RussNeft: Obligations are met, Cooperation Continues

- Sergey Nikholaevich, could you sum up the preliminary results of RussNeft and Saratovnefetgaz’s operation in our region in 2006?

- I believe we will come to the end of the year with a success and the tasks RussNeft gives to Saratovneftegaz will be fulfilled. I would like to point out that the expected oil production for 2006 is 1 514 mln tons; that exceeds the amount planned by 4 thousand tons.

We will make use of investments of over 700 mln rubles, including construction – around 250 mln rubles. We develop drilling – both exploitation and prospecting - very actively as compared to previous years. According to the Agreement with the government Saratovneftegaz and its service companies’ taxes due to be paid to the consolidated budget of the region in 2006 was to be 442 mln rubles. The results of the last 11 months show that the plan on taxes has already been fulfilled.

By the way, the rating made by the magazine ‘Expert-Volga’ on our region’s companies numbers Saratovneftegaz the 4th according to production sales amounts.

- Your company is a major well-doer of the Saratov region. Please brief us on essential priorities of RussNeft’s strategy of social responsibility.

Our priorities agree with the key national projects – first and foremost they are education, healthcare, agriculture. The funds are allocated to the very point where there has traditionally been lack of budgetary funds – they are schools, kinder gardens, regional hospitals, feldsher’s stations in small villages, housing and utilities infrastructure, cultural facilities. Not a region of our operation has been left without support.

I’ll draw a few examples - module boiler rooms have been acquired and installed in the Krasnoarmeisk region for schools, pupils of the Engels region have received computers. Over 2 mln rubles have been allocated by RussNeft to capital repairs and preparing schools and kinder gardens for another year of studies in the Perelyubskii region. In the region of Novoburassk an accessory building to the kinder garden has been completed and a bus for children’s transportation to school at the small village Aryash has been acquired. The children’s recreation camp ‘Rovesnik’ has received cushioned furniture. On the Fedorov region’s request 3 minibuses ‘Gazel’ and a bus ‘PAZ’ have been acquired. The buses and cars have been acquired for the Rovensk and Lysogorsk regions as well.

The focus was on medical institutions as well – the repair of a Krasnoyarsk district hospital in the Engelsk region was financially supported, the hospitals of the Atkarsk and Saratov regions got modern equipment. Fire-alarm systems have been installed at the district hospitals of the same Saratov region, and at the central hospital of the small village Rovnoye. We gave substantial support in acquiring equipment to feldsher-midwife stations at the Lysogorsk region. Moreover, Saratovneftegaz made a nice gift for the children of budgetary organizations workers – over 70 trip packages to health camps have been acquired for them. Children from Marks, Lyslye gory, Rovniy passed their holidays on the Volga bank in August.

In Tatischevo this summer running repairs of the regional recreation centre have been made and a public-address and musical system, musical instruments for children’s school were acquired.

- Any other social problems RussNeft helps resolve?

Certainly, I would like to point out an important area of cathedrals construction and reconstruction (the activity is underway in the Sovetskiy, Lysogorskiy, Ivanteevskiy regions). RussNeft has allocated 10 mln rubles to reconstruction of an eastern orthodox Saint Nikolay friary in Saratov. We believe it is socially relevant to boost the recovery of our cultural heritage.

It is safe to say that a certain trait of RussNeft’s regional policy of social responsibility has become the support of children and youth’s sport. I would like to mention that at Saratovneftegaz itself over 20 years there have existed a tradition to carry out summer and winter sports competitions, both average executives and top management of the company participate in the competitions with a great pleasure. That is why it is a matter of honor for us to support the Saratov sport.

This June sportsmen and coaches’ trip to Kickboxing Championship of Russia to Chelyabinsk. In November Saratovneftegaz became the general sponsor of  the 2nd open Cup of Russia on kickboxing among the clubs, which took place in Saratov. Sports equipment for youth’s sports centre ‘Olymp’ at the small village Lysiye gory has been acquired.

More of our social projects, supporting sport are the construction of a skate park for extreme sports at the quay of Kosmonavty and sports equipment acquisition for schools and kinder gardens of the Volzhsk region of Saratov. Tennis tables and buildable sports complexes have been acquired of the funds allocated by RussNeft.

With company’s financial support repairs of the sports complex Lider at the Pavlovka small village of the Marksovsk region have been fulfilled. In Saratov 10 children’s playgrounds have been installed free of charge.

- Support of youth’s healthy way of living is undoubtedly really important at our times. And is there anything underway to support senior citizens?

OAO Saratovneftegaz is deeply grateful to all the veterans – oil industry workers of the company - for their contribution to the establishment and development of the oil industry of our region. The management of RussNeft and Saratovneftegaz remembers and values the labour of several generations of oil and gas industry workers

To support our former employees the company annually gives monetary benefits, organizes welcome to war and rear area veterans, according to veterans’ requests allocates funds to medication and emergency needs. Our pensioners are provided with free trip packages to sanatorium-preventoriums. We also support the public committee of the Saratov fuel and energy complex (SarTEK) – we support the exploitation of the museum complex Neftegazenergetika at Park Pobedy at Sokolovaya gora, we carry out joint efforts.
- Sergey Nickolaevich, could you give your assessment of the relations between RussNeft and the regional government?

I would call them a constructive dialogue based upon conscientious performance of the obligations incurred. You can see that the year has not ended yet but you can already draw the conclusions of work in connection with the Agreement with the government. We have fully met our social obligations; important projects in 14 regions of Saratovneftegaz’s operation have been funded before the deadline.

I would point out that Saratovneftegaz’s business plan for 2007 has a substantial increase of all the economic indicators as compared to this year. For instance over 1 billion rubles of investment has been planned – a substantial sum for our region. RussNeft plans to allocate 392 mln rubles to drilling alone at the Saratov territory. I believe this anything but proves that the Saratov region for the company is a key region with prospective of long-term cooperation.

Welfare will be developed actively as well. In the nearest future there will be a signing of another Agreement on cooperation between Oil and Gas Company RussNeft and the government of the region. The agreement will contain not only separate social projects but a specially developed welfare programme aiming at a complex resolving of major problems and support for regions of Saratovneftegaz’s operation. At that, the priorities will remain – education, healthcare, support for a healthy way of living and care for the cultural heritage.