Bashneft released its preliminary operating results for Q2 2015.

• The average daily oil production reached maximum level since 1993, i.e. 53.1 thousand tonnes.
• Oil production at brownfields added 2.5% year-on-year New assets in Timan-Pechora and Western Siberia provided 14.6% of oil production.
• Output of light oil products increased to 68.5%, refinery yield-up to 86.8%.
• Production of vacuum gasoil was completely terminated.
• 86.2% of gasoline and 99.8% of diesel fuel meet Euro 5 standard.

Oil production in Q2 2015 was 4,831 thousand tonnes, which is by10.4% more than in Q2 2014. Strong growth of oil production in Q2 2015 was driven by 2,5% increase in production at brownfields — mainly due to commissioning of new wells and highly efficient geological and engineering operations in Bashkortostan.

The R. Trebs and A. Titov fields in the Nenets Autonomous District and the Sorovskoe field in Khanty-Mansi Autonomous District, which provided 14.6% of the Company’s total production in Q2 2015, played a significant role in the production increase.

Thus, in Q2 2015, Bashneft-Polyus LLC increased the production by 67.9% (up to 310 thousand tonnes) compared to Q2 2014, particularly due to the active development of the A.Titov field upon the test commissioning of the interfiled pipeline with length of 43 km to the central production facility (CPF) of the R. Trebs field.

In Q2 2015, Burneftegaz LLC produced 397 thousand tonnes of oil, which is by 140% higher than in the same period in 2014. The oil production increase was stipulated by the effective implementation of the production drilling program at the Sorovskoe field, in particular, by commissioning of 5 horizontal wells with average output of about 400 tonnes per day.

Bashneft produced 9,540 thousand tonnes for 6M 2015, which is by 12.4% higher than in the same period of 2014. H1 2015 results showed the 3.6% growth of production at the brownfields compared to the corresponding period last year.

In Q2 2015, Bashneft Refinery Complex processed 4,478 thousand tonnes of crude oil, which is by 18.3% less than in Q2 2014. Processing volume amounted to 9,193 thousand tonnes for 6M 2015, which is by14.9% less than in H1 2014. This level of processing is a scheduled one and in the current macroeconomic situation and the existing tax environment allows maximizing the value of the commodity basket by increasing the output of light petroleum products.

Owing to the processing reduction, in Q2 2015 the commodity output volume decreased by 19.3% (to 4,127 thousand tonnes) compared to Q2 2014; and the results of 6M 2015 showed the decrease by 14.5% (to 8,512 thousand tonnes). Moreover, the Company greatly improved the structure of the commodity basket due to the significant reduction of the cheap dark petroleum oil production. Thus, the fuel oil output in Q2 of the current year decreased by 14% compared to Q2 2014 (up to 577 thousand tonnes), and by 16.7% (to 1,283 thousand tonnes) for 6M 2015. In addition, in Q2 of the current year the vacuum gas oil production was completely terminated.

In Q2 2015, light oil products output increased to 68.5% compared to 62.3% in Q2 2014, and the results of 6M 2015 showed 68.5% compared to 60.5% in H1 last year.

In spite of processing reduction, for 6 months of 2015 the gasolines production slightly decreased by 1.7% (to 2,388 thousand tonnes), diesel fuel production decreased by 2.3% (to 3,662 thousand tonnes) compared to the corresponding period in 2014. Moreover, the share of diesel fuels of Euro 5 standard in H1 of the current year increased up to 99.8% compared to 32.5% for 6M 2014. The share of gasoline of Euro 5 standard in H1 of the current year was 85%, i.e. there is no changes compared to H1 2014.

A significant increase in the share of light oil products and their quality improvement became possible owing to the completion of a number of projects for Bashneft Refinery Complex modernization in 2014, including the commissioning of a new hydrogen production unit.

PRELIMINARY OPERATING RESULTS FOR H1 2015

*- LLC Burneftegaz as from March 27, 2014

OIL PRODUCTION BY OIL AND GAS PROVINCE

* Bashneft-Dobycha LLC
** Bashneft-Polyus LLC
*** Bashneft-Dobycha LLC and Burneftegas LLC