Moscow, March 17, 2005.  Sibneft has produced over one million tons (7.4 million barrels) of crude oil from the Krapivinskoye field in Siberia’s Omsk region since bringing the field on-stream nearly three years ago.  Daily production at the site has now reached 2,600 tons (19,334 barrels) and is expected to reach 3,000 tons per day (22,308 b.p.d.) by the end of this year.

Sibneft won an open tender for rights to develop the Krapivinskoye field in 2000 and pumped its first commercial oil at the site in May 2001.  In November 2002, the company opened a pipeline it built to connect the field to the main Transneft pipeline network.  The link allows Sibneft to ship up to 5000 tons (37,180 barrels) of crude oil per day directly to the Omsk Refinery.

As it developed the field, Sibneft also carried out additional geological research, resulting in an increase in recoverable hydrocarbon reserves from five million tons to 12 million tons.  To date, the company has invested more than four billion rubles in the project.

Taxes and other payments made by Sibneft account for over 30% of the municipal budget of Omsk region’s historic Tara district, where Krapivinskoye is located.  The company is also investing heavily in local transportation infrastructure and in a variety of social programs.

“The Krapivinskoye project is a fine example of how Sibneft can earn good financial returns while demonstrating its commitment to the local community and the environment,” said Sibneft president Eugene Shvidler.  “The development of smaller fields like this one will increasingly contribute to the overall growth of the company.”

Contact:

John Mann

Sibneft

Tel:  +7 (095) 777-3116, 777-3182

Fax: +7 (095) 777-3114

JohnM@sibneft.ru

www.sibneft.com