OREANDA-NEWS. January 25, 2011. A conference of TATNEFT's employees was held in Almetyevsk (Republic of Tatarstan), which summed up the Company's activity results and fulfillment of the Collective Agreement terms for 2010. The conference also approved the work plans for the current year, reported the press-centre of TATNEFT.

This annual Company's event was attended by Sh.F. Takhautdinov, General Director of TATNEFT, T.L. Vodopyanov, Chairman of the Trade Union Federation of the Republic of Tatarstan, R.K. Sabirov, Assistant to the President of the Republic of Tatarstan, top managers, heads of structural divisions and subsidiaries of the Company.

In 2010, TATNEFT produced 25 million 863 thousand tons of crude oil accounting for 13 thousand tons surplus versus the previous year. The Company produced 283.6 thousand tons of natural gas liquids, while the production volume of associated petroleum gas amounted to 770 million cubic meters.

The Company produced the first million tons of crude oil in the licensed Company's fields outside the Republic of Tatarstan in the Russian Federation in October 2010. The amount of 248.5 thousand tons of crude oil was produced in Samara and Orenburg regions during the reporting period.

The Libyan branch of the Company intensified its activities, where the works were performed on drilling in the contract areas. Commercial hydrocarbons discovery had been confirmed in four oil structures. The plans for 2011 provide for drilling nine exploration and 7 appraisal wells.

For the first time in its history, TATNEFT started first commercial crude oil production abroad. In 2010 the Company's joint venture Al Bu Kamal Petroleum produced the first 10 thousand tons of light water-free oil with the daily production rate at the initial stage amounting to 80 tons from the South Kishma field in Syria.

Steady increase in the reserves of crude oil and condensate of the Company has been ensured by ongoing geological exploration works in the new territories and supplementary exploration of the fields under development. Prospecting exploration works in 2010 resulted in discovering 4 new fields in Tatarstan with 3 of them falling into the category of extra-viscous oil deposits. Exploration of oil fields is carried out with application of up-to-date two- and three-dimensional (2D and 3D) seismic survey methods, allowing acquiring more detailed information about the deposits.

Today, extra-viscous oil deposits of TATNET are a ground for developing efficient technologies for production and processing of bitumen, which subsequently can be used in the development of such deposits in other regions of Russia. In 2010, the amount of extra-viscous oil production at Ashalchinskoye field exceeded 27 thousand tons.

The Company widely applies innovative developments in the technological process of crude oil production. Application of chain drives allows reducing the number of well remedial servicing in the problematic well stock by 1.5-2 times and reducing energy costs for lifting wells' production.
The system of co-mingled completion and production of two or more layers though one well has also proved its effectiveness. This technology has been implemented in 761 producing wells, including 215 wells involved in 2010 (28% of all co-mingled production projects).

A new technology applied in the reservoir pressure maintenance system co-mingled water injection implemented in 226 injection wells. Cumulative incremental oil production from the wells influenced amounted to 383.5 thousand tons. Last year also witnessed development of the co-mingled completion and production technology with application of a multi-packer system, which protects the production casing from exposure to aggressive environment. In 2011, the plans provide for increasing the total number of co-mingled completion and production units by 185 installations, while the number of co-mingled injection units will be increased by 78 installations.

TATNEFT still continues to maintain one of the highest WWI (well workover interval) among large enterprises of the oil industry in Russia. Over the past 10 years, the well mean time between failures in the Company has increased almost 2-fold and reached 1,041 days, which indicates the significant cost and resources savings. TATNEFT faces the challenge of further increasing this figure to the level of leading international companies.

The innovational activity of TATNEFT in 2010 was distinguished by numerous awards. In 2010, a group of TATNEFT's specialists was awarded the State prize of the Republic of Tatarstan in the field of science and technology for the work "Research and industrial implementation of technological solutions to improve the reliability of in-field oil transportation".

TATNEFT once again became "The Best Company for inventions and rationalization of the Republic of Tatarstan". Nine specialists of the Company were awarded the title "Engineer of the Year" and four employees were awarded the title "Professional Engineer of Russia" in the All-Russia contest. Ten projects of TATNEFT were recognized as winners in the contest "Fifty best innovative ideas for the Republic of Tatarstan". Groups of authors received three awards named after Academician I.M. Gubkin. Developments of TATNEFT won 11 awards at the "Archimedes" Moscow International Salon of inventions and innovative technologies.

The Company's activities in the area of resource saving were also highly appreciated at the XIIth International Exhibition "Energy. Resource Saving " in Kazan, which was attended by Elvira Nabiullina, Minister of Economic Development of Russia, and Rustam Minnikhanov, President of the Republic of Tatarstan. TATNEFT won first place in the category "Best report on corporate and social responsibility and sustainable development" at the All-Russia contest arranged by the RTS Stock Exchange in 2010, and became award winners in three nominations of the XIth All-Russia contest "Best Annual Report".

Up-to-date approaches to development of oil fields, introduction of new equipment and technologies in crude oil production as well as efficient financial management have allowed TATNEFT creating substantial margin of financial strength and releasing funds required by the Company for the development of other strategic activities such as crude oil refining and petroleum chemistry. A special place in this area is occupied by the construction project of the oil refinery and petrochemical plants complex in Nizhnekamsk. Starting of the TANECO Complex first phase in commissioning mode was performed in 2010 and the first products - naphtha and technological export grade fuel were received.

TATNEFT has also successfully implemented innovative projects in the tire manufacturing industry. In 2010 the Company started serial production of new truck tires by the "Continental" Company technology at the Nizhnekamsk solid steel cord tires manufacturing plant built by the Company in December 2009. Some other projects for the manufacturing high-performance tire products with improved technical specifications and application properties have also been implemented.

To date, TATNEFT started a new for the Company of activity: generation of heat and electricity. In 2010 Tatneft Group of Companies incorporated Nizhnekamsk Thermal Power Station and Almetyevsk heating network and additionally Tatneft-Energosbyt energy sales company was established This Company is acqurin the status of a significant enterprise in the republican energy market.

The Company implemented a high tech investment business: a project for production of glass fiber by the joint Russian-German joint venture company "P-D Alabuga Steklovolokno" in 2010 in the territory of the Alabuga special economic zone. Participation of TATNEFT" in this project is stipulated by the interest in its own resources feedstock for the glass fiber pipe plant and in the development of modern innovative technologies, new equipment made of alternative anti-corrosion materials needed by the oil industry.

The results of energy-efficient development of TATNEFT, introduction of innovative developments and modernization of production are reflected in high economic and financial performance of the Company. The net revenues from sales of products shipped by TATNEFT are expected to total 254 billion rubles.

The meeting summed up results of fulfilling the Collective Agreement terms between the management and the workforce of TATNEFT in the past year and adopted a new contract for 2011.

Forward-looking statements: These materials contain statements about future events and expectations that are forward-looking in nature. Any statement in these materials that is not a statement of historical fact is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements expressed or implied by such forward-looking statements to differ. JSC Tatneft assumes no obligations to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements.