Company news in 2003

Tyumenneftegaz OJSC lifted 816,129 tons of oil in the south of the Tyumen Region in January/November 2003, a 7.8% increase on the same period last year, a spokesperson of the company informed PRIME TASS Monday.

The Russian oil business is gradually facing the global business community. The best example of fruitful collaboration seems to have been “the merger of the year” – setting up of TNK-BP joint company, which is gradually becoming a world leader both by oil reserves and by volumes of its production.

As of 15 December, on an accrual basis, TNK-Nyagan actually extracted 158,561 tons of oil, versus the targeted 120,726 tons.

Information on the performance of Orsknefteorgsintez OJSC in November 2003. Total refining amounted to 312.6 thousand tons of oil. 27.2 thousand tons of gasoline were produced, a 17.4% growth on November 2002.

The recipe of these semi-synthetic oils was developed several years ago by specialists from the Ryazan refinery, a TNK-BP subsidiary. Upon entering the market, the oils immediately achieved a high quality status. Ryazan Refining Company has won a prestigious contest of Russia’s 100 Top Goods for the fourth time already.

Enterprises of Tyumen Oil Company OJSC (TNK), which are operating in the Khanty Mansiysk Autonomous District (KMAA), extracted 26,907.574 thousand tons of oil in January-November 2003, a 9.3% growth on the same period of 2002. Such data is contained in the report drafted by the Regional Department for Oil, Gas, and Minerals.

Orenburgneft OJSC boosted oil production by 28.2% to 10.9784 million tons in January-November 2000 on the same period last year.

Subsidiaries of SIDANCO oil company (TNK-Nizhnevartovsk OJSC and Varieganneftegaz OJSC) that extract oil in the Khanty Mansiysk Autonomous Area (KMAA) lifted 9,865.506 thousand tons of oil in January-November 2003, a 14.5% growth on the same period of 2002. Such data is contained in the report of KMAA’s Department for Oil, Gas, and Minerals.

Coverage from the meeting between Oleg Nam, Head of TNK-Sibir Branch, with management of Varieganneftegaz, its subsidiaries and the municipal administration.

On December 9, the solemn ceremony was held, summing up an anniversary fifth contest Company of the Year. The Grand Prix of the contest in the Transaction of the Year category was awarded to TNK-BP for the transaction to set up a joint venture.

The elections to the State Duma being over, the brouhaha about private oil companies has ended, analysts at Troika Dialog hope and suggest earning on that. They expect prices for bonds issued by oil companies to recover to the fair market levels, and TNK’s Eurobonds are the first candidate for pricing growth, in their opinion.

TNK-BP got the representatives of regional authorities, business and scientific community acquainted with the project to gasify the Irkutsk region on December 5. The Kovykta gas condensate field development is incorporated into the regional program to double the domestic regional product.

TNK’s brand must be known to each car owner in Ukraine. By the by, not only car owners are aware of TNK. TNK puts up considerable funds to upgrade its principal asset in Ukraine, the Lisichansk refinery.

Domestic prices for gas will come close to the world ones by 2007, with estimated price for gas from the Kovykta gas condensate field, Irkutsk Region, becoming competitive and reaching USD 45-52 per 1,000 cubic meters in 2007 and USD 70-80 per 1,000 cubic meters in 2010.

TNK-BP does not intend to procrastinate the development of the Kovykta gas field anymore. Lacking gas export agreements, the company resolved to supply fuel to the domestic market. TNK-BP is going to invest USD 676.4 million in the Irkutsk Region gasification project in the next 30 years.

The interview with Evgeniy Bakulin, General Manager at Ukrgazdobycha. “Integrating public and private capital is quite a normal phenomenon,” Bakulin believes.

TNK-BP and the Savings Bank of the Russian Federation plan to put up USD 676.4 million in the project to gasify Western Siberia on the basis of the Kovykta gas condensate field in 2004/2034, it was stated in the information materials provided by TNK-BP for the presentation of the project to gasify the region as of December 5 in Irkutsk.

TNK-BP and the Irkutsk Region Administration intend to set up an operator company, East Siberian Gas Company CJSC (VSGK) to consolidate the project to gasify Eastern Siberia. The proposed capital structure of the operator company is as follows: TNK-BP owns 50% and the Irkutsk Region owns 50%.

The influence of Valeriy Pak (8th position), RUSIA Petroleum General Manager, was displayed in November 2003 when the international feasibility study for the Kovykta gas condensate field development was finalized.

TD TNK-Ukraine has approved its corporate regulations on petroleum product quality control, which is to be binding on all sales entities that cooperate with TD TNK-Ukraine.

The Lisichansk refinery /Lisichansknefteorgsintez OJSC under reorganization/ /city of Lisichansk, Lugansk Region, Ukraine/ has pushed up gasoline production by 5.3% to 1.631 million tons over 11 months of 2003 on the same period of 2003, said enterprises spokesperson to PRIME TASS on Thursday.

“Russian producers, such as TNK, LUKOIL, Spektr Avto and others, have started to produce engine oils under Western technologies using imported additives (which lend required properties to oil) long ago, and the opinion that domestic products are not as good as Western ones has become outdated also long ago,” says A. Shatskiy, technical expert at TNK-Texaco.

Presentation of the project to gasify the Irkutsk Region based on the Kovykta gas condensate field is to take place in Irkutsk on December 5, it was said in the Irkutsk Region administration. The program envisages speeches of the Irkutsk Region Governor Boris Govorin and TNK-BP’s Managing Director, Production and Technologies, Victor Vekselberg.

TD TNK-Ukraine approved its corporate instructions on petroleum products quality control, which will be mandatory for all outlets that cooperate with TD TNK-Ukraine.

TNK-BP plans to funnel USD 847 million to oil production and USD 132.7 million to prospecting in Russia in 2004, said Oleg Nam, the company’s Vice President, at a scientific and practice conference called Ways to Implement KMAA’s Oil and Gas Potential in Khanty-Mansiysk on December 2.

A branch of RTsSU-ONACO CJSC commenced operations in Saratov from the fourth quarter 2003. Integration of TNK and BP determined the need to change the management system of Saratovneftegaz OJSC’s service enterprises, which are now consolidated by a single managerial vertical hierarchy with RTsSU-ONACO’s services.

Orenburgneft OJSC business units increased oil production by 20.3% to 1.043 million tons in November 2003 on the same period last year, ONACO-Media’s announced. Oil production targets were exceeded by 16.7%.

Ukraine has an enormous market for fuel at its side, Russia, where products can be exported all year round, irrespective of climatic conditions. LINOS is the closest to the Russian market, and we should use this advantage by supplying petroleum products, first and foremost, to Russia.

Last year LINOS actually started putting out environment-friendly diesel fuel with low Sulphur content, having performed comprehensive work on further purification. Thus, “tankists” voluntarily improved the ecological properties of diesel fuel, even though this entailed some extra funds and, essentially, shrank profits as this diesel fuel is sold at the same price as the conventional LO.2-62.

The article on OJSC Neftemaslozavod. The refinery’s successes in the last two years may well be called fantastic. In 2001, the refinery over-performed the targets by 24% on 2000. Output has mounted by approx. 16% since the start of the year; growth in production came to 19.4% over 9 months this year on the same period last year.

An educational center for training and further training of refining experts has been opened on the basis of the Ryazan refinery, in Ryazan. The center of the Ryazan refinery is the only one in TNK-BP’s refineries. It is fitted up with a simulation classroom and a training range. Software that simulates control systems of technological units are installed on ten computers of the classroom.

Slavneft oil company is to be finally split among its owners – Tyumen Oil Company and Sibneft – by January 1, 2005, said Victor Vekselberg, Executive Director of Production, at TNK-BP. “Hopefully, this will be over on January 1, 2005, and the company would have been divided,” he said.

The Government plans to provide support to independent gas producers, including through regional authorities, announced Marina Melnikova, Head of the Fuel and Energy Sector Strategic Development Department at the RF Energy Ministry, during the second annual international conference called Energy Safety: Role of Russia’s Gas Companies, arranged by Soyuzgas and IEA.

TNK-Nyagan’s participation in the International specialized exhibition Safety and Labor Protection 2003 is aimed at demonstrating its core dimensions in protection of health and labor of the company’s employees. Valeriy Yanvariov, Senior Deputy Minister of Labor and Social Development of the Russian Federation appraised the company’s activities in this field.

TD TNK-Ukraine’s President Aleksandr Gorodetskiy ranked fifth in the rating of business weekly The Companion called Ukraine’s 10 Best Top Managers 2003. TNK’s Ukrainian project turn out to be large-scale and successful, the edition points out. During one year only, TNK-Ukraine became a leading company in the retail market for petroleum products

The interview with Mr. Anatoly Sokolov, Energy and Utilities Minister of the Saratov Region. In particular, Sokolov told that the best trends in oil production in 2003 was seen for Saratovneftegaz OJSC. He also informed that the cooperation agreement between the regional government and TNK-BP is planned to be signed early in December.

RUSIA Petroleum OJSC is selling 0.46% in its subsidiary, Verkhnechonskneftegaz OJSC, among its minority stockholders at the second stage of redemption, informed Yuriy Shestakov, Press Secretary at RUSIA Petroleum OJSC on November 26. TNK-BP, KhK Interros and the Irkutsk Region Administration became owners of 99.54% in Verkhnechonskneftegaz OJSC /29,869,424 stocks with face value of USD 0.004/ upon completion of the first stage of redemption of stocks in this company.

The analytical article on Udmurtneft OJSC’s joining TNK-BP holding. The newspaper is positive about setting up the new company, TNK-BP, and informs on new advantages opening up to Udmurtneft OJSC, such as boosting oil production by introducing advanced oil production technologies, exchange of production experience, etc.

TNK-BP’s Board of Directors is going to review the corporate strategic development plan for the next 5 years on December 11, TNK-BP’s President Robert Dudley announced on the sidelines of World-Class Companies Establishment in Russia and Abroad conference on November 27.

In early November 2003, Lisichansknefteproduct OJSC commissioned its tank farm that has been under renovation since last summer. During the repairs period, a transit pattern for pumping of petroleum products was applied: from Lisichansk refinery tanks, petroleum products arrived through the pipeline directly to the loading rack and then were loaded into gasoline tankers.

The Lisichansk refinery, LINOS LLC, intends to invest HR 20 million in construction of the second stage of the waste water biological treatment system. According to Viktor Ukhov, Chief Environmental Safety Expert, designs for the construction of the second stage of the biological chemical treatment system to be commissioned in 2005 will be ready as early as this month.

The article based on materials of the news conference of the Tyumen Region Governor Sergey Sobianin in the city of Tobolsk. It is noted that journalists expressed interest in the Uvat project.

Tyumenneftegaz OJSC pushed up oil production in the south of the Tyumen Region in January/October 2003 by 10.8% to 741,274 tons on the same period of the previous year the company announced on November 25.

The article devoted to the implementation of the environmental program at TNK-BP’s Orenburg-based enterprises. The environment safety program to be executed by 2004 has been approved by state environmental authorities.

Report based on material from the news conference given by the region’s Governor Sergey Sobianin in the city of Tobolsk. Summing up the meeting with the Accounts Chamber Head Sergey Stepashin, the Governor said that the differentiated mineral extraction system had to be set up.

Friday Nov.21, inauguration of the young specialists as the new employees of TNK-BP. Men of the day were 119 graduates from universities, colleges and technical schools who joined TNK-BP staff this year.

130 people in Nizhnevartovsk formally became TNK-BP employees. The traditional ceremony of young specialist admission as the company’s employees was held in TNK-Sibir conference hall. This was the most large-scale replenishment in the last three years.

The Tyumen Region Administration and TNK-BP are working out investment patterns for field development in the Uvat District, Tyumen Region, the News Service of the Tyumen Governor told to Interfax-Ural agency, referring to Governor Sergey Sobianin.

The article is timed to the ceremony of young specialists’ admission as TNK-BP’s employees. HR policy, and in particular youth policy, is one of top priorities for TNK-BP.