OPEN JOINT STOCK OIL AND GAS COMPANY SLAVNEFT APPROVED BY APPROVED BY Annual General Meeting of shareholders of Board of Directors of ɈȺɈ NGK Slavneft ɈȺɈ NGK Slavneft Minutes # 38 dd 29 June 2010 Minutes # 8 dd. 21 May 2010 2009 A N N U A L R E P O R T President of ɈȺɈ NGK Slavneft ________________ Yu.ȿ. Sukhanov (sgd) Chief Accountant of ɈȺɈ NGK Slavneft ________________ ȺȺ. Shuvaev (sgd) (locus sigilli) 2 CONTENT DATA ON THE OPEN JOINT STOCK OIL AND GAS COMPANY SLAVNEFT......................................... 3 SHARE CAPITAL............................................................................................................................................... 3 LIST OF SUBSIDIARIES AND DEPENDENT COMPANIES OF OAO NGK SLAVNEFT .......................... 4 MEMBERS OF THE BOARD OF DIRECTORS OF OAO NGK SLAVNEFT............................................... 5 MEMBERS OF THE MANAGEMENT BOARD OF OAO NGK SLAVNEFT............................................... 6 REPORT ON PAYMENT OF THE DECLARED (ACCRUED) DIVIDEND ON SHARES OF OAO NGK SLAVNEFT IN 2009............................................................................................................................................ 7 DESCRIPTION OF KEY RISK FACTORS CONNECTED TO THE ACTIVITY OF OAO NGK SLAVNEFT.......................................................................................................................................................... 7 THE LIST OF TRANSACTIONS CONCLUDED BY THE COMPANY IN 2009 AND RECOGNIZED MAJOR TRANSACTIONS ACCORDING TO THE JOINT STOCK COMPANIES FEDERAL LAW, AS WELL AS OTHER TRANSACTIONS TO BE APPROVED AS MAJOR TRANSACTIONS (ACCORDING TO THE COMPANY’S ARTICLES OF ASSOCIATION) INDICATING THE ESSENTIAL CONDITIONS FOR EACH TRANSACTION AND THE COMPANY’S GOVERNANCE BODY THAT PASSED THE RESOLUTION TO APPROVE THIS TRANSACTION ................................................................................... 8 THE LIST OF TRANSACTIONS CONCLUDED BY THE COMPANY IN 2009 AND RECOGNIZED THE INTERESTED-PARTY TRANSACTIONS ACCORDING TO THE JOINT STOCK COMPANIES FEDERAL LAW.................................................................................................................................................. 8 CRITERIA OF THE DETERMINATION AND THE AMOUNT OF REMUNERATION (THE COMPENSATION OF EXPENSES) TO A PERSON WHO OCCUPIES THE POSITION OF THE SOLE EXECUTIVE OF OAO NGK SLAVNEFT, EACH MEMBER OF THE COLLECTIVE EXECUTIVE BODY OF THE COMPANY AND EACH MEMBER OF THE BOARD OF DIRECTORS OF THE COMPANY OR THE TOTAL AMOUNT OF REMUNERATION (THE COMPENSATION OF EXPENSES) OF ALL THESE PERSONS PAID OR PAYABLE ACCORDING TO THE RESULTS OF THE REPORTING YEAR.................................................................................................................................10 THE INFORMATION ON THE COMPLIANCE WITH THE CODE OF CORPORATE CONDUCT BY OAO NGK SLAVNEFT .....................................................................................................................................10 COMPANY’S POSITION IN THE INDUSTRY...............................................................................................12 COMPANY’S PERFORMANCE INDICATORS .............................................................................................12 UPSTREAM ........................................................................................................................................................12 RESERVES .......................................................................................................................................12 OIL PRODUCTION ..............................................................................................................................13 OIL PROCESSING .............................................................................................................................................16 OPEN JOINT STOCK COMPANY SLAVNEFT-YAROSLAVNEFTEORGSYNTEZ (OAO)......................................17 OPEN JOINT STOCK COMPANY SLAVNEFT YAROSLAVL MENDELEEV’S REFINERY (RUSOIL).........................18 OPEN JOINT STOCK COMPANY MOZYR REFINERY .................................................................................18 OIL AND OIL PRODUCT SALES IN THE RUSSIAN FEDERATION .............................................................19 OIL SALES ........................................................................................................................................19 FINANCIAL RESULTS OF THE COMPANY ACTIVITY.............................................................................20 REVENUES OF THE GROUP OF COMPANIES ...........................................................................................20 COSTS ............................................................................................................................................21 PRIME COST OF OIL AND GAS PRODUCTION...........................................................................................22 PRIME COST DYNAMICS AT SLAVNEFT-YANOS............................................................................23 PRIME COST DYNAMICS AT MOZYR REFINERY...............................................................................23 CAPEX...........................................................................................................................................23 SLAVNEFT-YANOS....................................................................................................................25 PROFIT ............................................................................................................................................27 THE COMPANY’S TAX POLICY ..............................................................................................................27 3 DATA ON THE OPEN JOINT STOCK OIL AND GAS COMPANY SLAVNEFT Full name of the Company: Open Joint-Stock Oil and Gas Company Slavneft Abbreviated name of the Company: OAO NGK Slavneft (hereafter referred to as the Company). Location at: Moscow, Russian Federation. Mailing address: 125047, Russian Federation, Moscow, 4th Lesnoy pereulok, 4. The date of the state registration of the Company and the Company’s registration number: the Company was registered by the Moscow Registration Chamber on August 26, 1994, the certificate of registration No. 033.530 OAO NGK Slavneft was entered into the Unified State Register of Legal Entities by the Moscow Inter- district Inspection of the Ministry for Taxes and Levies of the Russian Federation No. 39 on July 30, 2002: The main state registration number 1027739026270, the certificate of registration of series 77 No.007436304. Changes introduced into the constituent documents of OAO NGK Slavneft: were registered by the Interdistrict Inspectorate No. 46 under the Moscow of Federal Tax Service: on August 01, 2005 under state registration number 2057747654391 (the restated Articles of Association of the Company approved by the resolution of the General Meeting of the shareholders on June 30, 2005, minutes No. 23); On September 04, 2006 under state registration number 2067756557010 (amendments to the Articles of Association of the Company approved by the resolution of the general meeting of shareholders on June 29, 2006, minutes No. 26) On August 07, 2008 under state registration number 2087758956305 (amendments to the Company’s Articles of Association approved by the resolution of the general meeting of shareholders on June 27, 2008, minutes No. 32) On December 03, 2009 under state registration number 7097748794906 (amendments to the Company’s Articles of Association approved by the resolution of the general meeting of shareholders on June 29, 2009, minutes No. 36) Information on the share capital as on 01.01.2010:the Company’s share capital amounts to 4 754 238 rubles divided into 4 754 238 000 ordinary registered book-entry shares with par value of 0,001 rubles(the issue state registration number is 1-01-00221-A dd. 17.06.2003) Holder of the register: OAO Registrator R.O.S.T., license No. 10-000-1-0026 issued by the Russian Federal Securities Commission on December 3, 2002. Auditor of the Company: Closed Joint Stock Company PricewaterhouseCoopers Audit has a State Registration Certificate of a joint-stock company # 008.890 issued by the Moscow Registration Chamber on February 28, 1992, certificate on entering the Unified State Register # 1027700148431 issued by the Ministry of Taxation Inspection Board of the Russian Federation # 39 on August 22, 2002, and the license for auditing # E000376 issued by the Ministry of Finance of the Russian Federation on May 20, 2002. Information on the Company is published in the newspapers Izvestiya, Sovetskaya Belorussiya and at the site of the Company: www.slavneft.ru. SHARE CAPITAL As on 01.01.2010 the Company has 3 675 shareholders. SHARE CAPITAL STRUCTURE Shareholders Number of Number of shares, Share in the shareholders items Share Capital, % 1. Russian Residents: 3538 4753980989 99,9946 1.1. Entities. 15 4750126540 99,9135 Including the entities which share in the 3 4707603409 99,0191 Share Capital is not less than 1%. 1.2. Individuals. 3523 3854449 0,0811 2. Persons not resident at the Russian 129 250811 0,0053 Federation: 2.1. Entities. 3 100021 0,0021 2.2. Individuals. 126 150790 0,0032 3. The individuals the data on 8 6200 0,0001 jurisdiction whereon is not available there in the register Total: 3675 4754238000 100,0000 The Company did not purchase its own shares during the reporting period. 4 Nominees of OAO NGK