ANNUAL GENERAL SHAREHOLDERS’ MEETING OF OJSC “SURGUTNEFTEGAS” WAS HELD ON APRIL 30 IN SURGUT

    The Company’s annual report, balance sheet, profit and loss account were presented to and approved by the shareholders, taking into consideration the conclusion of the Auditing Commission and the Independent Auditor as well as distribution of 2004 revenues.

    As Director General of OJSC “Surgutneftegas” Vladimir L. Bogdanov noted in his report, over the past five years shareholder benefits have been steadily increasing with over 42% of average aggregate annual income for ordinary stock and 66% for preferred shares. The Company’s market cap as of the end of 2004 totaled some USD 31 bn.

    According to its latest annual report, in 2004 OJSC “Surgutneftegas” invested RUR 45 bn in production programs, which allowed to increase oil output by 10%, gas output by 3%, to more than double electricity generation, to raise oil refining by 5% and boost oil products turnover by 25%. Our development drilling program was the most capital intensive among peers with 2.8 mn meters drilled and three new oil fields and 887 and new oil wells commissioned.

    The year 2004 saw further expansion of advanced technologies at our oil fields. We commissioned 194 horizontal wells, a 35% increase when compared with the previous year, and constructed 9 multi-lateral wells. Sidetracking of existing wells increased by 25% with 378 wells branched. The number of hydrofrac operations increased by 42% as compared to the previous year.

    As a result of our efforts, well yield went up by 10% with incremental oil production totaling 47% of the annual output.

    The cost saving program in 2004 saved RUR 2.4 bn.

    Intensive production activities provided a basis for better performance indicators, which were also due to favorable external market environment and higher domestic prices for oil and oil products.

    Negative impacts on the situation that have been considered in the report include a 12% inflation, a 6% fall in the US dollar exchange rate, higher power tariffs, and oil transportation costs.

    Higher tax payments had the greatest impact with export duties increased by 89% against last year and a 46% growth in natural resources extraction tax payment.

    As a result, net sales grew by as little as 35% to RUR 288 bn against last year despite a substantial raise in production output and better price environment.

    The Company’s profit growth and amendments to legislation defining net profit were behind an almost threefold increase in net profit to RUR 65 bn. Recommended dividend payments are estimated at 28% of net profit. Declared dividends for 2004 have been proposed at the amount of 40 kopecks and 60.7 kopecks per an ordinary and a preferred share correspondingly.

    Shareholders have been presented with the main figures of OJSC “Surgutneftegas” performance for 2005. The Company intends to boost investments to RUR 57.2 bn including RUR 14 bn in oil refining. Oil output is forecasted at 63.7 mn tons, gas production – 14.5 bn cub m, oil refining – 16.5 mn tons, gas processing – 4.1 bn cub m, power generation – 1.2 bn kWt (an 87% increase).

    Participants of the shareholder meeting have approved the Board of Directors recommendations on dividend payments, adopted Rosexpertiza Ltd as the Company’s auditor, elected Auditing Commission and nine members to the Board of Directors.

    The new Board of Directors consists of Sergei Ananyev, Vladimir Bogdanov, Alexander Bulanov, Igor Gorbunov, Nikolai Matveev, Nikolai Medvedev, Alexander Rezyapov, Ildus Usmanov and Alexander Ussoltsev.

Press Service of OJSC “Surgutneftegas”

Tel.: (3462) 40 10 07, 40 10 08

Fax: (3462) 40 10 18

April 30, 2005