Bashneft has released its preliminary operating results for the first quarterof 2016.

• Average daily oil production grew by 11% year on year to 58.1 thousand tonnes.
• Production at brownfields added 2.2%.
• New assets in Timan-Pechora and Western Siberia accounted for 20.4% of oil production.
• Refining increased by 0.4% to 4,732 thousand tonnes.
• Gasoline production gained 6.7% and reached 1,293 thousand tonnes.
• The share of light products increased to 68.9%, while refining depth reached 86.2%.
• 100% of motor gasoline and diesel fuel meet the Euro 5 standard.

In the first quarter of 2016, the Company produced 5,286 thousand tonnes of oil, which is 12.3% more than in the first quarter of 2015. In the first quarter of 2016, average daily production reached 58.1 thousand tonnes per day. Production growth was driven mainly by Bashneft-Polyus and Burneftegaz, which accounted for 20.4% of total oil production as against 12.6% in the first quarter of 2015.

Thus, in the first quarter of 2016, Bashneft-Polyus increased production by 68.1% year on year (to 511 thousand tonnes), while Burneftegaz boosted production by 96.4% (to 569 thousand tonnes). Production growth was driven by efficient implementation of the production drilling programme involving drilling highly productive horizontal wells, as well as by development of infrastructure for crude oil treatment and transportation in accordance with development plans.

Year-on-year production growth was also supported by a 2.2% increase in oil production at brownfields, mainly due to commissioning of new wells and highly efficient geological and engineering operations in Bashkortostan, where production growth in the first quarter of 2016 amounted to 2.7%.

In the first quarter of 2016, Bashneft’s refining complex processed 4,732 thousand tonnes of crude oil, which is 0.4% more than in the same period in 2015. The output of commercial products totalled 4,379 thousand tonnes, which is comparable to the level reached in the first quarter of 2015. At the same time, the Company continued to improve its product mix. For instance, gasoline production increased by 6.7% year on year to 1,293 thousand tonnes; the output of fuel oil decreased by 10.9% to 630 thousand tonnes, while production of vacuum gas oil was discontinued. As a result, in the first quarter of 2016, average refining depth increased to 86.2% as against 83.7% in the first quarter of 2015, while the share of light products grew to 68.9%.

In recent years, Bashneft has completed a number of refinery upgrade projects aimed at ensuring compliance with the requirements set out in the Technical Regulations; this enables the Company to produce light petroleum products meeting the highest quality standards. Thus, in the first quarter of 2016, 100% of motor gasoline (1,118 thousand tonnes) and diesel fuel (1,871 thousand tonnes) produced by Bashneft met the Euro 5 standard.

PRELIMINARY OPERATING RESULTS FOR THE FIRST QUARTER OF 2016

OIL PRODUCTION BY OIL AND GAS PROVINCE

*- LLC Bashneft-Dobycha
**- LLC Bashneft-Polyus
***- LLC Burneftegaz and LLC Bashneft-Dobycha