Actuality January 16, 2008

Tatneft has confirmed resources in one of its foreign projects, Syrian unit ? 27. Predicted oil production on class ?1 from the field makes about 6 mln tones of oil that can provide about 300 thousand tones of production a year.

Taking into account that fields of the company on Republic Tatarstan territory are exhausted, even the small growth will be very opportunely for Tatneft, analysts say.

The main region of Tatneft activity is Republic Tatarstan where the largest Romashkinsky field of the company is situated.

There are also beds of pitch mineral of volume under 7 billion tones which Tatneft is going to develop together with Shell. The present extraction of the company makes 25,7 mln tons of oil a year, and, according to analysts, it is possible to rise production activity only by the means of projects outside the republic: in the Ulyanovsk and Samara regions, Nenets Autonomous Area. Tatneft renders services for Iran, Vietnam, Oman and Saudi Arabia, has contacts

for exploration and production in Libya and Syria.

The production sharing contract on the Syrian unit ? 27 was signed on March, 2005.

For project carrying out Tatneft on a par with the Syrian oil company created joint venture.

The unit consists of two districts in the southeast of Syria in the Al-bu-Kamal region of Dejr-ez-Zor province that is on the border with Iraq.

The contract presupposes carrying out of exploration works within seven years, the period of development and production activity – 25 years.

Tatneft planned to invest $26,1 mln in the project, thereby $7 mln – within the first three years, the next two years – $6,3 mln, and then remaining $12,8 mln.

According to the calculations made by institute TatNIPIneft, predicted oil production of the unit on class ?1 can make about 6 mln tons of oil, as it is said in the response of Raisa Hisamova, the chief geologist, deputy general director of Tatneft.

In the letter it is emphasized, that first well drilling is planned to start on February, 2008.

As it was reported earlier, six exploratory wells drilled.

In Libya Tatneft works in four fields according to production sharing agreement, extraction on them has not started yet.

The oil production cost in Libya is about $1,5-2 for barrel, it is said in the letter.

It is also emphasized in it, that the company could make a considerable contribution to the process of development of a deposit and the growth of oil extraction in Iraq as the situation in the region becomes stable.

Tatneft proved reserves, according to Miller and Lents, at the beginning of 2007 were equal 5,912 bln barrels of oil and condensed fluid (806 mln tons). According to the results of 2007 the growth of resources made 34 mln tons that exceeds the present extraction. For ten months outside the Republic Tatarstan has been produced 152 thousand tons of oil, in 2008 this index is planned to bring up to more than 300 thousand tons. Tatneft is provided with resources for 30 years. If the company develops the Syrian project with average rate, it will yield about 200 thousand tons of production annually, if more actively, it will yield about 300 thousand tons.

Timur Hajrullin from Investment Group AntantaPioglobal says that unit ? 27 resources will yield insignificant investment in Tatneft production.

It is much more important, that the company managed to consolidate in the region where it pretend to new contracts, the analyst says. He adds that resources of 6 mln tons on class ?1 will bring the company $100-150 mln.