TNK-BP Information Sheet

TNK-BPInformation Sheet

JUNE 2007

3

Contents

01. Who we are02. Strategy03. Upstream and technology04. Downstream05. Gas06. People07. Health, safety and environment08. Finance 09. Major projects10. Community contribution 11. Fast facts

CONTENTSTNK-BP INFORMATION SHEET

4

Who we are

WHO WE ARETNK-BP INFORMATION SHEET

5WHO WE ARETNK-BP INFORMATION SHEET

Ownership structureThe TNK-BP group has been operating since September 1, 2003. It was •formed by Alfa, Access/Renova (AAR) and BP as a 50/50 joint venture combining AAR and BP oil and gas assets in Russia and Ukraine.

TNK-BP shareholders also own close to 50% equity interest in Slavneft, •which is separately managed. For more details on Slavneft please see page 8 of this booklet.

TNK-BP is vertically integrated, privately held and unlisted, although TNK-BP •Holding (referred to below) is quoted on the Russian stock exchange.

TNK-BP Limited (British Virgin Islands) incorporates the assets and business •activities of TNK-BP Holding, all other TNK-BP interests in Russia and abroad, including principally the company’s downstream business in Ukraine.

TNK-BP’s main Russian assets, including all crude oil production and oil •reserves, are held by TNK-BP Holding, an onshore Russian company created as a key element of TNK-BP’s major corporate restructuring.

TNK-BP is currently Russia’s third largest company in terms of liquids produc-•tion. At the end of 2006 TNK-BP accounted for approximately 18% of Russia’s total oil production (including its 50% equity share of Slavneft production).

We are 71,000 people working across Russia and Ukraine.•

6 WHO WE ARETNK-BP INFORMATION SHEET

Corporate structure

50%

95%

50%

50%

63%

75%

100%

100%

68%

100%

Samotlorneftegaz

TNK-Nizhnevartovsk

Orenburgneft

TNK-Nyagan

NNP

Varyeganneftegaz

Tyumenneftegaz

Corporation Yugranef

tNovosibirskneftegaz

ROSPAN International

Orenburggeologia

JV Vanyegannef

t

Ryazan Refinery

Saratov Refinery

NNPO

Krasnoleninsk NPZ

TNK-Stolitsa

Kurskoblnefteproduct

Zapsibnefteproduct

Karelianefteproduct

Ryazannefteproduct

Kaluganefteproduct

Tulanefteproduct

Rostovnefteproduct

Saratovnefteproduct

TNK-BPLtd(BVI)

TNK Industrial Holdings Ltd(BVI)

STBP HoldingsLtd.

RUSIA Petroleum

TNK-BPHolding*

Slavneft

TNK-BP Finance S.A. (Luxembourg)

LisichanskRefinery(Ukraine)

Alfa,Access/Renova BP

TNK-BPInternationalLtd(BVI)

Upstream Refining Marketing

Businesses consolidated into TNK-BPInternational`s US GAAP financial statements

Businesses which are not consolidated into TNK-BP International`sUS GAAP financial statements, but are consolidated into TNK-BPLimited`s US GAAP financial statements

Businesses accounted for as equity investments

*As a result of accessions of TNK, SIDANCO and ONAKO to TNK-BP Holding and completion of the voluntary share exchange program, minority shareholders hold about 5% of TNK-BP Holding shares.

**Whilst a “Heads of Terms” has been agreed to sell TNK-BP’s interest in RUSIA Petroleum to Gazprom, completion of this transaction is due around October 2007. Until then RUSIA Petroleum remains part of the TNK-BP group.

**


TNK-BP HoldingIn 2004, a major corporate restructuring was commenced to simplify TNK-BP •complex legacy structure (more than 600 legal entities) and improve transpar-ency and corporate governance.

In 2005, TNK-BP completed two critical steps in its corporate restructuring: •

Heritage holding companies TNK, SIDANCO, and ONAKO merged •into TNK-BP Holding (TBH).

Approximately 70% (by value) of minority shareholders in 14 key TNK-BP •subsidiaries exchanged their shares for shares in TNK-BP Holding through the voluntary share exchange program.

Consequently minority shareholders now own approximately 5% of TNK-BP •Holding.

As a result of restructuring, we have rationalized our onshore and offshore •structure and reduced the number of legal entities by approximately 200.


SlavneftTNK-BP holds 49.8% interest in Slavneft through TNK-BP International. •Slavneft operates as a separate entity; TNK-BP and Gazprom Neft have equal representation on the Slavneft Board of Directors. According to an agree-ment between Gazprom and TNK-BP, the parties market Slavneft’s crude and refined products on an equal basis. TNK-BP receives 50% of Slavneft crude oil; approximately half of this volume is then exported. The remaining 50% is processed at Slavneft’s Yaroslavl Refinery and refined products are exported or sold domestically.

TNK-BP receives its share of Slavneft dividends: $399 million in 2004, •$657 million in 2005, and $252 million in 2006*.

Slavneft’sgrossresults2004-2006

*Decrease in Slavneft’s net income and dividends in 2006 versus 2005 reflects the transfer of trading volumes and earnings to the shareholders following the agreement between Gazprom and TNK-BP referred to above.

2004 2005 2006

Oil production, million barrels per day 443 488 472

change vs. similar period of previous year, % 22% 10% -4%

Gross revenues, US GAAP consolidated, $ million 6,124 7,532 6,584

Net income, US GAAP consolidated, $ million 1,212 1,237 705*


Physical structureThe main oil production assets of TNK-BP are located in West Siberia •and the Volga-Urals region; with new provinces being opened in East Siberia via the planned development of the Verknechonskoye oil field (concurrently with the construction of the Transneft operated East Siberia Oil Pipeline) and in the south of Tyumen region as we develop the Uvat group of fields.

The main gas business assets are our significant associated and free gas •production from our oil operations, the Rospan project in Novy Urengoi, which is 100% owned by TNK-BP, and the gaz processing joint venture we have with SIBUR Holding in Nizhnevartovsk.

TNK-BP holds approximately 213 exploration and production licenses.•

TNK-BP’s top 10 fields deliver two thirds of its production. Top 20 fields hold •80% of proved reserves.

Mature field upstream base yields average water cut of over 90%.•

Average well productivity is 15 tons per day.•

Approximately 28,000 km of infield gathering pipelines.•

TNK-BP has four refineries located in the central part of Russia •and one refinery in Ukraine, close to production areas and export routes.

In addition, the company operates approximately 1,600 retail outlets branded •either as BP or TNK in Russia and Ukraine.


Mapofassets

12

Strategy

STRATEGYTNK-BP INFORMATION SHEET

13STRATEGYTNK-BP INFORMATION SHEET

The strategy is unchanged since the founding of TNK-BP in 2003 and remains robust. It is fundamentally targeted at growing the value of the company, and there are four key focus areas:

Resourcestoreservestoproduction(R/Pmanagement):• deployment of adequate and innovative capital, international best-practice field level technol-ogy and advanced computer modeling techniques to deliver continual reserves replacement.

Marginenhancement:• targeted midstream and downstream investments to improve logistics costs, expansion of the company-owned retail network to capture a greater share of the value chain and selective investment in refining to further enhance and create new high quality products.

Gas:• transformation from an oil group to a major oil and gas group through monetization of our large associated gas opportunity set (including new construction of dedicated electric power assets) and development of TNK-BP’s large gas resource base.

Corporategovernance:• corporate restructuring to simplify and improve transparency, US and International GAAP or IFRS consolidated reporting and implementation of international best business practices to further enhance corporate responsibility and performance delivery.

Two essential enabling mechanisms are specifically targeted to enhance overall strategy delivery and further develop the TNK-BP contribution to the Russian oil and gas industry:

Portfoliomanagement:• divest non-strategic assets where others see and can access greater value in ownership than TNK-BP (thereby enabling higher activity and investment levels), acquire and develop assets where TNK-BP can create and access new value and apply distinct skills and capabilities to sup-port growing the company over the medium- to long-term.

Organizationalcapabilitydevelopment:• develop the knowledge, skills and abilities of employees to match the long-term needs of the business; greenfield oil, brownfield oil, new gas as well as the production, distribution and marketing of high-quality refined products.

14 STRATEGYTNK-BP INFORMATION SHEET

The strategy in actionResourcestoreservestoproduction:• total production has grown by 26% since the start of operations (adjusted for disposal of Saratovneftegaz and Udmurtneft). An average of 130% of annual production replaced with new externally audited reserves over each of the past three years. Average exploration drilling success rate since 2003 is 65%.

Marginenhancement:• TNK-BP completed a major upgrade project at Ryazan refinery in autumn 2006, enabling production of high quality de-sulphurised fuel products to meet Euro-4 standards. Increased refining capacity (34 million tons up 15% on 2003) and availability (92%). TNK-BP also supported a comparable modernization of the Yaroslavl refinery operated by Slavneft (TNK-BP ownership approximately 50%). New retail filling station sites under development in St. Petersburg, Moscow and Rostov; TNK retail stations re-imaging/site modern-ization campaign (68 retail sites re-imaged in 2006); launch of BP Ultimate fuel sales in Moscow on 15 September 2006 and modernization and construction of new crude and product rail loading terminals.

Gas:• pursuing new associated gas opportunities and growing gas production in West Siberia; continuing to develop East Siberia gas potential*.

Corporategovernance:• successful corporate restructuring – TNK, ONAKO and SIDANCO now acceded to TNK-BP Holding and voluntary share exchange program complete. First TBH Annual General Meeting of Shareholders was held on 28 June 2006. Extraordinary General Meeting of Shareholders held on 15 November 2006; second AGM held on 15 June 2007 (refer to Finance section below). TNK-BP is the only Russian oil company to become a signatory to the World Economic Forum’s Principles Against Corruption Initiative and to incorporate its guidelines into daily business operations.

*Subject to the “Heads of Terms” referred to on page 6.

15STRATEGYTNK-BP INFORMATION SHEET

Recent enabling actions in support of the strategy include:

Portfoliomanagement:• sale of Saratovneftegaz and Orsk refinery in late 2005; sale of Udmurtneft (115 thousand barrels per day) to Sinopec in 2006. Acquisition of 50% share in JV Vanyoganneft in West Siberia, bringing TNK-BP ownership to 100% and the acquisition of more than 50 new exploration and exploration and production licenses via the Russian Federation subsoil use license auction program since end 2004.

Organizationalcapabilitydevelopment:• individual employees are receiving plans for both performance and future development as well as new training to build new skills. Staff Development Networks in place in all critical disciplines. Personnel with international experience help transfer skills and technology to local staff. TNK-BP is building links with leading universities and technical institutions, designed to develop local technical excellence, including but not limited to direct financial support of the new Moscow School of Management (Skolkovo business school), the creation of a new Masters course in Geosci-ence in Tyumen, and the introduction of the TNK-BP University grants program.

UPSTREAM AND TECHNOLOGYTNK-BP INFORMATION SHEET 16

Upstream and technology

17UPSTREAM AND TECHNOLOGYTNK-BP INFORMATION SHEET

Exploration and appraisalTNK-BP’s exploration strategy supports its growth aspirations through:•

A balanced approach to brownfield (short-term production options and field •extensions/satellites in Orenburg and West Siberia) and greenfield (new material development hubs like the West Siberia Uvat and Bolshekhetskiy projects) exploration and appraisal activity.

Access to future growth opportunities in new licenses in existing areas •and frontier bluefield opportunities – we accessed our first such opportunity in Astrakhan on the Volga Delta in 2006.

Since 2003 TNK-BP has substantially grown its exploration portfolio from ap-•proximately 1.5 billion barrels to over 5 billion barrels in 2007 (including discov-ered resources and yet-to-find resources in unexplored acreage but excluding gas).

Portfolio growth has been achieved through:•

New license access – 35 licenses acquired in 2006; since the start of 2007 •TNK-BP has won five licenses at auctions and acquired 12 exploration licenses through purchase of third-party companies.

• Exploration and appraisal activity – over 140 wells and approximately 10,000 square km of exploration 3D seismic and nearly 20,000 km of 2D seismic since 2003.

Implementation of improved exploration standards and techniques in geo-•logical and resource estimations based on seismic models.

Our drilling success rate has averaged 65% between 2003 and 2006. Our •2007 success rate up to May has been over 60%.

Total exploration and appraisal spend has increased five fold since 2003 and •will exceed $300 million in 2007.

In 2007 we have made further discoveries in the Uvat Region and significant •satellite discoveries in the Sorochinsko-Nikolskoe and Ananevskoe fields in Orenburg and Ust-Vakh field adjacent to Samotlor in West Siberia.

In 2007 we expect to produce over 100,000 tons from successful exploration •wells and follow-up development activity (for instance, recompletions and new side tracks in existing well stock close to successful E&A wells).

18 UPSTREAM AND TECHNOLOGYTNK-BP INFORMATION SHEET

ReservesIndependent audit conducted by DeGolyer and MacNaughton confirmed TNK-•BP’s total proved reserves as of 31 December 2006:

7.810 billion barrels of oil equivalent on an SEC life-of-field (LOF) basis, or•

8.949 billion barrels of oil equivalent on an SPE basis.• TNK-BPprovedreserves,billionbarrelsofoilequivalent

Note: numbers are based on reserve audit reports as of December 31, 2006 and 2005 prepared by DeGolyer and MacNaughton excluding Slavneft. Numbers for 2006 include proved developed gas reserves.

*TNK-BP manages its reserves on an SEC “life-of-field” (LOF) basis. SEC LOF methodology extends reserves through the economic life of fields (without license cut off).

TNK-BPexplorationandappraisal:costsandsuccessrates

2005 2006

Category SPE SEC LOF* SPE SEC LOF*

Developed 6.11 6.11 5.63 5.63

Undeveloped 3.12 2.12 3.32 2.18

Proved Total 9.23 8.23 8.95 7.81

Reserves / Production ratio 16 14 16 14

2003Est. 2004 2005 2006

Num

ber

of w

ells

com

plet

ed in

a y

ear

Total E&

A spend ($ m

ln) Opex and C

apex

0

10

20

30

40

50

0

50

100

150

200

50

7

4

12

16

9

22

10

2464%

57%71%

71%

%Well successes Well failures E&A spend $ mln Success rate


As of 31 December 2006, TNK-BP has booked 306 million barrels of oil equiva-•lent of proved developed gas reserves and as a result has moved to report its proved reserves on a barrel of oil equivalent basis starting from year end 2006. Prior to 2006, TNK-BP did not record any of its gas assets as proved reserves.

The figures represent a total proved reserves replacement ratio of 129% •on a SEC life of field basis; 156% on a SPE basis. Figures are adjusted for divestments during 2006.

In 2006, TNK-BP produced 620 million barrels of oil equivalent and added 861 •million barrels of new proved reserves through brownfield optimization and exploration success.

80% of proved reserves are in 20 fields.•

Next reserves audit will confirm reserves at 31 December 2007. Results will be •published during 1Q 2008.

2007 plan requires at least 100% reserves replacement for fifth year in succes-•sion.

In addition, in 2006 TNK-BP added more than 400 million barrels of non-proved •oil reserves through exploration and appraisal activity.


ProductionIn 2006 our average production rate was:•

1.5 million barrels of oil and condensate per day;•

1.7 million barrels of oil equivalent per day.•

In 2006 oil and gas production grew by approximately 3% to 620 million •barrels of oil equivalent.

TNK-BP share of Slavneft production in 2006 was approximately 200 thousand •barrels of oil and condensate per day.

In 1Q 2007, TNK-BP produced 17.4 million tons of oil and condensate •(approximately 1.45 million barrels per day).

TNK-BP production growth for the next three years is expected to be generally •flat, rising from 2009 after new projects come on line.

In 2007 TNK-BP plans to drill more than 540 new wells and will perform 12,000 •current workovers on producing wells.

TNK-BPproduction2003-2007

2003 2004 2005 2006

mln

boe

/d

0.0

0.5

1.0

1.5

2.0

2.5

2007e*

Disposals

*TNK-BP projection for 2007

% id

le w

ell s

tock

Num

ber of operation, investment, m

ln $0%

7%

14%

21%

28%

35%

42%

0

1000

2000

3000

4000

5000

6000

Number of wells removed from idle well stock Spending, mln $ idle well stock (planned)

15561769

19522399 2224 2279

21101904

170 267 391 611 436 447 412 374

41% 39.3% 37%

30.9%

24.7%

19.5%15.9%

13.7%

2004 2005 2006 2007 2008 2009 2010 2011


Idle well reactivationTNK-BP operates 143 fields with the total stock of producing wells of 21,229. •In 2006, the idle wells stock was 8,362 (39% of the total number of develop-ment wells). 82% of idle wells are in eight key fields.

Since the company was formed, TNK-BP has already reactivated about 4,500 •idle wells. In 2007-2011, we will spend over $2.2 billion on the idle wells reduc-tion program, including $611 million in 2007.

By 2009, we plan to reduce the number of idle wells to 20% or less •and are on track to achieve this.

Workingwithidlewellstock

% id

le w

ell s

tock

Num

ber of operation, investment, m

ln $0%

7%

14%

21%

28%

35%

42%

0

1000

2000

3000

4000

5000

6000

Number of wells removed from idle well stock Spending, mln $ idle well stock (planned)

15561769

19522399 2224 2279

21101904

170 267 391 611 436 447 412 374

41% 39.3% 37%

30.9%

24.7%

19.5%15.9%

13.7%

2004 2005 2006 2007 2008 2009 2010 2011


Oilfield servicesOilfield services (OFS) continues its restructuring plans and operational •excellence initiatives to improve upstream competitiveness through quality and efficiency of services provided. We are retaining three core segments:

Drilling rig services;•

Sidetracking drilling; •

Capital and current well workover.•

OFS goals for core companies are leadership in HSE, cost and service quality.•

A Quality Management System has been implemented to ensure improvement •in quality of services delivered to Upstream. Quality Directors responsible for delivering this system have been placed in each service company.

In Q1, 2007 13,000 people were employed in OFS. All remaining non-core •companies (transport, repair bases, and automation) will be divested during 2007.

A comprehensive rig upgrade program is currently being executed for a cost •of about $650 million over six years. This will result in improved drilling perfor-mance, better safety and reduced drilling cycle times. We will add to our portfolio of rigs and execute major and minor upgrades to our existing fleet of 55 operating rigs. By the end of 2007, $200 million will have been invested in this program and 20 major rig upgrades completed.

OFS has initiated a Preventative Maintenance System for drilling operations •and launched a program to introduce best practices, which include second-ments and reverse secondments between TNK-BP and internationally recognized drilling and workover companies.

In Q3 2007 OFS will introduce a Training and Competency Passport to serve •as a repository for each employee’s training and certification records. The Passport reinforces a “one company” spirit, provides management with a tool to monitor training gaps, and recognizes individual achievements.

An acceleration bonus for drilling has been introduced for all drilling crews. Early •completion of wells entitles every member of the crew to an additional bonus. Such bonus is forfeited if early completion involves any HSE incident.


TechnologyTNK-BP continues to apply world best practices in technology across all its ac-tivities, from accessing new license areas, exploration and appraisal, production technology, to refining, marketing, and managing the company’s major projects.

Seismic technologyTNK-BP is the largest consumer of seismic services in Russia – we account for •around a third of the market in Russia and have an ambitious plan to cover our core assets with 3D seismic by the end of 2010.

Our annual volume of 3D seismic acquisition has increased ten fold since 2003 •and 2D programs are likely to double again in 2008 to meet license commit-ments associated with our successful new license access strategy.

TNK-BP works closely with some of the best contractors in Russia to improve •efficiency and data quality. We introduced the first foreign crew to West Siberia in 2006 and continue to revise our long-term contracting strategy to increase market competition and improve approval and permitting processes.

In 2006 TNK-BP reached international industrial standards in seismic acquisi-•tion:

density of 3D data acquired is over 90,000 traces per sq. km;•

modern acquisition systems are used – Sercel-408 and Sercel-428, •I/O System-4;

improved remote communications to enhance site and office quality control •– eSQC-Pro on-line seismic acquisition control is now widely used.

In 2007 TNK-BP will approach world-class standards of 100,000 traces •per sq. km.

2007 will see the introduction of further modern advanced technology:•

introduction of LiDAR – high precision laser mapping of sites prior to 3D •seismic acquisition;

low-impact seismic operations associated with further summer seismic •acquisition in West Siberia.


Since 2004, TNK-BP has been operating (with WesternGeco) a dedicated seis-•mic centre hosting one of Russia’s largest industrial use computers. The contract for the centre was recently renewed for a further three years.

Advanced depth and time seismic processing techniques are routinely used •to improve reservoir imaging in complex subsurface areas like Orenburg and Uvat.

TNK-BP is actively reviewing the use of multi-component (3D/3C) seismic •to improve data quality in areas impacted by shallow gas. A pilot project was acquired in 2005, processed in 2006 and is now being evaluated.

In key areas like Uvat, Rospan and Orenburg, multidisciplinary project teams •of geoscientists and engineers are working on integrating well and seismic data to understand complex reservoir systems and develop their ability to model reservoir quality and fluid presence from seismic data.

Interpretation teams regularly use the Visual Modeling Centre (VMC) which was •opened in the Moscow office in 2006. This advanced visualization centre allows teams to rapidly integrate data, review structural and stratigraphic models and optimize well locations.

Sixty percent of Russia’s territory lies in permafrost regions. Three quarters •of Russia’s oil and gas resources are deposited in the permafrost zone. TNK-BP together with Western Geco is working on a new seismic processing technology to interpret formations under Russia’s permafrost:

Non-homogeneous permafrost distorts wavelength travel time, making •it difficult to image subsurface formations.

New technology, combining prestack depth migration technology and tomo-•graphic inversion helps define the near-surface anomalous zones and apply corrections, providing a detailed, higher resolution interpretation.


Drilling technologyNew applications of technology in drilling include casing drilling, coiled-tubing drill-ing and radial drilling.

Casing drilling – technology that uses the casing string to drill ahead, •imparting rotation to a rotary shoe as opposed to a bit via the conventional drill string. TNK-BP will be the first company to pilot casing drilling in Russia. Ben-efits of casing drilling include: reduced drilling time, reduced rig requirements, increased well bore stability, improved well productivity and control, as well as improved personnel safety. This technology will be trialed in the Orenburg area and possibly at the Samotlor field.

Radial drilling process uses a flexible tube to jet radial holes into the formation •with high-pressure liquids. This allows us to penetrate 50-millimeter radial chan-nels of up to 100 meters into the oil zone (compared to conventional perforation of 0.5-1.2 meter length holes). Radial drilling is a low-cost method to produce bypassed pay near water by reaching beyond damage intervals of the wellbore, improving drainage areas and enhancing water injection. This technology has already been piloted in Orenburg with some encouraging results; more pilots are being organized for 10 to 15 wells in Samotlor and Orenburg for 2007 with a plan to see production gains between 50 and 100% from these activities.

Coiled tubing drilling – TNK-BP senior management has reviewed Alaskan CTD •operations and analyzed conventional CTD approaches and techniques as well as a new hybrid fixed pipe/CTD rig approach. The forward plan includes devel-opment of fixed pipe/CTD proposal for Kammenoye field in 4Q 2007.

Drilling rigs modernization program – TNK-BP operates a fleet of over 100 •drilling rigs. A $650 million program to upgrade the company’s drilling rigs is currently being implemented. Upgraded rigs will allow us to drill more complex wells in the future to access bypassed reserves. For details of the rig upgrade program please refer to Oilfield services section in this booklet.


Well work technologyTNK-BP well work has evolved during the past few yeas and activities include hy-draulic fracturing, down hole equipment optimizations, improvement of ESP (elec-tric submersible pump) run life, bottom-hole acid treatments and recompletions. Complexity of wellwork continues to increase with time and “extra” contribution declines over time as it becomes a part of base production.

Hydraulic fracturing technology incurred a step change in volume performance •during 2004 by completing over 1,500 jobs across TNK-BP and delivered more than 50 million barrels of cumulative oil volume. Candidate well selection, frac-turing design and quality control of fracturing equipment and service continue as important elements that influence well work success.

Successful pilots to optimize ESPs during 2003 and 2004 led to significant •work during 2005. More than 1,800 jobs across TNK-BP were completed during 2005 and delivered 2.9 million tons of oil, which was double the original delivery plan. Downhole optimization work focused on candidate selection and equipment design.

Improving ESPs run life to 600 days by 2011 from 324 days at year end 2006 •is a major project that involves coordination of activities across all TNK-BP streams. Significant improvement to Mean Time Between Failure has been made since July 2006 when run life was about 300 days. May 2007 was 343 days and is a direct result of using more reliable equipment and expanding a number of successful pilot programs. Specific technology projects that will af-fect run life are successful implementation of RIFTS (Reliability Information and Failure Tracking System) and GAMS (Group Analysis and Monitoring System). Technical specification changes by year end 2007 will help deliver 2008 and 2009 run life through better equipment reliability. TNK-BP partners with Russian universities and research institutes to further new technologies.

Treatment of formation pay zones with hydrochloric acid is termed Bottom-Hole •Treatment (BHT) technology. A second year of pilot testing has begun and the technology of diverted acid treatments has been introduced. Incremental gains are 19 tons per day versus 10 tons from conventional treatments. Well candi-date selection and treatment design are essential for developing customized treatments for each well. Samotlor BHTs were expanded to other company assets like Orenburg in an effort to scale up to 4,000 jobs per year and improve the technology deployed.


Reservoir managementReservoir management utilizes a number of techniques to maintain reservoir pressure and ensure maximum recovery, including waterflood optimizations, sidetracking and geosteering.

Optimizing waterflood systems – these pressure maintenance systems •are individually tailored to characteristics of each field. System elements include reconfiguration of waterflood patterns, conversions of existing producing wells to injector wells, and conducting infield drilling. Integrated waterflood management has resulted in field-scale waterflood response in several areas across TNK-BP, increasing recovery.

Injecting gas is another way of maintaining reservoir pressure at fields •with specific reservoir properties.

Sidetracking is an important technique used to improve reservoir access •by accessing bypassed reserves. It is a key production growth tool in our mature fields. Sidetracking allows us to increase recovery while utilizing the idle well stock.

Geosteering allows us to locate wells in unswept oil pockets, improving oil rates •by 50%. In 2006 more than 100 sidetracks were drilled and the number of sidetracks is anticipated to grow to more than 400 per year in the 2009/2010 period.

Ave

rang

e oi

l rat

e pe

r w

ell (

tons

/day

)

0

1 2 3 4 5 6

20

40

60

80

100

120

140

Months from first oil

with geosteering

without geosteering


Multi-lateral wells – technology to drill complex wells, which permits two •or more well bores to be drilled off the main mother bore further into the production zone, thereby increasing the productivity of the well and accessing more efficient reserves per well. We drilled our first multi-lateral well in 2007 with an outstanding result of 70% higher productivity than was expected. Multi-lateral wells will become standard design for several of our field development projects.

Note: sidetrack wells and horizontal wells are not mutually exclusive. Approximately 40% of sidetrack wells drilled in 2007 are horizontal wells.

Low-salinity water injection is being evaluated for potential use to stimulate •better oil movement than high salinity waterfloods:

Low-salinity process involves membrane techniques to lower salt •and solids;

Low-salinity waterflood trials are being considered within TNK-BP’s fields.•

Heavy oil recovery – TNK-BP’s asset base includes large undeveloped •resources of heavy viscous oil. Its production requires new technologies not commonly used in Russia today:

Multi-lateral wells to enable economic rates and access to secondary •reserves. Multi-lateral wells can reach up to 2,500 meters and produce oil at 8 to 10 times the rate of standard vertical wells.

Steam flooding, which heats the oil, reducing its viscosity and resistance •to flow. This process is currently being appraised for TNK-BP’s viscous fields.

Sidetrack well More than 100 drilled in 2006•By 2009-2010 - more than 400 per year •(25% of total wells to be drilled)

Horizontal well Number increased to more than 100 in 2006 •To grow to more than 300 per year (or more) by 2010•

Multilateral well First multilateral well drilled in 2007•Productivity of first multilateral well is 70% higher •than anticipated 270 tons per day vs. 150 tons per day anticipated)


Pipeline integrityTNK-BP inherited 28,000 km of infield gathering pipelines, 40% of which •are 15 years old. TNK-BP will spend $1.7 billion over five years on pipeline and facilities integrity.

We are applying innovative solutions, such as improved external coating •and usage of polyethylene liner, as well as chemical corrosion inhibition, to protect our pipeline network from corrosion.

A pilot to test chemical inhibitors that have rarely been used in Russia before •has been conducted at our Talinskoye field in Nyagan. The pilot was successful, and we now plan to extend this program to cover almost 10,000 kilometers of pipelines by 2010, at an annual cost of approximately $60 million.

Pipeline integrity results through 2006:•

1,500 km replaced for $200 million;•

over 6,500 km inhibited;•

over 3,500 km inspected;•

27% decrease in the number of leaks;•

11% reduction in the number of spills;•

25% decrease in the number of spills exceeding one barrel;•

4,500 km to be replaced by 2011 at a cost of $660 million.•


Downstream technologyRyazan modernization completed for a cost of over $600 million. Modernization •included: installation of a fluid catalytic cracker unit, vacuum gasoil hydrotreater, hydrogen and sulphuric acid units, alkylation and izomerization units. Benefits included: fuel oil production decline by 8%, production of 1 million tons per year of high-octane gasoline and 1.6 million tons of diesel fuel, 10% reduction of SO2 emissions.

BP Ultimate high performance fuel comes in octane grades 95 and 98 and •delivers improved engine power and acceleration. It has two and a half times more engine cleaning power compared to ordinary fuels and less sulphur emissions by up to 66%.

Stewarding major projectsThe Capital Projects Procedure has been in use in TNK-BP as guidance •on the process for development and execution of major projects, with focus on business objectives. After two years of use, it is being re-drafted to ensure that learnings are incorporated to enhance excellence in major project execution. In addition, a team of project professionals is forming to provide management assurance and early intervention to projects that are in execution.

The Major Projects University program was launched in 2006. One hundred •and twenty three TNK-BP project specialists from Moscow and regions where major projects are being implemented attended. This program is vital to build TNK-BP’s project management skills for the successful delivery of major projects and for further enhancing our engineering capabilities.


Managing contractors’ performance Supplier Performance Management is the process by which TNK-BP can gain •further assurance that suppliers’ performance are meeting expectations and goals. This will allow us to extend our performance culture to our suppliers and create a common framework to manage them.

In Q4 2006, TNK-BP rolled out STEPS (System to Evaluate Performance •of Suppliers), which is a web based bi-lingual application designed to gather and transparently evaluate supplier performance data. This data will be used to proactively manage and elevate our suppliers’ technical, operational, and safety performance and be used as a primary basis for contract award. The scorecard design allows STEPS to be expanded to other services.

DOWNSTREAMTNK-BP INFORMATION SHEET 32

Downstream

33DOWNSTREAMTNK-BP INFORMATION SHEET

RefiningIn refining we have invested to improve the integrity and condition of the plants •in our refineries. Our planned budget in 2007 of $17 million will more than double in 2008.

Adjusted for disposals, we have increased our refining throughput since 2003 •by 15% to approximately 34 million tons per annum in 2006.

We have increased our average refining availability from 85% in 2003 to 92% •today and we are driving toward international benchmark levels of 97-98%.

We will focus on improving our energy efficiency through reduced consumption •and reducing operating overheads through greater use of technology.

We also produce less fuel oil and upgrade more of the oil barrel, producing •a greater proportion of high quality fuels to meet demand and maximize net-backs.

Over the last two years, we launched production of several new products at our •refineries, including low sulfur gas oil at Ryazan, Lisichansk and YANOS Refin-ery, M-grade gasoline at Lisichansk and BP Ultimate gasoline at Ryazan.

In 2007, we have major turnarounds scheduled at two refineries. We have just •completed the work program at the Ryazan Refinery. The purpose of the Ryazan turnaround was to implement required maintenance, improve-ments to enhance yields and remove turnaround cycle constraints. The turnaround impacted 17 units, requiring 1,200 individual scope items, 120 contracts, 200 engineering designs and more than 2,600 contractors on site. It was completed within budget ($46 million), 3 days ahead of schedule with no serious health and safety violations. Significant accomplishments of this complex turnaround include engagement of contractors on health and safety standards, safe decommissioning of an existing fluid catalytic cracker, effective planning and procurement processes. In the fall of 2007, the Saratov Refinery will also have a turnaround using the same successful processes and tools that were applied at the Ryazan Refinery, employing international best practices.

34 DOWNSTREAMTNK-BP INFORMATION SHEET

SAP system will be launched at the Ryazan Refinery in July 2007. The SAP •system will provide efficiency and transparency in areas of finance, personnel and salary management, maintenance, equipment history and project manage-ment. This is the first TNK-BP refinery to implement SAP and the second in Russia. The redesigned business processes were finalized and agreed before the formal design and therefore implementation of all modules could be com-pleted in a challenging seven month period.

Over the next five years, we plan to invest more than $1 billion in refining. •Essentially all of this will be directed towards maximizing the production value from the existing assets.

Marketing and salesIn marketing TNK-BP pursues a dual-brand strategy with each brand target-•ing different client segments. It retails under the BP brand through company-owned and operated sites in highly urbanized markets such as Moscow and St. Petersburg in Russia. It further retails under the TNK brand in other regions of Russia and Ukraine in addition to the markets mentioned above. We plan to spend approximately $500 million of organic investment on our existing market-ing assets over the next five years.

TNK is expanding its retail presence in the regions:•

Rostov JV “TNK-South” launched on 1 April 2006, with 35% of the region’s •market and 127 retail stations.

In St. Petersburg TNK-BP plans to build 60 retail sites at a total cost of •$150 million over the next five years. Of the total, 40 sites will carry the TNK brand, while 20 others will sell BP-branded fuels. The first filling stations will be constructed on 15 land plots purchased by TNK-BP at auction in December 2005. Four of these are currently being developed. With the 60 planned stations, TNK-BP will become one of the leaders of the local fuel market.

The TNK brand has undergone renovation resulting in a new look for TNK retail •sites. The goal was to create a distinct and relevant brand positioning, which will increase customer trust and loyalty as we improve the quality of services and products.


By the end of 2006, 68 TNK sites in Russia had the new look and feel, new •operating standards and new shops. Another 155 will carry the new offer by the end of 2007, which will bring the number of re-branded company-owned sites to approximately 40%.

The TNK brand is operated in Ryazan, Tula, Kaluga, Kursk, Karelia, Moscow, •Rostov, Saratov , Kiev, Krasnodar and will be introduced to Saint-Petersburg in August 2007. In addition to company-owned sites, the TNK brand is also marketed through “jobbers” – these companies are supplied fuel, carry our brand and agree to comply with our standards. Jobbers allow us to extend our brand into areas where we do not invest capital ourselves. Currently, there are 529 branded jobber sites in the TNK retail network. We currently have 29 jobber sites with the new TNK look and feel.

In 2007 we launched an advertising campaign for the TNK brand to promote •responsible and safe driving. This issue has gained a lot of public attention recently. The video advertisement will call on drivers to drive sensibly and act responsibly. The goal of this campaign is to establish an “emotional bond” with the drivers and improve safety on Russia’s roads.

TNK-BP has a portfolio of 78 depots and 142 retail sites currently mothballed. •A project has been set up to fully dismantle these assets and carry out all necessary environmental remediation. This project started this year with a pilot phase in Kaluga, in order to define the safest ways to proceed with this high risk activity. Further on, once the pilot is over and its lessons learned are under-stood, the project will be rolled out in all TNK-BP marketing subsidiaries.

In 2006, we launched the Marketing Logistic Transformation project, driving •for rationalization of our depot network, upgrade of all strategic depots to inter-national standards, including bottom loading and automation, and renewal of our truck fleet. By end 2007, we will complete 40% of the depot rationaliza-tion plan and renew 50% of our trucks. Overall, we will invest $110 million in this initiative over 2006-2012, which will result in a 20% logistic cost improve-ment.

In September 2006 TNK-BP launched BP Ultimate unleaded fuel with octane •grades 95 and 98 at all BP’s retail stations in Moscow and the Moscow region. The new fuel delivers increased engine power, cleans engine deposits and pre-vents their formation in the future, provides fuel economy and reduces sulphur emissions by 66%.


Since the launch over 50% of A95 customers have switched to Ultimate 95.The •sales of Ultimate 98 have grown by more than 30% compared to the sales of ordinary A98 fuel before Ultimate 98 launch. Currently one in every three of our BP fuel customers is an Ultimate customer.

Retail Automation Project was introduced to support new business processes •in retail and to employ the latest retail automation technology. Retalix’s solution for Point of Sale, onsite back office and central retail management system went live in November 2006 in Saratov. This has been followed by the launch of a rollout program for an additional seven regions. Currently the system is operating in 45 sites in Saratov, Kursk and Ryazan. We are on track to have 215 sites using the Retalix solution by the end of 2007. This will improve speed of customer service and unify all TNK retail sites onto one IT support system.

Malina brand loyalty program: TNK-BP is a participant in the MALINA (raspber-•ry) coalition brand loyalty program, the first of its type in Russia, launched in the Moscow retail market on April 3, 2006.

BP brand retail sites are co-participants with 6 other market leading retailers: •Ramstore supermarkets, Beeline telecoms, “36,6” pharmacies, Ile de Beaute perfumeries and Rosinter casual restaurants. In October 2006, Raiffeisen bank joined the Malina program. It has launched a new Visa Malina - Raiffeisen bank credit card designed specifically for the Malina program participants. The credit card allows program users to receive additional points by using the card to purchase goods and services from both Malina participants and outside the program. To date over 2 million cards have been issued to customers and 43% of BP customers collect Malina points.

TNK-BP is also developing its market presence in other products such as lubri-•cants, bitumen, aviation fuels and marine bunkering. The intention is to move towards end-consumers in these B2B markets by providing customized com-petitive offers.

Lubricant – in 2006 TNK Lubricants introduced new visual standards and brand •positioning. On 1 September 2006 the new package for TNK Magnum was launched. The new sales channel strategy was approved in 2006 and 32 new products were launched.


Bitumen – in early 2006 TNK-BP approved the bitumen strategy and set up •a dedicated Bitumen Performance Unit to implement it. Since its inception the business has restructured route to market and is working on an upgrade of production units in Ryazan and Saratov. It is also developing transportation and storage infrastructure. Sales volumes in 2006 increased by 30% versus 2005 sales.

Aviation – in 2006 TNK-BP became one of the largest suppliers of jet fuel •to Moscow’s key Sheremetyevo and Domodedovo airports.

Sales, trading and logisticsThe new strategy was finalized for Sales, Trading and Logistics Business Unit •(STL), targeting higher netbacks and better optimization. Supply function re-sponsible for production planning, daily scheduling and business development was set up to deliver additional value via synergy with Upstream, Marketing and Refining. Supply will concentrate the efforts on capturing new opportunities in changing business environment.

Trading and Revenue Accounting Process re-engineering project (TRAP) was •completed, improving controls over trading operations and introducing efficien-cies to the process. During TRAP project 24 key controls over trading and revenue accounting were implemented and comprehensive TNK-BP clients database was set up.

We have reduced the number of IT Systems in STL from five to two core •systems ASPECT and SAP, driving increased efficiency in our STL operations.

The new rail car optimization system named Zemeter is in process of imple-•mentation in Logistics. The scope of Zemeter implementation includes rail car prediction and scheduling modules.


UkraineSignificant improvements in corporate governance of our Ukrainian operations •have been delivered. We have simplified TNK-BP Ukraine corporate structure and have fully consolidated commercial activity in Ukraine, resulting in increased transparency and efficiency of our operations.

We have invested $37 million to complete several major projects at our Linik •refinery, including new isomerisation, bitumen and merikat units.

At the end of 2006, the Lisichansk Refinery completed a full refinery turnaround •– the extended maintenance will enable the plant to operate on a two year turnaround cycle.

Production of 50 ppm diesel and M-grade gasoline has started at Lisichansk, •allowing the refinery to supply better products compliant with higher ecological standards to the Ukrainian market.

We are actively working with the Ukrainian government to develop •a business environment supportive of long viable refining and marketing sectors in Ukraine.


Productsoutputin1H2007

Crudesalesin1H2007ProductssalesinRussiain1H2007

Gasoline

Products output in 1H 2007(incl. Yaroslavl Refinery share) - 14.2 million tons

DieselJetFuel oilOther productsLoss and own use

Pipe export

Crude sales in 1H 2007 - 40 million tons

Rail exportTo CISTo Ukraine (Lisichansk)

To MozyrDomesticTo Yaroslavl RefineryTNK-BP refineries

Product sales in Russia in 1H 2007(incl. products from YaroslavlRefinery) - 13.6 million tons

ExportDomestic large wholesaleMarketing

22%

29%

4%

39%

6%3%7%2%

8%

8%

27%

57%

12%

31%

29%

10%

6%

GASTNK-BP INFORMATION SHEET 40

Gas

41GASTNK-BP INFORMATION SHEET

TNK-BP’s goal is to substantially enhance its gas business as a portion of its overall business and transform itself from an oil group into a major oil and gas group. TNK-BP aims to achieve this by exploiting it’s significant associated natural gas resources through a gas utilization enhancement plan to take total gas utilization across the company to over 95% by 2011 and through developing its gas or gas and condensate projects such as Rospan. The major activities underway in 2007 to support TNK-BP’s Gas Business strategy include:

Associated gasTNK-BP embarked on a commitment to invest in excess of $1 billion over the •next five years to materially enhance its overall associated gas utilization to a rate in excess of 95% by end 2011. This program will involve the construc-tion of new gas gathering and processing facilities, gas re-injection as well as the construction of “own use” new gas-fired electric power facilities.

On November 15, 2006 TNK-BP and SIBUR Holding (Gazprom subsidiary) •announced the creation of a joint venture to process associated gas produced by TNK-BP and other oil and gas companies in the Nizhnevartovsk region. The parties own 49% and 51% in the new company respectively and equally share management control.

Under the terms of the venture, TNK-BP supplies associated gas from its fields •to the gas processing plants at Belozerny and Nizhnevartovsk (which have been transferred to the JV by SIBUR).TNK-BP receives 100% of dry lean gas produced from associated gas and SIBUR receives 100% of liquid products. Dry lean gas is then supplied to the Nizhnevartovsk state district power plant which delivers electricity to the city of Nizhnehvartovsk and other consumers. This JV is helping TNK-BP to monetize the associated gas it produces and reduce gas flaring. Improving the gas utilization rate will also lead to reduction of greenhouse gas emissions.

42 GASTNK-BP INFORMATION SHEET

RospanTNK-BP owns a 100% interest in Rospan, a gas and condensate production •asset located in Yamal-Nenets autonomous district of Northern Russia.

Rospan’s commercial gas sales reached approximatly 1.5 billion cubic meters •in 2005 on a gross basis and approximately 2.7 billion cubic meters per year in 2006 (i.e. a 80% increase in annual sales volumes).

TNK-BP invested approximately $58 million of capital expenditures in 2006 and •will invest $105 million in 2007 to further Rospan’s activities. The investment is intended to support Rospan’s ongoing operations through upgrades of exist-ing facilities and the completion of new wells, and interpretation of 3D seismic surveys.

Kovykta On June 22, 2007 TNK-BP, Gazprom and BP executed a “Heads of Terms” •agreement, the provisions of which included the sale of TNK-BP’s interests in RUSIA Petroleum and East Siberian Gas Company (ESGC) to Gazprom for a price of between $700 million and $900 million (to be finalized once necessary due diligence and adjustments have been made). TNK-BP has an option to re-enter the project at blocking stake level under certain conditions. This sale is part of a broader agreement between TNK-BP, Gazprom and BP to invest jointly in major long-term energy projects in Russia and around the world. A working group has been established to finalize the details of completion by October 2007. In the meantime TNK-BP continues to work on the Kovykta project as detailed below.

Kovykta Regional Project phase 1 A is in the project execution stage. Phase •1 A target to supply gas to the town of Zhigalovo via a 112 km pipeline by the end of 2006 has now been achieved.

The full-scale regional project is expected to provide over 2.5 billion cubic •meters per year once plateau is achieved in 2009 with an estimated investment of $1.2 billion.

43GASTNK-BP INFORMATION SHEET

Full-scale project scope envisions a 670 km gas pipeline from the field to •Irkutsk via the cities of Sayansk, Usolie Sibirsk and Angarsk. In addition, RUSIA Petroleum plans to install a gas treatment and condensate processing plant. TNK-BP expects that deliveries of gas to the city of Irkutsk will take place by the end of 2009-2010, with supply to intermediate locations along the pipeline route to occur prior to this date.

ESGC will construct, own, operate the pipeline, and conduct gas wholesale •operations. ESGC, a gas transportation and marketing company, was estab-lished in March 2004 as a 50/50 joint venture between TNK-BP International and the Irkutsk region administration.

Kovykta export project is envisioned to deliver in excess of 30 billion cubic me-•ters of gas per year to China and South Korea once on plateau and a cost of around $20 billion for upstream and midstream (includes pipeline to China and Korea) investments.

The international phase of the project is still at an early stage of development •and subject to a number of uncertainties.

PEOPLETNK-BP INFORMATION SHEET 44

People

45PEOPLETNK-BP INFORMATION SHEET

TNK-BP employs approximately 71,000 people in Russia and Ukraine. This includes 100 expatriate staff and 170 staff seconded from the BP shareholder.

Compensation and benefitsCompany-wide salary and reward system developed, harmonized •and implemented. This is based on the Hay Group Job Evaluation methodology, a global benchmark for organizations of the size and complexity of TNK-BP.

Salary levels compared, on an ongoing basis, with a peer group of local •and international companies operating in the Russian Federation. Regular monitoring of the competitive labor marketplace, using independently-provided data.

Short-Term Incentive (annual performance-related bonus) provided company-•wide and linked to performance at corporate, business unit, and individual levels.

Long-term Incentive Plan geared to sustainable business success, is applied •to management cadre of some 800 people, more than half of whom work in the regions.

A competitive non-cash benefits package, applied to majority of staff, includes:•

non-state pension plan;•

targeted housing program;•

non-state medical insurance;•

sanatorium and spa treatment;•

a growing range of other social benefits and programs.•

46 PEOPLETNK-BP INFORMATION SHEET

Training and developmentIn 2006 TNK-BP recruited almost 500 graduates from leading universities •across Russia and Ukraine, 80% with a “specialist” degree in oil and gas.

In 2007 we launched an innovative Grants program in partnership with the RF •Ministry of Education and Science, providing significant financial support to university projects selected on merit by open tender.

TNK-BP sponsors and recruits a growing number of postgraduates from •petroleum-related Master’s degree programs, delivered in partnership with leading European institutes.

In-house leadership development programs include:•

“Horizons” – a development program for university graduates, building •technical and business skills among 800 TNK-BP “Young specialists”.

“Perspective” – aiming to equip field supervisors and others at the “front •line” of management with the tools to lead teams more effectively.

“Ascent” – providing tailored opportunities to accelerate the development •of 100 individuals with senior leadership potential.

Programs with leading business schools, developed specifically for TNK-BP, •provide exceptional opportunities for executive development. Graduates include 200 executives from INSEAD and 50 top executives from Thunderbird.

Knowledge interchange between Russian and expatriate professionals •is catalyzed through:

Secondment of high-potential Russians to BP locations - 33 to date;•

Short-term training assignments at BP (less than 5 months) - 90 to date;•

Secondees from BP, transferring skills to Russians in TNK-BP - 170; •

Intensive programs to develop both English and Russian language capabil-•ity, with specific individual targets, independent testing and certification.

Over 250 in-house training programs, typically 2-3 day seminars, are available •to employees company-wide. These address a broad range of capabilities, from technical and business-specific competencies to teambuilding and other interpersonal skills. Over 150,000 man-days of professional training and development were delivered by the end of 2006.

47PEOPLETNK-BP INFORMATION SHEET

Culture and InclusionBuilding on previous experience a unified, company-wide awards program was •launched in 2006. This includes regional and subsidiary awards, as well as a company-wide Chairman’s award for HSE and an award for achievements in Technology. From 119 team submissions in 2006, winning projects were from multidisciplinary teams with themes:

Chairman’s award for HSE – “Development and Implementation of the Five •Star Program in Oilfield services”;

Technology – “BP Ultimate: a New Generation Fuel”. •

As in 2003 and 2004, an employee opinion survey was completed in November •2006 at subsidiaries in nine regional locations across Russia and Ukraine and the corporate center in Moscow. The survey included interviews with local management, focus groups, and 4,239 questionnaires completed anonymously by a broad cross-section of employees. Results can be summarized as follows:

In contrast to previous surveys, employees now view TNK-BP as a well-•established, fully operational company. Overall perceptions of the company (selected from a range of options) are characterized by “stability”, “growth” and “perspectives”, with “difficulties” in fourth place.

TNK-BP’s unique culture, combining the best of Russian and global busi-•ness approaches, is seen as a strength.

In the view of most respondents, TNK-BP continues to show commitment •to the principles of business ethics, human and environment safety priori-ties, transparency, compliance with the law and social responsibility. In their view, these are the company’s distinctive features.

88% of employees recognize company-provided opportunities to improve •their professional skills “to a certain extent”, while 40% believe this opportu-nity is provided to them “in full”.

Internal communication effectiveness is little changed compared to 2004, •but information now flows from TNK-BP sources rather than external me-dia. Employees cite company publications, announcements and their direct supervisor as their usual sources of company news, rather than newspapers and television.

HEALTH, SAFETY AND ENVIRONMENTTNK-BP INFORMATION SHEET 48

Health, safety and environment

49HEALTH, SAFETY AND ENVIRONMENTTNK-BP INFORMATION SHEET

GeneralDevelopment of a unified HSE management system to clearly define and •segregate activities, standards, processes and accountabilities was finalized in December 2006. The system implementation pilot project was finalized in April, 2007. The rest of the year will be dedicated to further system implementation in the company’s subsidiaries. The system will allow collection and processing of HSE data, reporting and cause analysis across the whole company.

HSE objectives are written into performance contracts for all leaders. The 2007 •performance contracts at the corporate, functional and stream levels include KPIs (Key Performance Indicators) with the focus on improving HSE reporting transparency, decreasing the frequency of LTA (Lost Time Accidents) and MVAR (Major Vehicle Accident Rates).

An overall number of 15-16,000 man-days of HSE-related training was •delivered in 2006.

General Directors HSE commitment assessed in January 2007, HSE PDPs •(Personal Development Plans) developed based on the results of the assessment. Six 2-day HSE Leadership training sessions have been conducted in Nizhnevartovsk, Buzuluk, Irkutsk and Moscow. A total of 95 General Directors and contractor management participated in these sessions. A one-day HSE forum for General Directors and contractors was carried out on 21 June 2007.

Other safety interventions for 2007 include:•

HSE leadership and accountability – complete General Directors HSE com-•mitment assessment and development plans based on the assessment results.

Contractor safety management – integrate contractor workforce in operat-•ing site activities, improve reporting transparency, implement PPE (personal protective equipment) standard, and introduce joint HSE planning for Con-tractor and Customer.

Transportation safety – road accidents reporting transparency improvement, •defensive driving training, technical support for safe operations of vehicles.

50 HEALTH, SAFETY AND ENVIRONMENTTNK-BP INFORMATION SHEET

Permit-to-work system – standardization of permit-to-work methodology, •identifying hazardous operations and ensuring their safe performance.

Emergency response – ensure availability and certification of emergency •rescue brigades, oil spill response plan development and approval, imple-mentation of emergency response procedure.

Health – continue implementation of corporate standard on emergency •medical aid provision: upgrade over 40 first aid posts, purchase 20 modern ambulances and hire competent medical staff to ensure operation of medi-cal aid posts. Begin cardiovascular diseases prevention program and ensure on-site emergency medical response.

EnvironmentOver the next five years, we will spend at least $2.68 billion on HSE. This figure •does not include planned expenditures in business stream budgets.

Of this amount, $1.18 billion will be spent on general HSE activities and •remediation. Split will be approximately $200 million on legacy remediation and decommissioning; $300 million on various environmental capital investments (i.e. regional water purification stations); $330 million on safety (i.e. transportation safety and PPE); $350 million on environmental operations, such as waste management and ongoing remediation.

A further $1.7 billion will be spent on facilities and pipeline integrity improving •our infrastructure and reducing leaks by 50% from the 2004 baseline. Part of this will come from business stream budgets.


Facilities and pipeline integrityTNK-BP’s inherited mature oil and gas assets base includes over 28,000 km •of aging pipelines, over 40% of which are over 15 years old.

Since 2003, TNK-BP has become a major investor in the inspection, •replacement and protection of pipelines, which is helping the Russian oil and gas industry to significantly improve environmental protection.

TNK-BP has already installed over 1,400 km of new pipelines to replace old •worn out lines, at a cost of almost $200 million. The company intends to replace a further 4,500 km of older pipelines over the next five years.

The injection of corrosion inhibition chemicals into pipeline fluids is also being •used as a technique to protect pipelines from further corrosion. An initial pilot project in the Nyagan region demonstrated that the introduction of water soluble inhibitor technology prevented leaks in the protected lines.

Currently over 4,800 km of pipelines are being inhibited at an annual cost of •$23.5 million. The inhibition program will be increased to cover almost 10,000 km of pipeline per year by 2010, at a projected annual cost of $58 million.

TNK-BP is bringing western technology to Russia to help rehabilitate older •pipelines – inserting a polyethylene liner into pipelines to help prevent further corrosion and leaks.

TNK-BP is also upgrading the protection of pipelines against external corrosion. •From 2007, all new pipelines will have factory applied external coatings in accordance with new company standards. Furthermore, a pilot project has been developed to investigate the use of cathodic protection on key pipelines (large diameter or high pressure lines) from external corrosion.

The corporate Integrity Management Standard was approved on 10 January •2007 and issued to subsidiaries. It provides the basis to achieve and maintain infrastructure with the necessary mechanical integrity to underpin future production and refining delivery reliably and mitigate the impact of our operations on the environment. The standard will be implemented in a phased manner over the next five–ten years, initially through the Integrity Scorecard process which identifies current integrity risks and puts in place action plans.


In 2006 a baseline survey of upstream facilities was completed: the information •was used to understand the relative importance of integrity management (IM) to each facility. At the end of 1Q 2007 IM scorecards were in place for over 240 upstream facilities and 100 refinery units. These scorecards have identified about 3,000 risk reduction opportunities and individual facility/refinery unit action plans have been completed in time for consideration in the 2008 - 2013 Five-year plan.

A leadership IM reporting system has been developed and is now put in place. •In addition, there is a quarterly review by Operations Committee of progress with the Integrity Program.

The key objectives of the IM program for implementation in 2007 are:•

To continue execution of the pipeline replacement program, to reduce leaks •year on year (4,550 km of pipeline is planned to be replaced by 2011).

To expand the pipeline inhibition program (from 6,500 km of pipeline in-•hibited at the end of 2006 to almost 10,000 km by 2010), to continue leak reduction year on year.

To continue and expand implementation of a facilities and refining integrity •program.

To start the implementation of an integrity program for major projects.•


Associated gas flaring reduction projectsAn extensive program of investments and activities has been identified to •improve overall utilisation significantly and reduce flaring to reach full Russian Federation compliance of 5% by 2011.

During the course of 2006 the following actions were undertaken:•

Associated gas strategy was prepared and approved by the Board.•

Project teams were established to progress gas utilization opportunities •by region.

Preferred gas utilization projects were identified and recommended to man-•agement for further development and evaluation.

OrenburgRegion

The current Orenburg Integrated Project (OIP) status is as follows:•

Bobrovka – phase 1 gas gathering program is in progress to utilize 60-70 •million cubic meters per annum of currently flared gas.

Pokrovka – agreement reached with Gazprom to take 300 million cubic •meters per annum into Orenburg-Samara trunk line.

Zaykinskiy area and Gas Processing Plant – comprises gas gathering and •plant expansion. Rostashiy compressors passed factory acceptance test in December 2006 and now in storage, pending delivery of balance of plant equipment, delaying utilization of 260 million cubic meters of gas per annum until January 2008.

Eastern fields – negotiating with Gazprom for access to Orenburg Gas Pro-•cessing Plant for processing 250 million cubic meters of gas per annum, via unused Skapovo pipeline to bring gas to the plant.


NizhnevartovskRegion The current status of the project is as follows:•

Gas gathering systems across the region are currently progressing through •the design phase. Approximate capital expenses in these projects is $150 million.

Expansion of joint venture with SIBUR Holding is currently being studied. •This project may include construction of more than 200 km of gas transpor-tation pipelines and 3.5 billion cubic meters gas processing capacity with a total cost up to $600 million (TNK-BP share – 49% or around $314 million). For more details on the joint venture please refer to page 41.

Gas injection modeling is currently underway to evaluate gas re-injection •and storage opportunities aiming to deal with medium-term and seasonal demand swings.

Reviewing options to construct the third unit of the Nizhnevartovsk Power •Plant, creating a demand for an additional 1.3 billion cubic meters of dry gas and ensuring long-term contractual supply of power to oil production in the region.

RemediationTNK-BP inherited approximately 5,200 hectares of polluted land with 875 •sludge pits containing close to 500,000 tonnes of sludge. More than 80% of this pollution was concentrated at the company’s largest and most important field, Samotlor. The clean up effort began in 2003 and by the end of 2006 the company had remediated approximately 2,000 hectares.

During 2006, 890 hectares of legacy polluted land was remediated, including •technical and biological remediation. This was in excess of the planned scope of 760 hectares.


The annual return of polluted sites to the authorities is planned to be greater •than 700 hectares in 2008 and 2009, increasing to over 800 hectares in 2010 and 2011.

Several measures are being put in place to ensure more robust control of •the remediation process and improve the quality of work carried out. This includes the introduction of new model contracts, operational management guidelines, new technical norms and three-year contracts. Most significantly, contractors have been pre-qualified to carry out independent supervision of the remediation works. They will be responsible for ensuring that work is carried out in accordance with the project design and for conducting the testing of soil samples on completion of the work.

The TNK-BP Technical Remediation Standard was approved in 2006. In 2007 •we plan to put in place and commence implementation of the Remediation Standard, which will help increase efficiency of remediation programs.

Downstream decommissioning program has started (refer to Downstream •section on page 32).


SafetyTNK-BP’s program to improve transportation safety includes mandatory vehicle •maintenance, replacement of old vehicles and installation of seatbelts. Almost 100% of Oilfield services vehicles are already equipped with seatbelts where technically and legally possible. The Major Vehicle Accident Rate improved by 6% in the first 5 months of 2007 over the same period of 2006.

HSE Control team assimilated and operational. Over 720 inspections •completed with 6,500 non-compliance and violations identified. Around 5,800 corrective actions were developed and endorsed as the result of the audits and almost 3,100 of the actions were implemented by the end of Q1 2007. Key areas of non-compliance: technical state of infrastructure, PPE use (especially for contractors), lack of equipment and working places certification.


Contractor Safety Performance Standard and supporting technical standards •were developed and approved in 2006. Full-scale implementation is occurring in 2007. This will stipulate requirements for contractors to meet and deliver a program to help them understand and comply. Preliminary contractor training in accordance with the Standard has already started in the regions.

Two full sets of modern and effective PPE have been issued to 100% of •relevant workforce. This was completed during 2006 and new sets of PPE will be issued each year in future.

Four table-top crisis response training exercises were conducted in 2006 •together with a full-scale crisis response training exercise. Four more excercises will take place in 2007.

In 2006, approximately $2.5 million was spent on a pilot project in Orenburg •to improve TNK-BP’s ability to respond to a medical emergency. Orenburg experience in this field is being extended to the other areas of company’s operations.

Global OGP2004

TNK-BP2003

TNK-BP2004

TNK-BP2005

TNK-BP2006

TNK-BPJan-May 2007

Begin collectingNear Misses 2008

Work RelatedFatilities

Lost timeinjuries

Recordableincidents

Near Misses

1 1 1 1 1 1

20 6 11 10 13 33

60 4 12 12 16 72

24000

FINANCETNK-BP INFORMATION SHEET 58

Finance

59FINANCETNK-BP INFORMATION SHEET

TNK-BP’s business strategy is underpinned by a prudent financial strategy, which is aimed at achieving business growth objectives while maintaining the company’s strong balance sheet and enhancing its financial flexibility.

TNK-BP International LtdFinancialreporting

TNK-BP International Ltd (TIL) reports its financial results twice a year •to the Luxemburg Stock Exchange, where the company’s Eurobonds are listed.

Financial statements are based on consolidated accounts for the TIL group •of companies and are prepared under US GAAP.

Financialhighlights

Gross revenues benefited from a higher price environment in 2006 with average •realizations increasing by 18% to an equivalent of $57 per barrel.

Production fell from 1,740 million barrels of oil equivalent per day in 2005 •to 1,699 million barrels of oil equivalent per day in 2006 as a result of divestments; excluding this effect, underlying oil and gas volumes grew by 3% (1.2% growth on an oil basis).

$ billion 2005 2006 % change

Gross revenues 30 35.5 + 18%

Net revenues 22.2 24.7 + 11%

EBITDA 9.1 11.2 + 23%

Net income 4.7 6.6 + 40%

CAPEX 1.8 2.3 + 28%

Dividends declared 5.4 5.0 - 8%

ROACE (%) 39% 48% + 3%

60 FINANCETNK-BP INFORMATION SHEET

The effect of export duty lagging the quoted Urals price caused a negative •impact as the average Urals price increase in 2006 of $11 per barrel was more than offset by a $14 per barrel increase in the export duty reference price; this reduced the improvement in net revenues to 11%.

Divestment gains contributed significantly to EBITDA growth with the benefits •from the sale of assets in the Udmurtia region in 3Q 2006 exceeding the gains realized in 4Q 2005 from the sale of Saratovneftegas.

A one-off provision of $1.5 billion was made in 2005 in respect of prior year tax •audit claims; tax provisions in 2006 were of a much smaller scale and therefore contributed to the 40% growth in net income.

Debtprofile

This year improvement of TIL ratings continued with obtaining a one notch •upgrade by Fitch Ratings to the first step of investment grade BBB- (Stable) in March 2007. Therefore, TIL currently has investment grade ratings from Moody’s and Fitch and remains one notch below investment grade with Standard & Poor’s.

TNK-BPInternationalLtdcreditratingsandRussia’ssovereignratingsinMarch2007

$ billion Standard & Poor’s 2006

Moody’s Fitch Ratings

Entity Rating Outlook Rating Outlook Rating Outlook

TNK-BP Int Ltd BB+ Stable Baa2 Stable BBB- Stable

Russia BBB+ Stable A2 Stable BBB+ Stable


TIL debt portfolio characteristics are shown on table below. •

In July 2006 TNK-BP successfully placed five and ten-year Eurobonds totaling •$1.5 billion. These Eurobonds constitute the first drawdown under TNK-BP’s $5 billion Debt Issuance Program established in September 2005. The five-year $500 million issue priced with a coupon of 6.875% at a spread of +190bps over US Treasuries. The ten-year $1 billion issue priced with a coupon of 7.500% at a spread of +245bps over US Treasuries. BNP Paribas, Citigroup Global Markets, Credit Suisse and UBS Investment Bank acted as joint lead managers for the deal. Citigroup Global Markets and Credit Suisse acted as joint book-runners on the transaction.

A $1 billion unsecured loan Facility was executed on November 9, 2006 •between TNK-BP Finance S.A. (guaranteed by TIL), and a consortium of leading international banks. The Facility was drawn down on December 4, 2006 and bears interest of LIBOR + 0.575% during the first 3 years of its term, and LIBOR + 0.625% thereafter. The overall term of the Facility is five years with a free prepayment option.

In March 2007 TNK-BP placed a further five and ten year Eurobond offering, •raising $1.3 billion. This placement proceeds were mainly used to repay $1.2 billion of short debt. As a result the average debt portfolio life rose to 4.3 years increasing share of long debt to 82%.

Debt portfolio characteristics Dec. 31, 2005 Dec. 31, 2006 Dec. 31,2006

Total debt, $ billion 3.6 6.9 6.9

Net debt, $ billion 2.3 5.2 5.7

Gearing (net debt/net debt + equity) 21% 34% 35%

Fixed / Floating debt 4% / 96% 22% / 78% 41% / 59%

Long-term debt / Average portfolio tenor 80% / 2.2 years

70% / 3.4 years

82% / 4.3 years

Unsecured / secured debt 50% / 50% 100 % / 0% 100% / 0%

62 FINANCETNK-BP INFORMATION SHEET

TNK-BP HoldingTNK-BP Holding (TBH) is a Russian registered holding company, created •in 2004 as part of a restructuring of the TNK-BP group. TBH consolidates the majority of TNK-BP’s upstream and downstream assets in Russia.

Financialreporting

As required by Russian legislation, TBH files quarterly Statutory Accounts •with the RF Financial Markets Service; these are prepared in respect of the standalone TBH legal entity under Russian Accounting Standards (RAS).

For 2006, TBH has prepared its first set of consolidated Financial Statements •for the TBH group of companies; these have been prepared under US GAAP.

TBH Statutory Accounts under RAS and consolidated Financial Statements •under US GAAP are published on our corporate website.

On June 15, 2007 TBH held its second Annual General Meeting •of Shareholders (AGM) where it presented its first set of US GAAP consolidated group accounts, along with RAS accounts.

TBH plans to hold general meetings of shareholders twice a year to consider •full year and half yearly accounts and to present associated dividend recommendations.

TBH results under both RAS and US GAAP consolidated accounts •are published on TNK-BP’s corporate website.

Dividends

At TBH’s AGM on June 15, 2007, shareholders approved a recommended •dividend payment of RUR 22.3 billion ($861 million and RUR 1.37 per share).

Including the interim dividend of RUR 97 billion approved by the Extraordinary •Meeting of Shareholders held in November 2006, TBH’s annual dividend for 2006 totals RUR 119.3 billion ($ 4.6 billion). This represents 100% of TBH earnings for 2006.

TBH dividends paid for 2004-2005 totaled RUR 131.4 billion ($4.6 billion), •which represented 100% of TBH profits for these years.


AuditorsStatutoryaudit

In 2005 and 2006, most of the statutory audit work was carried •out as an integrated audit program by BDO Unicon.

In 2007, PricewaterhouseCoopers will carry out the statutory audit of eight key •subsidiaries; the balance of the statutory audit program will be carried out by FinExpertiza.

Groupaudit

PricewaterhouseCoopers acted as auditors of the TNK-BP group for 2005 •and 2006, and will continue in that role in 2007.

MAJOR PROJECTSTNK-BP INFORMATION SHEET 64

Major projects

65MAJOR PROJECTSTNK-BP INFORMATION SHEET

TNK-BP is developing over a dozen new major projects the realization of which will ensure the company’s sustainability over the long term. Many of these projects are located in remote areas with limited or no infrastructure and require significant investment of capital and technology. The more advanced are several large greenfield projects: the Uvat group of fields, the Bolshekhetsky project in West Siberia, and the Verchnechonskoye field in East Siberia.

Uvat group of fields Located in the Tyumen Region in the south of West Siberia •and covers 30,000 sq. km.

Estimated reserves in the range of approximately 1.3 billion barrels •(Kalchinskoye, Urnenskoye, Ust-Tegusskoye, Severo-Demianskoye and Polunyakhskoye fields).

Development of multiple fields across 17 leases stretching 230 km.•

Ongoing active exploration and appraisal program, which is expected •to provide greater resource definition by mid-2008.

Early oil is expected at 45,000 barrels per day by mid-2009.•

Plateau production in the first stage of commercial development is expected at •3-5 million tons of oil per annum (60-100 thousand barrels per day) by 2011-2012; full-scale plateau production could deliver 7 million tons per annum by 2015.

Verchnechonskoye fieldA large and complex field located in East Siberia about 1,000 km north of •Irkutsk in an area with limited oil industry infrastructure.

TNK-BP holds around 70% interest in Verkhnechonskneftegas, which is the •license holder for the development of the Verkhnechonskoye field. Rosneft is the other major shareholder.

66 MAJOR PROJECTSTNK-BP INFORMATION SHEET

Verkhnechonskoye has estimated probable and possible reserves of around 1.4 •billion barrels (approximately 200 million tons).

The project will be developed in three stages:•

Pilot project to gather high quality reservoir data and provide information to •confirm the full field development plan.

The early oil project will link the field with the East Siberia Pacific Ocean •pipeline, which is currently under construction by Transneft (expected to be commissioned by mid-2008) and install associated infrastructure. Target delivery for early oil production of an estimated 1-1.5 million tons per annum from the end of 2008. TNK-BP plans to be one of the first oil companies to supply crude to this new pipeline.

Full field development sanction in 2008 for potential ultimate plateau pro-•duction between 7-10 million tons per annum (140-200 thousand barrels per day) from around 2013.

Bolshekhetsky projectThe Bolshekhetsky project is located in the north of West Siberia, •in Krasnoyarsk-Taimyr Region above the Arctic Circle.

It comprises four undeveloped fields – Suzunskoye, Tagulskoye, •Russko-Rechenskoye, and Payakhskoye – located in the Bolshekhetskaya depression, in severe climatic conditions.

TNK-BP continues a focused appraisal and pilot production programme •in the Bolshekhetsky area in the Krasnoyarsk region. Seismic analysis and deep drilling have already doubled estimated resources to 100 million tons of oil (over 750 million barrels).

Construction activities at Suzunskoye field will begin in late 2007 and pilot •production is expected to start in 2009.

Plateau production is expected to start in 2013 at around 8-10 million tons •per annum (160-200 thousand barrels per day).


Kamennoye fieldThe Kamennoye field is part of the Nyagan group of fields located in Tyumen •Region and has estimated resources of 1.1 billion tons. Discovered some decades ago, it was considered “undevelopable” at the time.

TNK-BP is using leading technology such as 3D seismic reservoir modeling, •horizontal access, water injection and other enhanced recovery methods which has allowed us to re-evaluate the field’s potential.

Currently drilling and production is underway in the least complex segments.•

Possible plateau production at around 8-10 million tons per annum (160-200 •thousand barrels per day).

Viscous oil projects

TNK-BP’s undeveloped resources include significant quantities of viscous, •heavy oil. Its development is complicated by heavy crude properties.

The two major projects are the Russkoye and Vanyogan fields, which are both •currently undergoing appraisal.

The Russkoye field is located in the Yamal-Nenents Autonomous District •in West Siberia above the Arctic Circle; estimated reserves are over 2 billion barrels of oil.

TNK-BP is developing technology for heavy oil recovery and feasibility study •for the development of infrastructure at Russkoye. 2007 pilot activity includes drilling of two new wells with horizontal completions and well testing.

At the Vanyogan field sustained well testing over the two past years has proved •viscous oil production potential.

Several wells will be drilled as part of 2007 pilot activities at Vanyogan.•

COMMUNITY CONTRIBUTIONTNK-BP INFORMATION SHEET 68

Community contribution


In April 2007 a dedicated social investments division was created in TNK-BP. •It’s task is to coordinate all company’s social activities and ensure that social reporting is done according to international standards.

Work on the corporate principles of social responsibility is ongoing, •with all TNK-BP streams involved in the process.

In 2006 TNK-BP was rated among the top ten Russian companies in terms •of social responsibility by the International AccountAbility Institute of Social and Ethical Responsibility, an internationally respected think tank in this field.

The company is also participating in the first national rating of socially •responsible companies, the results of which will be announced later in 2007.

TNK-BP’s first audited social report prepared to international standards •of social reporting will be published in autumn 2007. It will describe the company’s policy on social investments and present evidence of TNK-BP’s sustainable economic, environmental and social development and address our key activities and operations in 2006.

Social investmentIn 2007 the company allocated around $150 million on external social •programs and around $94 million on social programs for staff.

This represents close to a 40% growth in spending on external social programs •on 2006. This growth is driven by the company’s expansion to new regions where, in line with its policy, TNK-BP assumes additional social responsibilities pro-rated with the scale of the company’s business in each specific region. TNK-BP is now one of Russia’s leading companies in terms of the level of social investments.

Major social investment in 2007:•

Preservation of St. Petersburg’s cultural heritage and restoration •of historical buildings through participation in two long-term programs: “Restoration of cultural heritage” and “St. Petersburg’s facades 2005-2007” ($33.5 million allocated in 2007).

Financing construction of Olympic sites in Sochi for 2014 Winter Olympic •games ($10 million).

70 COMMUNITY CONTRIBUTIONTNK-BP INFORMATION SHEET

Other important social programs include:•

Financing of a comprehensive program to prevent and treat hepatitis •and HIV;

Promoting healthy lifestyle and anti-drug campaigns;•

Support for the veterans of the Great Patriotic War and conflicts of recent •years;

Support for the families of servicemen killed in military conflicts;•

Support for vulnerable social groups. •

TNK-BP acted as a co-investor of the first business management school •in Russia, contributing $2 million to its construction in the Skolkovo District of the Moscow Region. The school is called the Moscow School of Management Skolkovo, and TNK-BP management has committed to share knowledge and experience with the school’s future students by giving lectures once the school is opened in 2008.

71COMMUNITY CONTRIBUTIONTNK-BP INFORMATION SHEET

The Life Line programIn December 2004, TNK-BP joined Life Line – a private donations program •designed to help children with serious diseases that require complex and expensive treatment. The Life Line program is organized and managed by Charities Aid Foundation (CAF Russia). To simplify the donations process, CAF Russia has developed a software that allows donations to be made online at employee’s workplaces. In 2006, TNK-BP employees donated over $70,000. This amount covered the treatment of 21 children registered with the Life Line program who suffer from various life-threatening heart conditions.

FAST FACTS TNK-BP INFORMATION SHEET 72

Fast facts

73COMMUNITY CONTRIBUTIONTNK-BP INFORMATION SHEET

1.7 million barrels of oil equivalent per day – average production in 2006 •(excluding share of Slavneft production).

129% reserves replacement ratio in 2006 under SEC life of field criteria. •

Proved reserves at 31 December 2006 (as independently audited •by DeGolyer and MacNaughton):

7.8 billion barrels of oil equivalent on an SEC life-of-field basis, or•

8.949 billion barrels of oil equivalent on an SPE basis.•

Organic CAPEX of $3.4 billion in 2007. •

TNK-BP Holding total dividends for 2006 at RUR 119.3 billion ($4.6 billion).•

Planned spending of $150 million on external social programs in 2007 – •a 37% increase over 2006.

TNK-BP International Ltd net revenues of $24.7 billion in 2006; net income •of $6.6 billion.

Acquisition of 50% share in Vanyoganneft JV from Occidental Petroleum •for $485 million, bringing TNK-BP’s ownership to 100% and adding some 1.4 billion barrels of oil equivalent resource potential.

Joint venture with Sibur Holding established in November 2006 for processing •of associated gas in the Nizhnevartovsk Region, commenced operations during 1Q 2007.

TNK-BP’s interest in the Kovykta gas project sold to Gazprom on commercial •terms, with an option to re-enter the project in future at blocking stake level under certain conditions. The sale formed part of a broader agreement between TNK-BP, Gazprom and BP to invest jointly in major long-term projects or swap assets in Russia and around the world. A working group has been established to work the details required between now and completion of the transaction.

Ryazan turnaround successfully completed on budget and slightly ahead of •schedule in April and May, without any serious health and safety violations.

74 FAST FACTSTNK-BP INFORMATION SHEET

Successful Eurobond issue completed in March – $1.3 billion offering •was five times oversubscribed.

Five new exploration licenses were won at tender, with another 12 secured •through acquisition.

Development of the Urnenskoye and Ust-Tegusskoye fields •(part of the Uvat group of fields) commenced. First press tour made to Tyumen and Urnenskoye field.

On 26 April 2007 TNK-BP completed the acquisition of close to 88% of voting •shares (66.16% of total share capital) interest in Severnoyeneftegas (SNG) from Russneft. SNG holds production licenses for two fields in the Novosibirsk region – Maloichskoe and Vostochno-Tarskoe. In 2005 SNG’s average daily production was 225 tons.

TNK-BP University Grants program inaugurated. •

Master of Geoscience degree program announced at the Tyumen State Oil and •Gas University with financial and academic support from TNK-BP. The British Royal Holloway University, which has been selected as the partner for the program, will assist the Tyumen University with structure, materials, and teaching technology.

TNK-BP Information Sheet

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