OAO Novatek, and the International Finance Corporation (IFC), the private financing arm of the World Bank, have reached a preliminary agreement on a long-term loan up to $120 million for a term of at least 7 years. The loan is expected to partially finance development of the Yurkharovskoye field and will be arranged by the IFC and syndicated to international banks under an A/B loan structure.

According to Novatek’s CFO Mr. Mark Gyetvay, "The Company has worked very closely with the IFC over the past year to structure a loan facility with repayment terms based on domestic natural gas sales. The announcement of this loan agreement signifies to the financial community that Novatek fully endorses IFC's environmental and social policies and guidelines, international corporate governance, and financial transparency standards”.

Initially discovered in 1970, the Yurkharovskoye natural gas and gas condensate field is located within the Polar Circle to the South-East of the Tazovskiy peninsula and is the northern most field to begin operations in Post-Soviet Russia. With proven and probable reserves of 369 bcm of natural gas according to DeGolyer and MacNaughton, the field’s development drilling started in the second quarter of 2002 and commercial production began in the first quarter of 2003. In July 2004, the Company completed the first of three phases of development at the Yurkharovskoye field increasing production capacity to 9 billion cubic meters (bcm) of natural gas per year. The Company forecasts that natural gas production is planned to reach 27 bcm per annum at full field development. The field is operated by Novatek’s wholly-owned subsidiary OOO Yurkharovneftegas.