Updated July 4, 2008.

   CDU TEK (State Enterprise "Central Dispatching Department of Fuel Energy Complex") has investigated a situation at the oil extraction

market. Eight largest oil companies took part in the research.

Researchers tried to find out, how daily oil extraction in each company had changed within January-June, 2008 period as compared to the analogical period last year.

   Results were rather surprising: daily oil extraction of five from eight companies has fallen as compared to last year, and only three companies have shown growth of barrels extracted. Overall extraction volume of oil and gas condensate in Russia went by 0,4% down within first half-year as compared to the analogical period last year and totaled 9,756 million barrels per day. Thus, in early year it was extracted by 0,4% of raw material more as compared to 2Q.

Special ists assert that there

is a tendency of oil extraction reduction.

The reasons are as follows: first, old fields' depletion in Western Siberia; second, investments' lack in new regions of oil extraction.

   Tax deductions promised in 2009 can partly change a situation. As said Troika Dialog analyst Valery Nesterov, one could expect oil extraction growth by around 2,7% in 2009. By the way, he relates this to promised tax deduction exactly.

   Rosneft, Tatneft and Russneft are among the companies with oil extraction growth.

As compared to last year, Rosneft growth totaled 24,8%, Tatneft – 1,1% and Russneft – 1,5%. Such Rosneft indices are explained by Yukos assets purchase in 2007.

Tatneft improved its results due to tax cuts by MET (Mining Extraction Tax) for exhausted deposits the company had received in early 2007.

   According to Otkrutie Financial Company analyst Natalia Milchakova, Lukoil has a positive dynamics as well: within the half-year its extraction level went down, but in 2Q it had stabilized at 1Q level.

According to her opinion, in 3Q the company demonstrates growth due to Yuzhno Khylchuyu field launch in Timan Pechora province.

   Within first half-year oil extraction level of Surgutneftegaz and Gazprom Neft companies has gone by 5,1% and 5,3% down respectively as compared to the analogical period last year, and, as analysts say, one should not expect situation improvements here, at least in the nearest future. In fact, now these companies need new licenses to large deposits, but no one can grant them.

    The authority representatives reassure.

The Ministry of Energy deputy head Anatoly Yanovsky declared that in 2008 one expected oil extraction growth at around 1% volume, and in 2009 small growth would continue. Moreover, he reported that his department presented the Ministry of Economic Development and Trade a three-year forecast concerning oil extraction in Russia by 2011.

However, analysts' forecasts are not as optimistic as officials have.

They consider that current year oil extraction indices in Russia remain at the last year level at best. Whose forecast realizes we will see in 2009.