The Sporyshevskoe, Meretoyakhinskoe, Novogodnee, Yaraynerskoe, Pyakutinskoe и Malo-Pyakutinskoe Fields

Conclusions 1. Licenses for hydrocarbon production within the scope of these Fields are held by OJSC "GazpromNeft" and its subsidiaries. 2. Ultimate current recoverable oil reserves of the considered Fields account for 152.3 million tons , including 110.9 million tons of С1 Category, and 51.3 million tons of С2. Category. In addition, the Cenomanian deposits of the Novogodnee Field have a reservoir of free gas with reserves of 9.3 billion cubic meters ( С1). 3. Current oil production accounts for 7.96 thousand tons per day (2.9 million tons on an annualized basis). 4. At the present time, all Fields exhibit problems with the continuation of operation in current mode. Substantial investment is required in order to maintain and/or increase the production. 5. Resource potential of these Fields at least allows to double current production by 2015. 6. Most Fields have well-developed infrastructure, so there is no need in significant investment to create it. 7. Detailed geologic survey and feasibility study of the entire data are required to assess the value of these assets. Approximately, their value may amount to about $1 billion US dollars. 8. Despite the difficulties in the global financial markets, the maximum financial results can be obtained from these assets provided their consolidation, pre-sale preparation (2-3 years) and subsequent IPO. Such a project can be expanded by addition of the neighboring companies, i.e., LLC “LanRus-Nedra”, LLC “YangPur” and OJSC “TekhNeftInvest” 1.

1 Now the companies are in a difficult financial position and offered for sale.

Created by Cornerstone Translations Metretoyakha Field Overview The considered Fields are located in the Yamalo-Nenets Autonomous District.

Licensing Currently, licenses for the development of these Fields belong to GazpromNeft and its three subsidiaries (ZapolyarNeft, MeretoyakhaNefteGaz and GazpromNeft-NoyabrskNefteGaz).

JSC “GazpromNeft” directly holds a license for Pyakutinsky license area. This license ( СЛХ 13765 НР ) was issued to the company on the 21 st of September 2006, in substitution of the previously valid license СЛХ 00946 НР due to the name change of the subsurface user (up to March 2006 it was called OJSC “SibNeft”. License expires at the end of 2025. No information available in respect of license obligations and level of their fulfillment.

LLC “ZapolyarNeft” holds licenses for the Novogodnee ( СЛХ 11767 НЭ ) and Yaraynerskoe (СЛХ 11768 НЭ ) Fields. Both licenses were issued to the company on the 1 st of October 2003 under the renewal of the previously valid licenses СЛХ 00710 НЭ and СЛХ 00721 НЭ that belonged to OJSC “Sibneft-NoyabrskNefteGaz”. License for the Novogodnee Field expires in August 2013; License for the Yaraynerskoe Field expires in February 2014. No information available in respect of license obligations and level of their fulfillment. Besides the considered licenses, the company holds licenses to develop the Vyngapur, North-Vyngapur, West-Vyngapur and Limbayahinsky Fields.

JSC “GazpromNeft” holds a license for the Sporyshevskoe Field ( СЛХ 02126 НЭ ). The License was issued in substitution of the previously valid license СЛХ 00730 НЭ , with the license validity period extended until the end of 2047. No information available in respect of license obligations and level of

Created by Cornerstone Translations Metretoyakha Field their fulfillment. The Company is the main oil producing unit of GazpromNeft, and beyond the license for the Sporyshevskoe Field it has 26 production licenses.

JSC “MeretoyakhaNefteGaz” holds a license for the Meretoyakhinskoe Field. The license was issued in October 22, 1999 for a term of 20 years (until June 2019). No information available in respect of license obligations and level of their fulfillment. The company doesn't have any other licenses for subsoil use.

In order to transfer the licenses considered, all of them should be reissued to OJSC “MeretoyakhaNefteGaz” or to a new legal entity – a subsidiary of GazpromNeft.

Exploration Degree and Resource Potential Ultimate current recoverable reserves of the considered Fields account for 152.3 million tons , including

110.9 million tons of С1 Category, and 51.3 million tons of С2. Category.

Initial Recoverable Current Reserves, th. tons Cumulative Daily Field production, Production

АВС 1 С2 th. tons Rate, tons per day Sporyshevskoe 56 756 4 037 32 707 5 393 Novogodnee (crude oil) 66 895 8 283 11 384 383 Yaraynerskoe 23 625 4 896 6 869 2 098 Meretoyakhinskoe 13 481 15 594 360 88 Pyakutinskoe 1 032 4 607 2 - Malo-Pyakutinskoe 400 1 4 000 1 3 - TOTAL (crude oil) 162 189 41 417 51 325 7 962 Novogodnee, ПК 1(free gas) 9 327 - - -

The Sporyshevskoye Field The Field was discovered in 1993. Current remaining oil reserves account for 28 million tons.

Initial Recoverable Current Reserves, th. tons Cumulative Daily Occurrenc Field/Reservoir production, Production e depth АВС 1 С2 th. tons Rate, tons per day Sporyshevskoe 56 756 4 037 32 707 5 392,5 ПК 15 1 860 78 48 1.2 1 ПК 16 1 820 749 350 186 2 90.7 ПК 16 1 820 150 131 60 ПК 19 1 905 12 143 1 646 8 682 1 573.2 ПК 20 1 940 2 178 239 1 867 161.4 АС 4 2 055 4 472 147 1 703 574.3 АС 6 2 090 6 238 63 3 437 517.5 АС 7 2 105 84 48 20 4.0 АС 8 2 140 60 35 49 - АС 9 2 140 58 25 4.1 АС 12 2 220 108 75 5.7 БС 0 2 227 20 14 4 1 49.2 БС 1 2 227 343 179 БС 2+3 2 230 191 97 - -

1 Indicative values.

Created by Cornerstone Translations Metretoyakha Field БС 4 2 285 9 30 2 - БС 5 2 300 150 101 - БС 6 2 345 1 184 20 909 132.9 0 БС 7 2 364 122 46 - - 1 БС 7 2 374 431 65 - - 2 БС 7 2 385 1 159 47 255 81.3 БС 0 2 390 1 202 114 1 284 8 92.5 БС 8 2 376 183 9 41 0 БС 10 2 445 13 478 713 9 266 1 496.2 1 БС 10 2 463 5 904 2 082 234.3 2 БС 10 2 499 122 - - БС 11 2 560 6 036 2 535 374.0 ЮС 1 2 888 26 - - At exploratory well testing, oil inflow varied in a wide range: between less than a ton up to 154m 3/day 3 1 (well No.666, reservoir ПК 19 ) and 466 m /day (well No.654, reservoir БС 10 ).

The Field is thoroughly studied. 386 wells have been drilled within the license area. The share of АВС 1– category reserves amounts to 93% of the Initial Recoverable Reserves.

The Field has been in operation since 1995. At present (as of 01 October 2008), 58% of the recoverable 0 reserves have been collected. Basic development targets – deposits of the reservoirs ПК 19 and БС 10 worked out by 70%.

Petroleum crude oil produced on the Sporyshevskoe Field is of high quality: Light (0.83 g/cm 3), low viscosity (less than 5 mPa*s), low-sulfur (0.2%), low in tar (5.1%) and low in paraffin (4.2%).

Created by Cornerstone Translations Metretoyakha Field

/Symbols: Structural Contours on the top of the reservoir ПК 19 Structural Contours on the reflector The outer contour of the oil-bearing

Created by Cornerstone Translations Metretoyakha Field The inner contour of the oil-bearing The contour of the stock of the previous counting Wells No. Wells Abs. mark of the roof level Effect thickness / thickness of oil saturation/

Figure 1. Reserve Estimate Map for the Reservoir ПК 19 of the Sporyshevskoe Field.

Created by Cornerstone Translations Metretoyakha Field Structural Contours on the top of the reservoir ПК 19

Created by Cornerstone Translations Metretoyakha Field 0 Figure 2. Reserve Estimate Map for the Reservoir БС 10 of the Sporyshevskoe Field.

The Novogodnee Field 1 The Novogodnee Field was opened in 1976, exploratory well 120 р at the Reservoir БВ 3 .testing.

The Field is located within the Vyngapur Petroliferous Region (NGR) of the Nadym Purskoy Oil and Gas-Bearing Area (NGO). Tectonically, the Novogodnee Field is correlated with the same name elevation, located within the Vyngapur shaft of Yamal-Taz megasyneclise.

0 1 3 The deposit is multilayered. Productivity is determined on the Field in reservoirs ПК 1, БВ 3 , БВ 3 , БВ 4 , 1 2 Ач 1, Ю1 , Ю1 , Ю2, Ю3. Free gas reserves have been discovered in the reservoir ПК 1, and all the other reservoirs are oil-saturated. The Jurassic strata have the largest share of the reserves.

Initial Recoverable Current Reserves, th. tons Cumulative Daily Occurrenc Field/Reservoir production, Production e depth АВС 1 С2 th. tons Rate, tons per day Novogodnee (crude oil) 66 895 8 283 11 384 383 0 БВ 3 2 346 106 0 БВ 3 (area well No. 120 р) 2 346 266 1 БВ 3 2 287 6 917 2 994 n/a 3 БВ 4 (area well No.156 р) 2 541 10 951 996 БВ 9 ( Ач ) 2 859 1 551 1 171 1 1 Ю1 2 909 49 334 4 200 1 183 n/a 2 Ю1 2 905 5 988 1 455 193 n/a Ю2 (area well No. 133p) 2 929 4 860 Ю3 174 195 Novogodnee, ПК 1(free gas) 775 9 327 - -

Figure 3. Geological cross-section of the Novogodnee Field

Created by Cornerstone Translations Metretoyakha Field crude oil produced on the Novogodnee Field is light (0.8 g/cm 3), low-viscous (3.75 mPa*s), low-sulfur (0.15%), as well as low in paraffin (2.92%) and low in tar (2.77%).

The Yaraynerskoe Field The Field was discovered in 1973. Hydrocarbon deposits are found in 40 productive formations, associated with the Lower-Middle Jurassic, Upper Jurassic, Achimov, Neocomian and Aptian-Albian- Cenomanian Petroleum Play. A total of 73 hydrocarbon deposits, one of them is oil and gas (reservoir

ПК 20 ), and the rest – oil.

Initial Recoverable Current Reserves, th. tons Cumulative Daily Occurrence Field/Reservoir production 1, Productio depth 2 АВС 1 С2 th. tons. n , tons per day Yaraynerskoe 23 625 4 896 6 869 2 098 ПК 20 1 690 1 530 52 889 431 АВ (North and South Domes or 1 reservoirs АВ 1, АВ 2, АВ 3, АВ 3 , АВ 5, 1 1 1 950 3 605 1 222 1 106 528 АВ 5 , АВ 6, АВ 7, АВ 7 , АВ 8, АВ 9, АВ 10-11 ) БВ (North and South Domes or 0 0 reservoirs БВ 1, БВ 1 , БВ 2 , БВ 2 , 1 1 2 280 10 951 996 4 466 862 БВ 2 , БВ 4, БВ 4 , БВ 5, БВ 6, БВ 8, 0 2 БВ 8 , БВ 8 ) 1 Ач ( Ач 0, Ач 0 , Ач 1, Ач 2, Ач 3) 2 650 1 551 1 171 140 1 ЮВ 2 925 5 988 1 455 268 275 Productive formation reservoir ПК 20 has the best porosity and permeability properties. Reservoirs of АВ and БВ groups are also characterized by relatively high porosity and permeability properties. Achimov and Jurassic formations have poorer reservoir properties.

1 As of 01.10.2008 2 Average values for 2007. During the first 9 months of 2008 the average daily field production dropped by 25% (from2 098 to 1 567 tons per day).

Created by Cornerstone Translations Metretoyakha Field (North Dome, Eastern Slope, South Dome) Figure 4. Scheme of the combined contours of the Yaraynerskoe Field

Petroleum crude oil produced on the Yaraynerskoe Field is light (less than 0.850 g/cm 3 in surface conditions), low-viscous (less than 5 mPa*s), low-sulfur (less than 0.5%), as well as low in paraffin (1.5- 3%) and low in tar (less than 5%). In surface conditions, petroleum crude oil is light with yield of light fraction of 40÷50%.

The Meretoyakhinskoe Field The Field was discovered in 1987. As assumed in the approved version of the reserves calculation, there 2 3 1 are 4 productive reservoirs in the Field: БС 6 (2 deposits), БП 6 , БП 7 (2 deposits) and Ач 7, Ultimate recoverable oil reserves account for – 29 million tons.

Initial Recoverable Current Reserves, th. tons Cumulative Daily Occurrence Field/Reservoir production, Production depth АВС 1 С2 th. tons Rate, tons per day Meretoyakhinskoe 13 481 15 594 360 1 88 1 БП 2 (area well No. 5, 7, 10, 24 and 6 3 193 5 355 9 288 N/A N/A area well No. 50) 3 БП 6 3 152 6 508 4 540 N/A N/A БП 1 (area well No. 2, 7, 10 and 7 3 145 1 482 1 245 N/A N/A area well No. 28) Ач 7 3 382 136 521 - - At exploratory well testing oil inflow varied in a wide range: from the first tons (well No. 3, 7, 10, 23, 25, 29 and 56) up to more than 60 tons per day (well No.1 and No.7).

The Field Geological Model Update and Revised Estimation of Reserves took place in 2008. In Achimov deposit, in addition to the previously selected reservoir Ач 7, productivity has been tied up with reservoirs

Ач 1, Ач 2, Ач 3, Ач 4 and Ач 6. A significant part of the resources of the БП group reservoirs was attributed to these deposits. As a result, geologic reserves of the БП group reservoirs have declined by 36%.

In absolute terms, total geologic reserves of the Field have decreased slightly (6%). The share of С1 reserves has reduced significantly (35% vs. 46%).

Furthermore, the authors found it possible to calculate the increase of the total recoverable reserves resource potential of the Field. It was done though the use of higher oil recovery factor (ORF) (for Achim facilities ORF reaches 37%). As a result, the ultimate initial recoverable reserves were estimated at 32.5 million tons , so that 12% up than the approved version. It should be noted that the data from the recent calculation of reserves is unlikely be examined in the State Reserve Committee (SRC).

1 2 3 1 Operation of the reservoirs БП 6 , БП 6 and БП 7 were carried out jointly.

Created by Cornerstone Translations Metretoyakha Field

3 Figure 5. The Structural Map on the top of the reservoir БП 6 of the Meretoyakhinskoye Field Petroleum crude oil of the Meretoyakhinskoye Field is of high quality: Light (0.83 g/cm 3), low viscosity (less than 5 mPa*s), low-sulfur (0.2%), low in tar (5.1%) and low in paraffin (4.2%).

Created by Cornerstone Translations Metretoyakha Field The Pyakutinsky Area Oil and Gas content of the Pyakutinskoe and Malopyakutinsky Fields was established in 1988 and 1986, respectively. The State Reserve Register as of 01 January 2004 recorded initial recoverable oil reserves in the Fields in the amount of 9.3 million tons.

Initial Recoverable Current Reserves, th. tons Cumulative Daily Occurrence Field/Reservoir production, Production depth АВС 1 С2 th. tons Rate, tons per day Pyakutinskoe 1 032 4 607 2.17 3.91 0 БС 9 2 765 - 183 1 БС 9 2 780 153 290 2.17 3.9 3 БС 9 2 810 41 212 4 БС 9 2 821 129 601 Ач 1 2 951 171 1379 Ач 2 2 976 197 949 2 Ач 4 3 055 174 748 0 Ю1 3 241 167 245 Malo-Pyakutinskoe 174 2 2 287 2 2.91 4.23 2 БС 9 2 741 174 677 Ач 4 3 060 - 118 2.91 4.2 Ач 7 3 133 - 810 Ю0 3 184 - 615 Ю2 3 243 - 67 TOTAL 1 206 6 894 5.08 8.1 The presented Geological Reserve Data of the Pyakutinskoe Field is consistent with the Reserve Balance Data. In this Presentation, the authors predict a “potential” oil recovery factor at 0.252 unit fraction, despite the fact that in balance the average oil recovery factor amounts to 0.17 unit fractions ( С1 category

– 0.18, while С2 category – 0.16). The increase in oil recovery proposed by the authors of the presentation looks unjustified.

Geological Reserves of the Malo-Pyakutinskoe Field have increased significantly compared to the data from the Reserves Balance Date as of 01 January 2004: Category С1 from 974 thousand tons up to 2 258 thousand tons; Category С2 from 20 819 thousand tons up to 26 525 thousand tons. The exact structure of new reserves are not given, by based on the pattern of combined units, this happened due to enhanced categorization and increased contours of the oil-bearing Achim and Jurassic oil deposits. These deposits have poor permeability and porosity and, consequently, low values of ORF. Nevertheless, the authors of the presentation suggest using the average value for the field recovery factor of 0.226 unit fractions; that looks excessive. Probably, the real average value of ORF for the Malo-Pyakutinkoe Field stands at 0.15 unit fractions. Accordingly, the Field recoverable reserves account for 400 thousand tons for С1 category, and 4 million tons for С2 category.

Ultimate explored recoverable reserves (resource potential) of the Pyakutinskoe Site may account for 1.4 million tons for С1 category, and 8.6 million tons for С2 category.

1 At the time of the well No. 107 shutdown. Currently, the production is not conducted. 2 Data as of 01.01.2004. 3 At the time of the well No.559 shutdown. Currently, the production is not conducted.

Created by Cornerstone Translations Metretoyakha Field

(The Pyakutinskoe Field The Malo-Pyakutinskoe Field)

Figure 6. A schematic map of the combined contours of the Pyakutinsky Area

As of the 1 st of November 2008, 30 wells have been drilled within the Pyakutinskoe Field , including 21 wells actually at the Pyakutinsky Area (7 exploratory, 12 wildcat, 2 production wells).

Petroleum Crude Oil of the Pyakutinskoe and Malo-Pyakutinskoe Fields is of high quality: Light (0.847 g/cm 3), low viscosity (0.6 mPa*s), low-sulfur (0.46%), low in paraffin (1.87%) and low in tar (4.5%).

Production

The Sporyshevskoe Field The Field was brought into development in 1995. Currently, the Field has 13 operating facilities, some of which consist of several reservoirs.

The Field is in the stage of declining production. Maximum production was reached in 2003 and amounted to 5 620 thousand tons. During the next five years, the production decreased by 65%. Expected output in 2008 is 1 974 thousand tons. Expected cumulative output at the end of 2008 is 33 157 thousand 0 tons (58% from the Initial recoverable Reserves). The main operational facilities ( ПК 19 and БС 10 ) worked out by 70%. Reservoir ПК 20 is worked out by 86%, and designed oil recovery is exceeded for 0 reservoir БС 8 .

Currently, the production decreases by 18-19% per year. Expected output in 2009 is 1 653 thousand tons.

Created by Cornerstone Translations Metretoyakha Field

(The Dynamics of Oil Production in the Sporyshevskoe Field Annual oil production, th. tons Depletion IRR (%) Water Cutting (%) 2009 (forecast)

Currently, the Field operates 261 exploitation wells and 88 injection wells. Well flow rates vary in a large range (from 0.04 up to 156 tons per day). Current average daily flow rate is 20.2 tons per day. The average water cut is 91.5%.

Distribution of Wells in Oil Flow Rate and Water Cut

Oil (tons per from 0 from 2 from 5 from 10 from 20 from 50 from 100 day) to 2 to 5 to 10 to 20 to 50 to 100 (%) to 5 from 5 to 20 2 from 20 to 50 1 3 10 5 1 from 50 to 80 1 6 16 19 6 1 from 80 to 90 5 7 13 8 1 from 90 to 95 3 11 12 14 17 1 from 95 to 98 5 16 15 25 19 from 98 to 7 3 2 1 100 Approved version to the Flow Chart provides 16 wells 1 to be drilled in 2008 – 2010; 28 wells 2 to be transferred to other facilities; and a complex of geological and technical measures to be perform (formation , physical-chemical methods of bottom hole treatment, hydrodynamic methods, threshold limit value, water shutdown, squeeze cementing, directed perforation, etc.).

1 including 14 wells with horizontal tailing-in. 2 Including 15 wells with horizontal hole kickoff (BGS).

Created by Cornerstone Translations Metretoyakha Field Implementation of these design solutions and the subsequent (after the year 2010) investment in the field production maintenance, will, in the authors' view, by 2010 to overcome the drop in oil production and bring it to 2015 up to 1962 tons.

The Novogodnee Field The Field was brought into development in June 1986 by launch of well No.121 р on Achimov formation. 1 The first well in reservoir БВ 3 (No. 1152) was completed in December 1986. A year later the first production well (No. 500 р) was put into operation on the Jurassic sediments, which had been drilled in the area of the exploration well No. 120 р.

1 1 Currently, the Field has 2 production facilities ( Ю1 and БВ 3 ). The western reservoir on the sediments 1 1 Ю1 is in the commercial development; previously developed pool БВ 3 is in conservation.

0 3 1 2 Seven other facilities ( БВ 3 ; БВ 4 ; Ач ; Ю1 (western reservoir); Ю1 ; Ю2; Ю3) are listed in the experimental program.

The Current Design Project: "An Analysis of the Novogodnee Field Development with the Feasibility of the Pilot Work Sections" (“The Novogodnee Field Experimental Program Flow Chart” for the years of 2006 - 2010) (approved by the protocol of CDC Rosnedra No. 3942 dated 28.12.2006) and Designer Supervision for the Implementation of The Novogodnee Field Experimental Program Flow Chart (No. 4209 dated 27.12.2007).

Distribution of Wells in Oil Flow Rate and Water Cut

Oil (tons per from 0 from 5 from 10 from 20 from 35 from 60 day) to 5 to 10 to 20 to 35 to 60 TOTAL (%) to 5 1 1 from 5 to 20 2 1 3 from 20 to 50 1 1 from 50 tо 90 4 3 1 2 10 from 90 to 18 13 3 34 100 TOTAL 20 17 7 2 3 49 Since 2004, the production in the Novogodnee Field has been rapidly watered out (from 13 to 92%).

Created by Cornerstone Translations Metretoyakha Field

(The Dynamics of Oil Production in the Novogodnee Field Annual oil production, th.tons Depletion IRR (%) Water Cutting (%) 2009 (plan)

The following range of activities is planned to perform in order to restore the production in the Field:

1. Brining the total well stock up to 442 units, including the production wells – 257; injection wells 1 – 168. This includes: the main part of reservoir Ю1 has well stock for drilling - 159 ГС , among them: • Production wells – 79, • Injection wells – 80, • Side kickoffs ГС – 4. 1 For the reservoir БВ 3 well stock for drilling – 14 ГС , among them:

• Production wells – 1, • Injection wells – 1, • Side kickoffs – 6. • Side injection kickoffs – 6. 2. Implementation of the experimental program on water-alternated-gas injection in the western 1 reservoir Ю1 and in well cluster segment № 104. 3. Realization of a research program and withdrawal of a well from non-operated stock. Approximately, the implementation of these solutions will enable to increase the production for up to 2 million tons per year.

Gas reservoir formation ПК 1 is currently being developed. In accordance with the decision, the reservoir commissioning will be carried out jointly by OJSC “GazpromNeft” and LLC “Gazprom Production Noyabrsk” (the Operator). For this purpose, a plan was compiled to conduct joint work for bringing the reservoir into development by “GazpromNeft-NoyabrskNefteGaz”, “Gazprom Production Noyabrsk” and “TyumenNIIGiprogaz”. In 2008 LLC “TyumenNIIgiprogas” finalized the development of the “Flow Chart”. At the project implementation it is intended to use part of the existing stock of oil

Created by Cornerstone Translations Metretoyakha Field wells 1 and transition of the water pipeline system under the PPD for pumping gas. The transition of the 1 first wells of the injection fund formation БВ 3 on the extraction of from ПК 1 was planned to carry out in October – November 2008. Transportation of gas is expected to be carried out at the Vyngapur field gas treatment plant, LLC "Gazprom Production Noyabrsk".

The Yaraynerskoe Field

The Field was discovered in 2000. The primary deposits are exploited seams БВ 2, БВ 5, БВ 6, БВ 8, associated with the Northern Dome, as well as the formation Ач I. Later on, reservoir formations ПК 20 , 1 АВ 3, АВ 7, БВ 1, БВ 4, БВ 4 were involved into the development.

Currently, 23 deposits combined into 18 production facilities, are under development, containing 78% of the Field’s geologic reserves.

1. ПК 20 1 2. Ач : Ач 0, Ач 0 , Ач1, Ач 2, Ач 3 3. ЮВ The North Dome: 4. АВ 3 1 5. АВ 3 6. АВ 7 1 1 7. АВ (small: АВ 1, АВ 2, АВ 5, АВ 5 , АВ 7 , АВ 8, АВ 10-11 ) 0 8. БВ 1+БВ 1 0 1 9. БВ 2 +БВ 2+БВ 2 1 10. БВ 4+БВ 4 11. БВ 5 12. БВ 6 2 13. БВ 8+БВ 8 The South Dome 14. АВ 9 15. БВ 1 1 16. БВ 4 17. БВ 8 0 0 0 2 18. АВ +БВ (small: АВ 6, АВ 10-11 , БВ 1 , БВ 2 , БВ 2, БВ 5, БВ 8 , БВ 8 ) The Current Design Project is " The Yaraynerskoe Field Development Flow Chart” (protocol of CDC No. 3678 dated 15.06.2006), “Designer Supervision for the Implementation of the Yaraynerskoe Field Development Flow Chart” (protocol of CDC No. 4374 dated 28.08.2008).

At 31% of reserves depletion, water cut is 95%. Apparently, it is consequence of ill-considered use of formation hydraulic fracturing (GRP). To remedy this situation, GazpromNeft experts proposed to arrange water shut off (water production restraining) at six productive formations ( ПК 20 , БВ 2, АВ 9, БВ 4

North and South Domes), АВ 7), which account for about 80% of the water produced at the field. Different types of remedial cementing shall be performed at all production wells of these facilities, as well as part of the wells is recommended to be stopped. After geophysical study in the stopped wells is conducted, it is resolve the issue of their future exploitation.

1 This does not exclude the drilling of new wells.

Created by Cornerstone Translations Metretoyakha Field

(The Dynamics of Oil Production in the Yaraynerskoe Field Annual oil production, th.tons Depletion IRR(%) Water Cutting (%) 2009 (forecast)

In order to increase the scope by production, it is proposed to put into operation at the North Dome to the 0 1 facilities БВ 1+БВ 1 , БВ 4+БВ 4 , БВ 6 as well as reservoir formation АВ 10-11 ,one well transferred from the underlying formations.

It is proposed to drill one horizontal hole in the remaining reserves concentration zone for the facilities 0 1 ПК 20 , АВ 7, БВ 2 +БВ 2+БВ 2 .

For Jurassic deposits it is scheduled to perform the advance (with respect to the project) formation of single-row placement of wells with a distance of 600 m: In 2008-2009 it is planned to drill 24 and 27 wells respectively, while the design substantive drilling of the Jurassic deposits was envisaged in 2011. By the end of 2009, the current production pool was 57 wells, in contrast to the designed 13, and the current Discharging facility – 19 wells (12 were designed)

All proposed activities, at best, will stabilize oil production at current levels over the short period of time (up to 3 years), and then its decline continues.

The Meretoyakhinskoe Field 1 2 3 Since 2000 the field has been in service. It operates 1 facility which consists of the reservoirs БП 6 , БП 6 1 and БП 7 . Anticipated cumulative production at the end of 2008 is 360 thousand tons.

2008 witnessed more than double production decline (from 95 to 40 thousand tons per year), and in 2009 it is expected to continue (forecast production – 21.9 thousand tons)

1 According to the other sources - since 1996.

Created by Cornerstone Translations Metretoyakha Field

(The Dynamics of Oil Production in the Meretoyakhinskoe Field Annual oil production, th.tons Depletion IRR(%) Water Cutting (%) 2009 (forecast)

Currently, the Field operates 18 exploitation wells and 4 injection wells. Well flow rates vary in a large range (from 0.1 up to 177 tons per day). Current average daily flow rate is 4.9 tons per day. The average water cut is 57%. Reserve depletion of the target formation is 2.7% 1.

Approved Flow Chart provided the drilling of 707 wells. A new Design Project shall be drafted due to the revised concepts on the geological structure of the Field. Approximately, given the timeframe for the preparing and bringing the facilities into development the field production may be about 1 million tons per year.

The Pyakutinsky Area The Pyakutinskoe Field hasn’t practically brought into development. In total, the Field has 13 productive reservoirs (9 layers):

1 • БС 9 2 • БС 9 (well No. 536) 2 • БС 9 (well No. 530) 2 • БС 9 (well No. 534) 2 • БС 9 ач (well No. 547, 548) 2 • БС 9 ач (well No. 300) 3 • БС 9 -1 ач 3 • БС 9 -2 ач 4 • БС 9 ач 1 • Ю0 (well No. 300) • Ю0 (well No. 531) • Ю0 (well No. 545) • Ю1 (well No. 545)

1 According to the latest recalculation of the reserves - 4%.

Created by Cornerstone Translations Metretoyakha Field 2 Only one reservoir - БС 9 (area of well No. 536) out of 13 productive pools are involved into the development. As of 01.11.2008, the Field has 3 wells, and only 1 well (No. 107) is in production. Two wells (not involved in the development) are temporary shutdown (in conservation).

The Well No. 107 has been operated since 2006, and on March 2008, it was transferred to an observation. Since then, production at the field is not carried out. Stopping oil flow rate of Well No. 107 was 3.9 tons per day. The maximum average oil flow rate was achieved in March 2007 and amounted to 4.8 tons per day. Stopping water cut of the Well was 81%.

The Malo-Pyakutinskoe Field was not practically brought into development. In total, the Field has 5 productive reservoirs:

2 • БС 9 (area of well No. 500) • БС 10 ач 1 • Ю0 area of (well No. 500) • Ю0 (area of (well No500) • Ю2 Out of 5 productive reservoirs, only one ( БС 10 ач ) is in operation. As of 01.11.2008, the Malo-Pyakutinsoe Field has 1 exploratory well (No. 559). The well has been operated since March 2005, but in April 2008 it was transferred in an observation. Since then, production at the field is not carried out. Stopping oil flow rate of Well No. 559 was 4.2 tons per day. The maximum average oil flow rate was achieved in March 2005 and amounted to 10.6 tons per day. Stopping water cut of the Well was 83%.

(The Dynamics of Oil Production in the Pyakutinsky Area Production from the Well No. 107, Pyakutinskaya, th.tons Production from the Well No. 559 Malo-Pyakutinskaya, th. tons Depletion IRR (%) Water Cutting (%) 2009 (forecast)

Based on the results of testing and trial operation of wells in the Field, it can be concluded that their commercial development is inefficient.

Created by Cornerstone Translations Metretoyakha Field Infrastructure and Equipping

The Sporyshevskoe Field The delivery of the commercial oil into a pipeline system of OJSC “Transneft” for further transportation by trunk pipelines is carried by the commercial metering unit Kholmogory Central Production Facility (CPF) of the Field.

The Novogodnee Field The Novogodnee Field is located in the Purovskoe area Tyuemtn Redion Yamal-Nenets at a distance of 75 km north-east of Noyabrks. The Field is located in the close proximity to the developed Vyngayakhinskoeye, Vyngapur, Ety-Pur Field with well-developed infrastructure. The nearest neighboring field is Yaraynerskoe.

In the south the Field is crossed by the branch of the Vyngayakhinskoe-Novogodnee-Vyngapur Pipeline, which further connects to the main Kholmogory-Fyodorovskoe-Surgut-Omsk Pipeline.

The delivery of the commercial oil into a pipeline system of OJSC “Transneft” for further transportation by trunk pipelines is carried by the commercial metering unit of the Vyngayakhinskoye Field.

Associated Petroleum Gas is transported by gas pipeline 530 х8 to the gas treatment plant and the Vyngayakhinskoe compressor station (AK Sibur). Low pressure associated gas is subject to flaring. Low- pressure associated gas utilization project of the Novogodnee Field is envisaged in the medium-term investment program of OJSC “Gazpromneft” for 2009-2010. “Disposal and Efficiency of APG (Associated Petroleum Gas) Utilization”. Also, the medium-term Investment Program provides the Project for equipping the field with tool-in-hand APG recording system.

The Yaraynerskoe Field The Yaraynerskoe Field is located in the Yamal-Nenets Tyuemen Region Purovskoe area. The closest major settlement is the city of Noyabrsk with the railway station and airport. It is located to 115 km west of the Field. The Field is connected to Noyabrsk by the hard surface highway.

The delivery of the commercial oil into a pipeline system of OJSC AK “Transneft” for further transportation by trunk pipelines is carried by the commercial metering unit of the Vyngayakhinskoye Field.

Associated Petroleum Gas is transported by gas pipeline 530 х8 to the Vyngapur compressor station (AK SIBUR Holding”). Low pressure associated gas is subject to flaring. Low-pressure associated gas utilization project of the Yaraynerskoe Field is envisaged in the medium-term investment program (of OJSC “Gazpromneft” “Disposal and Efficiency of APG (Associated Petroleum Gas) Utilization”- 2009- 2010). Also, the medium-term Investment Program provides the Project for equipping the field with tool- in-hand APG recording system. Low level of APG disposal in the first half of 2008 was caused by the gas pipeline commission on the design mode. In July the level of APG utilization was 96.2%.

The Meretoyakhinskoe Field Transportation of crude oil is performed through S-Yangtinskoe Field by the oil pipelines to Surgut and Omsk.

The Pyakutinsky Area Pressure Pipeline to the Sugmut Field has been built in the Pyakutinskoe Field. Its length is 38 km.

The Malo-Pyakutinsoe Field is not equipped; the crude oil produced from the well No. 559 р is self- delivered to the point of collection and treatment system at the Sugmutskoye Field.

Created by Cornerstone Translations Metretoyakha Field