Operations and Crude oil deliveries

Total crude oil deliveries by the Company in 2009 reached 55.4 million tones, which corresponds to the level of 2008. Due to increase in and growth of oil export tariffs in Russia, VANKORNEFT, maximized profits by prompt redirection of crude oil volumes from less efficient exports to the domestic market, primarily to its own and inside Russia. The Company sold 3.12 million tons of crude oil in Russia during the year, which is 39% more than in 2008. Refining at the Company's own refineries inside Russia reached 26.16 million tones, which is 9.7% more than in 2008. In order to take advantage of favorable conditions on the domestic market the Company delivered 3.19 million tons of crude oil for processing in to Russia. In the accounting year 248,000 tons of crude oil was purchased in Russia, compared with 47,000 tons in 2008. The increase in purchases of crude oil is explained by growth of refinery throughputs in a context of lower crude oil production by the Company in Russia.

Crude oil exports from Russia by VANKORNEFT subsidiaries (including oil purchased from other producers) declined by 8.5% in comparison with 2008, to 39.30 million tones, owing to redirection of a part of export oil to the domestic market. The Company exported 31.20 million tones to the far-abroad countries and 8.10 million tones to the near-abroad countries. The Company managed its export deliveries efficiently in 2008, selecting the most profitable routes. The main routes for export of crude oil remained the ports of Primorsk and Novorossiysk, which accounted for 48% of total exports. A further 10% of exports were made by pipeline deliveries to Europe. In addition 41.35 million tons of crude oil was sold on the international market, including 5.27 million tones to countries of the near-abroad and 33.12 million tones to countries of the far-abroad.

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