Today Bashneft Group, including JSOC Bashneft and its subsidiaries and affiliates, has published its audited consolidated financial results prepared in accordance with International Financial Reporting Standards (IFRS) for the 4th quarter and the year ended 31 December 2011.

2011 saw Bashneft achieve the best financial results in its history. Net income attributable to shareholders of the parent company totalled US$ 1,696 million in 2011, which exceeds the 2010 level by 18.7%. EBITDA increased by 16.8% to US$ 3,192 million. The Group’s sales revenue increased in 2011 by 41.4% to US$ 16,549 million. The main factors that contributed to the growth in revenue, EBITDA and net income were an increase in oil production, a rise in world prices for oil and petroleum products, a growth in product sales in the premium market sectors.

The amount of the Company’s net cash from operations increased in 2011 by 59.1% compared with 2010 and totalled US$ 2,228 million. The growth in operating cash flow in 2011 enabled Bashneft to increase its capital expenditures by 73% to US$ 851 million and to reduce its net debt by 16.9% to US$ 1,902 million.

“Last year’s financial results demonstrate that the Company is successfully implementing its development strategy. We considerably increased the number of our operating regions, ensured a growth in production and oil reserves, continued to upgrade the refineries and increased the volume of petroleum product sales via our own retail network,” pointed out the President of JSOC Bashneft Alexander Korsik. “Improved operational efficiency in all areas of business resulted in a considerable growth in operating cash flow by almost 60%, which provides the Company with more opportunities for development in the interests of our shareholders.”

The Company has now been showing consistent increases in crude oil production for ten consecutive quarters. In 2011, average daily oil output rose by 6.8% compared with 2010 to a level of 302 thousand barrels/day, which is the best result over the past 14 years. In 2011, Bashneft produced 15,106 thousand tonnes of oil thus reaching the optimal level of oil production at existing fields which the Company plans to maintain over the next several years.

Crude oil refining capacity utilization remained on the optimal level. In 2011, the Company refined 21,062 thousand tonnes of oil, which is 0.6% less than in 2010. Refining depth amounted to 85.9% and light oil output totalled 59.9%.

In 2011, sales volumes of oil refining and petrochemical products rose by 2.4% and totalled 19,349 thousand tonnes. Following the strategy of expanding distribution channels providing access to consumers, Bashneft continued strengthening its presence in the retail sector. Thus, in 2011, the Company increased the retail sales volume by 66.1% to 1,023 thousand tonnes.

MAIN FINANCIAL AND OPERATING RESULTS IN 2011