RussNeft to invest in 2006 nearly RUR600 million in development of ‘Krasnodar Oil Refinery – Krasnodarekoneft’ ZAO

The company has developed short and long-term plans for upgrading the refinery to be submitted to the regional administration in the coming three months.
As reported earlier, in the end of December 2005 RussNeft reached an agreement in principle on acquiring a 75% stake at ‘Krasnodar Oil Refinery – Krasnodarekoneft’ ZAO. Starting form January 2006 RussNeft assumed operational control over the association and its production activity.
With RussNeft operating in the Kuban region the tax proceeds to the local budget will be doubled up to RUR200 million.
In the course of the meeting the parties also discussed some items of mutually beneficial cooperation between the region and the holding, outlined prospects for the development of the oil refining capacities of the company over the Kuban territory. 
‘Krasnodar Oil Refinery – Krasnodarekoneft’ ZAO produces high quality feed for petrochemistry. The refinery also makes diesel oil meeting the requirements of Russian and international standards, as well as bitumen for road industry. The refinery is the country’s only producer of high density fuel for jet engines of T-1pp type. The processing capacity of the refinery is 3.1 million tons of crude oil a year.
Its proximity to the sea ports of the Krasnodarsky krai makes it commercially attractive and allows to create flexible logistics schemes for trading oil products.
“The Krasnodar Refinery along with Orsknefteorgsintez is the basis for the development of the company’s refining sector. In this connection the successful and mutually beneficial cooperation with the leadership of the region is the best guarantee for efficient development and upgrading of the Krasnodar Refinery,” said President of RussNeft Mikhail Gutseriev.
Moreover, the President pointed out that the Company was ready to take part in social and charitable programs of the local community in the Kuban.
Oil Company RussNeft OAO is a vertically integrated oil holding ranking among the ten first-rate oil and gas companies of this country. In the structure of RussNeft there are 30 producing entities, 3 oil refineries, 2 transport companies, and a modern retail network numbering 300 gas-filling complexes. The entities of the company are found in 17 regions of Russia and CIS. Its total recoverable reserves exceed 630 million tons with 17 million tons of annual oil production.