OREANDA-NEWS. July 05, 2010. Following the consideration of the agenda, the shareholders approved the Company’s annual report and annual accounting statements, including profit and loss account for 2009.

The shareholders’ meeting declared the dividend payment for 2009 in the amount of RUB 1.0488 per preferred share and RUB 0.45 per ordinary share.

The elected Board of Directors included S.A.Ananyev, V.L.Bogdanov, A.N.Bulanov, I.N.Gorbunov, V.E.Druchinin, V.P.Erokhin, N.I.Matveev, N.Ya.Medvedev, A.F.Rezyapov.

The shareholders’ meeting appointed the Auditing Committee consisting of three members and approved Rosexpertiza LLC as the Auditor

of the Company for 2010. The meeting also resolved to approve transactions, which can be effected in future between OJSC "Surgutneftegas" and its affiliates as part of the Company’s ordinary business activities.

In view of the requirement to specify the location of the Company’s sole executive body, the meeting resolved to appropriately amend the Charter of OJSC "Surgutneftegas".

Reporting on 2009 results, Director General, V.L.Bogdanov, emphasized that despite the external challenges the Company’s team successfully implemented all the business plans. Thus, the Company achieved the plan targets for the development of new oil and gas bearing provinces, laid the groundwork for the sustainable growth of its resource base, continued development of its power generation sector, and implementation of its environmental and social programs.

At year-end, Surgutneftegas accounted for over 39% of exploratory drilling in Russia. The Company discovered 9 fields and 15 new petroleum deposits, and acquired 10 licenses in Yakutia, Khanty-Mansiysky and Yamalo-Nenetsky Autonomous Okrugs.

Increment of oil reserves generated from prospecting and acquisitions reached 118 mn tons twice as much as oil production output. During the last five years, reserves replenishment exceeded oil production output by 1.5 times.

Surgutneftegas accounted for 68% of production drilling and over 63% of producing wells put onstream at new fields.

In 2009, the Company commissioned 3 new fields, and plans to bring on line 18 more fields by 2015.

In the reporting year, Surgutneftegas put into operation 3 gas piston power plants (GPPP), and the second phase of the Talakanskaya gas turbine power plant (GTPP), which marked the completion of the Company’s most powerful GTPP generating 144 mW. At year-end 2009, Surgutneftegas operated 17 GTPP and 7 GPPP with a total capacity of 605 mW providing for 28% of the Company’s total power consumption.

Next year, the Company plans to cover 30% of its energy needs.

By 2015, a number of new facilities put into operation will allow the Company to increase total capacity up to 880 mW.

In 2009, the associated petroleum gas utilization ratio reached almost 97% which has made Surgutneftegas the leader among Russian oil companies in these terms.

In the reporting year, Surgutneftegas processed about 7.2 bcm of gas, produced about 6.8 bcm of dry stripping gas, and almost 600 thousand tons of liquid hydrocarbons.

We refined 20.4 mn tons of crude hydrocarbons. Today, the Company’s refinery runs technical facilities providing for the production of EURO-4 standard gasoline and diesel fuel.

In his report, Vladimir Bogdanov put particular stress to innovation issues.

He specified that in accordance with innovative program, the Company annually performs about 300 activities aimed at employing new equipment and technology. In 2009, due to the activities mentioned above, economic benefit amounted to almost RUB 12 bn.

In the year under review, Surgutneftegas spent over RUB 1 bn on R&D activities while economic benefit exceeded RUB 8.4 bn.

Summarizing annual financial returns, Vladimir Bogdanov noted that the Company’s net profit totaled RUB 114 bn, down by 21% compared with the previous year. Though the efficiency of operational activity achieved 25% making over RUB 15 bn of additional receivables, net profit reduction occurred due to foreign exchange losses and strengthening of the ruble in the reporting year.

As reported, the financial results could be worse taking into consideration various external factors the Company was exposed to in 2009.

"Timely changes in tax legislation and the Government support given to oil companies enabled us to allocate released funds to capital investments.

In the reporting year, Surgutneftegas increased investments by 19% up to RUB 124.5 bn".

"According to the results we demonstrated in 2009, Surgutneftegas strategy, key priorities, and principles accepted as a basis for its activity have been proved to be efficient", underlined Mr. Bogdanov. – "The Company has a strong command of successful operation and development not only under favourable terms, but amid recession, as well.

Our major competitive advantages include stable financial position, skilled staff, and advanced technology development".