OJSC Rosneft (Rosneft or “the Company”) today, June 18, reported its consolidated financial results in accordance with US GAAP for the three months ending March 31, 2007.

Financial review

* Adjusted for the effect of non-operating accrual of fines and penalties related to pre-acquisition Yuganskneftegaz tax debt

In the first quarter of 2007, Rosneft's total revenues increased by 12.2% year-to-date and by 0.1% quarter-on-quarter. Total revenues were USD 8,220 million, up from USD 7,327 million in the first quarter of 2006 and from USD 8,213 million in the fourth quarter of 2006. The increase in revenue is primarily due to increased sales volumes of crude oil, natural and associated gas and refined products.

EBITDA, adjusted for the effect of accrual of fines and penalties related to pre-acquisition Yuganskneftegaz tax debt in the amount of USD 297 mln, decreased by 9.3% year-to-date but increased by 97.8% quarter-on-quarter to USD 1,741 million, which is down from USD 1,920 million in the first quarter of 2006 but up from USD 880 million in the fourth quarter of 2006. Net income, adjusted by USD 332 million for the effect of accrual of fines and penalties related to pre-acquisition Yuganskneftegaz tax debt in the amount of USD 332 million as well as resulting change in effective tax rate, over the first three months of 2007 decreased by 24.9% year-to-date and by 0.2% quarter-on-quarter to USD 602 million, down from USD 802 million in the first quarter of 2006 and from USD 603 million in the fourth quarter of 2006.

The decrease in both EBITDA and net income in the first quarter of 2007 over the same period in 2006 was largely due to an increase in export duties of 23.8% and real ruble appreciation of 11.7%.

Despite continuing real ruble appreciation versus the US dollar in the first quarter of 2007, Rosneft successfully kept operating costs to a minimum. Operating expenses were down 26% quarter-on-quarter while general and administrative expenses were down 7% quarter-on-quarter.

Net cash provided by operating activities in the first quarter of 2007 was also substantially stronger quarter on quarter at USD 894 million compared to USD (967) million in the fourth quarter of 2006. Capital expenditures decreased by 22.4% quarter-on-quarter to USD 1,033 million. This is up from USD 590 million in the first quarter of 2006 and down from USD 1,331 million in the fourth quarter of 2006. The growth year-to-date was primarily due to further field development at Yuganskneftegaz, where capital expenditures grew by 44.2% to USD 457 million, and the commencement of full-scale development at the Vankor field, where investments in the first quarter of 2007 totaled USD 276 million (versus USD 1 million in the first quarter of 2006). The quarter-on-quarter decrease in capital expenditures was due to seasonal factors.

In the first quarter of 2007, Rosneft made further improvements to its track record of industry-leading crude oil production growth, substantially outpacing most of its peers both in Russia and globally. Rosneft and its consolidated subsidiaries increased crude oil production by 8.7% to 147.9 million barrels (up from 136.1 million barrels in the first quarter of 2006). This growth was largely due to increased production at Yuganskneftegaz and to increased output at the Sakhalin-1 project, where Rosneft holds a 20% stake. Yuganskneftegaz increased its production by 8.1% in the first quarter of 2007 to 103.99 million barrels, up from 96.21 million barrels in the first quarter of 2006.

Crude oil production, including equity share in affiliates, increased by 12.5% to 154.38 million barrels (up from 137.24 million barrels in the first quarter of 2006) with growth primarily due to the acquisition of an effective stake of 49.4% in Udmurtneft.

Daily crude oil production of Rosneft and its consolidated subsidiaries in the first quarter of 2007 was 1,643.36 thousand barrels as compared with 1,512.34 thousand barrels in the first quarter of 2006. Among the factors contributing to this increase was a growth in average well flow rates, which increased from 107.24 barrels per day in the first quarter of 2006 to 109.73 barrels per day in the first quarter of 2007. The increase in well flow rates was particularly noticeable at newly drilled wells, whose rates increased from 705.82 barrels per day to 806 barrels per day.

Rosneft's production of natural and associated gas increased by 13% in the first quarter of 2007 to 3.98 billion cubic meters (bcm), which was primarily due to production growth at Krasnodarneftegaz and Purneftegaz. Including share in affiliates, production increased by 13.3% to 3.99 bcm. The level of associated gas utilization was 64.2% in the first quarter of 2007 compared to 61.9% in the first quarter of 2006. Prices realized for gas sold increased from USD 20.92 in the first quarter of 2006 to USD 30.84 per thousand cubic meters in the first quarter of 2007.

In the first quarter 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 15% to 6.6 million tonnes, up from 5.74 million tonnes in the first quarter of 2006. Rosneft's proprietary refineries increased their output by 11.1% to 3 million tonnes, up from 2.7 million tonnes in the first quarter of 2006.

On March 27, 2007, RN-Razvitiye, a wholly-owned subsidiary of Rosneft, won a tender for the acquisition from YUKOS of 9.44% of the Company's share capital, as well as Yuganskneftegaz promissory notes with a face value of RUB 3,558 billion (USD 136 million at the CBR exchange rate in effect as of the date of the auction) for a total consideration of RUB 197.84 billion (USD 7.59 billion at the CBR exchange rate in effect as at the date of the auction). Title to the shares and promissory notes was transferred to RN-Razvitiye LLC on April 17, 2007.

Rosneft's US GAAP financial statements and management discussion and analysis (MD&A) for the first three months of 2007 and previous periods are available for download on the Company's website at www.rosneft.com.

OJSC Rosneft Information Division
Tel.: +7 (495) 221 3107
Fax: +7 (495) 411 5421
n_manvelov@rosneft.ru
June 18, 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.