Statement of the General Director

On behalf of our Company I am glad to welcome you on our updated corporate site. We offer you to familiarize yourself with the activities of one of the oldest state enterprises in oil and gas industry of our country, with its major projects in Russia and abroad.

Zarubezhneft JSC turns 45 in 2012. During these years our Company managed to win a reputation of reliable and highly professional partner in the international oil community, made a serious contribution into the state budget.

Our experts are by right proud of their assistance in setting up national oil and gas industries of Iraq, Vietnam, Syria, Yemen, Libya and other countries. Gained experience and specialized knowledge of work in various parts of the world provides currently a basis for further growth and development of our Company.

The most efficient overseas project of “Zarubezhneft’ is a Joint Venture (JV) “Vietsovpetro” established in 1981 for development of the South Vietnam shelf. Since the beginning of JV “Vietsovpetro” operations its cumulative production exceeded 196 million tons of oil. Over $8,6 billion US Dollars were received by Russian treasury from the JV’s activities.

The Intergovernmental Agreement on further cooperation in the framework of the JV "Vietsovpetro", signed in December 2010, provides for a 20-year prolongation of the Joint Venture operation time up to the 31st of December, 2030. This event is very important not only for the two companies - "Zarubezhhneft" and "Petrovietnam", but also for the two countries as well.

It is supposed to stabilize the oil production from Bach Ho field at the level of 6-6,5 million tons per year due to new resources. Thus, for example, in 2009 at Bach Ho field a new oil prospect was discovered. Joint Venture “Vietsovpetro” has also become a Contractor for Block 04-1 and an Operator for Block 04-3 on South Vietnam shelf.

Jointly with OGC “Petrovietnam” and Japanese company “Idemitsu” “Zarubezhneft” conducts operations on development of “South Dragon-Sea Turtle” unitized field where JV “Vietsovpetro” acts as an Operator. In January, 2010 commercial production was launched at the field.

Thus, the projects in Vietnam have a great future, therefore, undoubtedly, this area will remain a priority direction of “Zarubezhneft” activities for many years to come.

The works on reconstruction and modernization of the oil and gas sector enterprises in Republika Srpska (Bosnia and Herzegovina) are in progress, where also positive results are achieved. It can be said that “Zarubezhneft” presently is confidently moving towards creation of the vertically-integrated oil and gas company.

In Nenets Autonomous Region a fields development project, covering four blocks of the Central Khoreyver Uplift (CKU), which started in 2008, is being successfully realized. For participation in the project a long-standing Vietnamese partner – OGC “Petrovietnam” has been invited, with whom “Zarubezhneft” established “RUSVIETPETRO” Joint Company. In 2011, as it is expected, around 2 million tons of oil shall be produced by “RUSVIETPETRO”.

Inception of the joint project realization with “Petrovietnam” in Russia even greater reinforced our partnership and allowed to take it out on a brand new level.

Signing of an Assignment Agreement by TOTAL E&P Russie and Norsk Hydro Sverige A.B. for transfer in favour of “Zarubezhneft” of 20% of all rights and obligations of the investor in the Agreement for development and oil production in Kharyaga field on Production Sharing basis has become a serious result of the year 2009. This package had been envisaged in the contract as an option for the Russian company.

Our Company consecutively expands its area of activities. In 2009, “Zarubezhneft” entered into the projects – in Cuba and Turkmenistan, in 2011 - in Jordan and Croatia.

Resumption of cooperation with Cuba can be considered as one of the most important results of our Company’s work. We have signed with the state company “Cubapetroleo” four long-term contracts for hydrocarbon exploration and production on four blocks of Cuba and contract for realization pilot work, supplementary exploration and for using secondary methods on the field of Boca de Jaruco.

This event is of a truly historical character for the two countries because almost for over 20 years no large contracts in oil and gas sphere have been signed between Russia and Cuba.

In 2011 after a some break in the partnership we have signed with ONGC (Indian Oil and Gas Corporation) two contracts - for providing enhanced oil recovery services on the Indian field of Lakwa and for supplying chemicals and materials.

Today, many companies from Africa, Latin America, Middle East and CIS are looking forward to establish cooperation with “Zarubezhneft” in the area of oil and gas production.

All these success became possible due to JSC “Zarubezhneft” staff. During the last years in JSC “Zarubezhneft” a strong like-minded team had been formed. A lot of talented young people have joined our staff with introduction of fresh ideas, young fervour and energy. Our specialists are held in respect and trust not only in Russia but also abroad. Our employees at various times were honoured with Russian, as well as foreign governmental and industrial awards. It is important to note, that attention to the personnel, provision of comfortable working conditions, social maintenance of our Company’s specialists and veterans – these all relate to the priorities of “Zarubezhneft”, and is the integral part of development strategy.

And of course, JSC “Zarubezhneft” operates at the market of hydrocarbon resources development not by itself but in a close interaction with domestic and foreign oil and gas enterprises, and, first of all, with its subsidiary structures, as well as with a number of the leading industrial scientific-research institutes. I would like to thank all our partners for reliability and long-term efficient cooperation.

At present, JSC “Zarubezhneft” staff faces the future with confidence. Longstanding industrial experience, knowledge and high qualification of employees, utilization of innovative technologies in the area of oil production and refining are the guarantee of further Company’s development and enhancement of its work efficiency, continuation of successful realization of oil and gas projects, significant for the state both from economical and political point of view.

Thank you for the interest in our Company and the site.