdanov in conclusion, “but the tasks we are facing are as ambitious as before, including development of new oil and gas provinces where the scope of works is comparable with the development of Western Siberia in the 1960s - 1970s, and refining projects to create the largest and most advanced refinery in Europe”.

The General Shareholders’ Meeting covered all agenda items and approved the annual report and annual accounting statements of OJSC “Surgutneftegas”, including profit and loss accounts for 2007.

The Meeting resolved to approve distribution of profit (loss) of OJSC “Surgutneftegas” for 2007, including payment (declaration) of dividends, approval of the size, form, schedule and procedure of dividend payment on shares of each category. Dividend payment for 2007 was declared as follows: RUR 0,82 for a preferred share of OJSC “Surgutneftegas” and RUR 0,6 for an ordinary share of OJSC “Surgutneftegas”. The total amount of dividends at reporting year end will exceed 31% of net profit. Dividends are paid in accordance with the procedure recommended by the Board of Directors.

The Meeting also elected the following Board of Directors: Sergei Ananiev, Vladimir Bogdanov, Alexander Bulanov, Igor Gorbunov, Vladislav Druchinin, Vladimir Erokhin, Nikolai Matveev, Nikolai Medvedev and Alexander Rezyapov.

Limited Liability Company “Rosexpertiza” was approved as the Auditor of OJSC “Surgutneftegas” for 2008.

The Meeting passed the following resolution on “Approval of transactions with an interested party which may be conducted by OJSC “Surgutneftegas” in the course of general business activity (in compliance with the Federal Law of the Russian Federation “On Joint Stock Companies”, Item 6): “To approve transactions which may be conducted in the future between OJSC “Surgutneftegas” and its affiliated parties in the course of general business activity of OJSC “Surgutneftegas”, provided that the above mentioned transactions comply with the following requirements: the transaction is aimed at performing the types of activities stipulated by the Charter of OJSC “Surgutneftegas”, and the amount of such transaction is within the amount of the transaction the individual executive body of OJSC “Surgutneftegas” is entitled to perform in compliance with the Federal Law “On Joint Stock Companies”. This resolution remains valid till OJSC “Surgutneftegas” Annual General Shareholders’ Meeting for 2008”.