OJSC Rosneft (Rosneft or „the Company“) today reported its consolidated financial results in accordance with US GAAP for the three and six months ending June 30, 2007. Rosneft achieved new record levels of profitability and operating performance in the second quarter, both on an organic (i. e. without the effect of acquisitions) and inorganic basis. Production growth for the quarter reached 6.1% on an organic basis and 24.7% including the effect of acquisitions. Revenues and EBITDA rose in the second quarter of 2007 approximately 18.7% and 38.5% respectively excluding the effects of 2007 acquisitions and 25.4% and 54.8% on an unadjusted basis.

Summary financial results (further details of which can be found at www.rosneft.com) for the three and six months ended June 30, 2007 include the following:

* Adjusted for the effect of non-operating accrual of fines and penalties related to pre-acquisition Yuganskneftegaz tax debt
** Adjusted for the effect of non-operating accrual of fines and penalties related to pre-acquisition Yuganskneftegaz tax debt, income from consolidation of Yukos-Mamontovo as well the effect of proceeds from the Yukos bankruptcy

In the second quarter of 2007, EBITDA, adjusted for the effect of accrual of fines and penalties related to pre-acquisition Yuganskneftegaz tax debt in the amount of USD 45 million and USD 31 million in the second quarter of 2007 and 2006, respectively, increased by 54.8% year-on-year and by 105.7% quarter-on-quarter. Adjusted EBITDA increased to USD 3,581 million from USD 2,314 million in the second quarter of 2006 and from USD 1,741 million in the first quarter of 2007. Similarly, in the first half of 2007, EBITDA, adjusted for the effect of accrual of fines and penalties related to pre-acquisition Yuganskneftegaz tax debt in the amount of USD 342 million and USD 62 million in the first six months of 2007 and 2006, respectively, increased by 24.8% to USD 5,322 million from USD 4,265 million for the same period in 2006.

In the second quarter of 2007, net income, adjusted for the effect of non-operating accrual of fines and penalties related to pre-acquisition Yuganskneftegaz tax debt in the amount of USD 67 million and USD 31 million in the second quarter of 2007 and 2006, respectively, income from consolidation of Yukos-Mamontovo in the second quarter of 2007 in the amount of USD 46 million, as well the effect of proceeds from the Yukos bankruptcy, increased by 49.5% year-on-year and by 140.2% quarter-on-quarter. Adjusted net income increased to USD 1,657 million from USD 1,108 million in the second quarter of 2006 and USD 690 million in the first quarter of 2007. In the first half of 2007, net income, adjusted for the effect of non-operating accrual of fines and penalties related to pre-acquisition Yuganskneftegaz tax debt proceeds in the amount of USD 399 million and USD 62 million in the first half of 2007 and 2006, respectively, income from consolidation of Yukos-Mamontovo as well the effect of receipt of the Yukos bankruptcy receivables, increased by 20.9% to USD 2,347 million from USD 1,941 million in the first half of 2006.

In the second quarter of 2007, Rosneft made substantial improvements in cash flow generation. Free cash flow (operating cash flow adjusted for capital expenditures and license acquisitions) for the second quarter of 2007 almost tripled to USD 1,123 million from USD 391 million for the same period in 2006. As result, free cash flow in the first half of 2007 increased by 2.9% to USD 984 million compared to USD 956 for the same period of 2006. Capital expenditures increased by 63.1% to USD 2,288 million in the first half 2007 compared to USD 1,403 million in the first six months of 2006. The growth was primarily due to further field development at Yuganskneftegaz, where capital expenditures grew by 51.8% to USD 1,050 million, and the commencement of full-scale development at the Vankor field, where investments in the first half of 2007 totaled USD 590 million, an increase of 129.3% versus USD 257 million in the first half of 2006.

The improved financial performance in the second quarter of 2007 over the same period in 2006 was largely due to strong improvements in organic performance, specifically accelerated production growth rates and improved domestic product sales, the new level of vertical integration at the Company following the acquisition of five new refineries in May 2007 and the purchase of new upstream assets.

Tomskneft, as well as the Achinsk and Angarsk refineries were fully consolidated in Rosneft’s financial statements starting from May 8, 2007, while Samaraneftegaz and the Samara group of refineries were consolidated starting from May 15, 2007.

In the second quarter of 2007, Rosneft further extended its track record of industry-leading crude oil production growth. Rosneft and its consolidated subsidiaries increased production of crude oil by 21.1% to 171.35 million barrels in the second quarter of 2007 from 141.52 million barrels in the second quarter of 2006. This growth was largely due to an increase in production at Yuganskneftegaz to 106.46 million barrels in the second quarter of 2007 from 100.26 million barrels in the second quarter of 2006, or by 6.2%, as well as the acquisition of Tomskneft and Samaraneftegaz, which collectively contributed 21.26 million barrels to Rosneft’s crude oil production from the day of their acquisition in May 2007 to June 30, 2007. As a result, in the first six months of 2007, Rosneft and its consolidated subsidiaries increased crude oil production by 15% to 319.27 million barrels (up from 277.63 million barrels in the first half of 2006) while crude oil production, including equity share in affiliates, increased by 18.7% to 332.33 million barrels (up from 279.96 million barrels in the first half of 2006). Organic crude oil production increased in the first half of 2007 by 7.3% from 277.63 million barrels in the first half of 2006 to 298.01 million barrels. Among the factors contributing to this increase was a growth in average well flow rates, which increased from 107.16 barrels per day in the first half of 2006 to 109.58 barrels per day in the first half of 2007, including higher flow rates at new wells (723.17 barrels per day in the first half of 2006 vs 736.62 barrels per day in the first half of 2007).

In the second quarter of 2007, Rosneft and its consolidated subsidiaries produced 3.73 billion cubic meters (bcm) of natural and associated gas, an increase of 17.2% compared to the same period of 2006. In the first half of 2007 Rosneft’s production of natural and associated gas increased by 14.9% to 7.71 bcm from 6.71 bcm in the same period last year. The growth was primarily due to increased production at Krasnodarneftegaz and Purneftegaz. Including share in affiliates, gas production increased by 15.0% to 7.73 bcm in the first half of 2007.

In the first half of 2007, the total output of petroleum products from Rosneft produced crude oil, including output at mini refineries and refineries controlled by third parties, increased by 28.4% to 14.39 million tonnes, up from 11.21 million tonnes in the first half of 2006. In the second quarter petroleum products ouput increased by 18% quarter-on-quarter to 7.79 million tonnes from 6.6 million tonnes in the first quarter of 2007.

Sergey Bogdanchikov, president of Rosneft, said: „The results of the second quarter of 2007 demonstrate strong organic performance both through industry-leading production growth and increased profitability. These financial results include the recently acquired assets for approximately half the second quarter and further improvements in profitability will be realized as we continue to integrate and optimize our portfolio. We will continue to work to demonstrate leading financial performance and earnings growth among Russian oil majors.“

Rosneft’s US GAAP financial statements and management discussion and analysis (MD&A) for the three and six months ending June 30, 2007 and previous periods will be made available for download on the Company’s website at www.rosneft.com.

OJSC Rosneft Information Division
Tel.: +7 (495) 221-31-07
Fax: +7 (495) 411-54-21
n_manvelov@rosneft.ru
October 16, 2007

These materials contain statements about future events and expectations that are forward-looking in nature. Any statement in these materials that is not a statement of historical fact is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements expressed or implied by such forward-looking statements to differ. We assume no obligations to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements.