Welcome Adress to Participants

of FT Commodities Global Summit 2016

Lausanne, April 12, 2016

Chairman of the Management Board of Rosneft Oil Company

I. I. Sechin

Information herein has been prepared by the Company. The presented conclusions are based on the general information collected as of the date

hereof and can be amended without any additional notice. The Company relies on the information obtained from the sources which it deems

credible; however, it does not guarantee its accuracy or completeness.

These materials contain statements about future events and explanations representing a forecast of such events. Any assertion 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 our actual results, performance or achievements to be materially different from any future results, performance or achievements

expressed or implied by such forward-looking statements. We assume no obligations to update the forward-looking statements contained herein to

reflect actual results, changes in assumptions or changes in factors affecting such statements.

This presentation does not constitute an offer to sell, or any solicitation of any offer to subscribe for or purchase any securities. It is understood that

nothing in this report / presentation provides grounds for any contract or commitment whatsoever. The information herein should not for any

purpose be deemed complete, accurate or impartial. The information herein in subject to verification, final formatting and modification. The contents

hereof has not been verified by the Company. Accordingly, we did not and do not give on behalf of the Company, its shareholders, directors,

officers or employees or any other person, any representations or warranties, either explicitly expressed or implied, as to the accuracy,

completeness or objectivity of information or opinions contained in it. None of the directors of the Company, its shareholders, officers or employees

or any other persons accepts any liability for any loss of any kind that may arise from any use of this presentation or its contents or otherwise

arising in connection therewith.

Disclaimer

3

Oil & Petroleum Products Remain Largest Commodity Market

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

2001 2005 2008 2011 2015

$ trn.

Coal Gas Petroleum products Oil

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

2001 2005 2008 2011 2015

$ trn.

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

2001 2005 2008 2011 2015

$ trn.- 49%

2000 to 2011, value of global energy exports exceeded aggregate export of metals and food.

In 2015 the share of oil and petroleum products commodities markets reduced by only 10% despite sharp reduction in

prices

Energy export Export of metals Export of food products

Sources: UNCTAD; IMF

4

Oil remains the most important Commodity on financial

markets

Sources: CFTC; NYMEX; Bloomberg; calculation of B.Bernanke.

0

5

10

15

20

25

30

Oil Gold Crops Othermetals

$ bln. 2014 2015

20

40

60

80

100

120

80

90

100

110

120

130

09.2

01

4

11.2

01

4

01.2

01

5

03.2

01

5

05.2

01

5

07.2

01

5

09.2

01

5

11.2

01

5

01.2

01

6

03.2

01

6

S&P 500 Brent (right)

Jan 1, 2014. =100

High correlation in 2016 is due

to effect of the “third factor” –

global economy concerns

Average value of long positions on NYMEX market Brent and S&P 500 oil prices

5

Super-cycle’s raw materials prices were supported by weak

dollar

* - accepting oil price elasticity at dollar per unit rate.

Sources: US Bureau of Labor Statistics; Bloomberg; calculation of B.Bernanke and J.Hamilton

+20

-19

+67-55

0

20

40

60

80

100

120

Price increase2001-2011/12

Price declineJune 2014 - Dec 2015

$/bbl.

Dollar rate Other factors

0

20

40

60

80

100

120

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

$/bbl.

Brent Brent adjusted to CPI Brent adjusted to CPI and USD

$16

$22

$35

US inflation:

USD rate:

Other factors:

Share of dollar rate in oil price changes: calculation of

B.BernankeBrent oil prices

Weakening of dollar rate* complemented about 30% in oil price increase in 2002-2008.

According to calculations of B.Bernanke, the share of dollar rate in declining oil prices in 2014-15 also amounts to

about $20.

6

Volatility on oil market is significantly higher than on other

commodity and finance markets

Source: Bloomberg

In Q1 2016 oil price volatility exceeded volatility of S&P500 index 3 times.

Implied volatility of WTI (OVX) and S&P 500 (VIX) index

0

10

20

30

40

50

60

70

80

90

2013 2014 2015 2016

OVX VIX

7

Price drop leads to reduction of drilling and investments

Sources: Rosneft, World Energy Outlook 2013, World Energy Outlook 2015, JPMorgan

Volume of commissioning new fields and estimated volume of depletion to decline rate

Current increase of oil supply is caused by increased production at already existing fields

Delaying the launch of new projects can seriously affect supply in 3-5 years.

Reduction of capital investment also can lead to growth of the rate of depletion of existing fields, as the cost of

increase of oil recovery rate and drilling additional wells on existing fields lead to their faster depletion.

0

2

4

6

8

10

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16E

mln.bbl/day

OPEC non-OPEC US tight oil Canada oil sands Depletion

Even short-term crisis in 2009 resulted in the

accelerated decline rate and reduction in the

number of commissioning new fields

Expected decline in

commissioning new fields

in 2016

8

Current surplus and threat of deficit around 2020

Sources: EIA, IEA, OPEC

IEA expects stable deficit of supply for 4 years after reaching balance in 2017.

Consensus global demand growth rate expected to stabilize at 1,5% /year.

Forecast on Balance between LHC supply and demand in

IEA reviewGlobal oil demand growth rates

2%

3%

4%

5%

6%

7%

8%

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

IEA

OPEC

EIA

forecast

-1,5

-1,0

-0,5

0,0

0,5

1,0

1,5

2,0

2,5

90

92

94

96

98

100

102

104

2015 2016 2017 2018 2019 2020 2021

mln. bbl/daymln. bbl/day

Difference (2)-(1) (right)

Demand (1)

Supply (2)

9Source:: Rosneft based on EIA data

If oil prices remain at the level of $35/bbl, then year-end 2016 USA shale production is estimated to be 3,7 mln bbl/day

only

Stabilization of shale production in the USA requires an oil price of not less than $50/bbl.

2,0

2,5

3,0

3,5

4,0

4,5

5,0

5,5

6,0

01.2

01

4

05.2

01

4

09.2

01

4

01.2

01

5

05.2

01

5

09.2

01

5

01.2

01

6

05.2

01

6

09.2

01

6

01.2

01

7

05.2

01

7

09.2

01

7

01.2

01

8

05.2

01

8

09.2

01

8

Actural production

Expected production

mln.bbl/dayForecast

$35/bbl.

$45/bbl.

Annual average production on the US shale formations

in 2016 Average monthly production on the US shale formations

$50/bbl.

$55/bbl.

$60/bbl.

5,30

4,40 4,40 4,50 4,50 4,50

0,90 0,90 0,90 0,80 0,80

0

1

2

3

4

5

6

2015 2016($35/bbl)

2016($40/bbl)

2016($45/bbl)

2016($50/bbl)

2016($55/bbl)

Actual Forecast on production Reduction

mln.bbl/day

Prospects of shale oil production in the USA for 2016-2018

10

Technology development leads to reduced costs and

increased performance

Sources: EIA; IHS

Technology improvements related to drillingTechnology improvements related to well

completion

Increased

performanceDecreased cost

Increased

performance

Decreased

costs

• Longer laterals

(nearly a three-fold

increase over the

past decade )

• Better geosteering

to stay in higher

producing areas

• Increased

drilling rates

• Minimal casing

and liner

• Multi-pad drilling

• Increased amount

of proppant –

superfracs

• Number and

position of frack

stages

• Shift to Hybrid

(cross-link and slick

water) fluid systems

• Faster fracking

operations

• Lower proppant

prices

11

Problems of assessing historical data further complicate

forecasting

Source: Institute for Energy and Finance (IEF) based on EIA data

Energy agencies in their 2015 reviews failed to measure the size of the global market imbalance, and merely updated

their assessments to the price levels observed several months ago

USA crude oil production at the end of 2016 was revised during the last 5 months by 10%. Assessments of «actuals»

were also revised.

Forecast and assessment of misbalance (demand

minus supply) in 2015 in STEO reviews and Brent

prices

Forecasts on crude oil production in the USA in

monthly EIA reviews, Nov 15 – Mar 16

20

30

40

50

60

70

80

90

100

110

-2,5

-2,0

-1,5

-1,0

-0,5

0,0

01 2

01

5

02 2

015

03 2

01

5

04 2

01

5

05 2

01

5

06 2

01

5

07 2

01

5

08 2

01

5

09 2

01

5

10 2

01

5

11 2

01

5

12 2

01

5

01 2

01

6

02 2

016

03 2

01

6

$/bbl.mln.bbl/day

Date of STEO issue

Imbalance in 2015

Brenth - 4 months lag (right)

8,92

8,84

8,51

8,34

8,1

8,3

8,5

8,7

8,9

9,1

9,3

9,5

09 2

01

5

10 2

01

5

11 2

01

5

12 2

01

5

01 2

01

6

02 2

01

6

03 2

01

6

04 2

01

6

05 2

01

6

06 2

01

6

07 2

01

6

08 2

01

6

09 2

01

6

10 2

01

6

11 2

01

6

12 2

01

6

mln.bbl/day

STEO, Nov.15

STEO, Dec.15

STEO, Jan.16

STEO, Feb.16

STEO, March.16

Actual data

12.04.2016

26/1 Sofiyskaya Embankment, Moscow

117997 Russia

Tel: +7 (499) 517-88-99

Fax: +7 (499) 517-72-35

E-mail:postman@rosneft.ru

Contacts

Thank you for your attention!