OREANDA-NEWS. July 01, 2009. With all the issues on the agenda being reviewed, the shareholders approved the Company’s annual report and annual accounting report, including profit and loss statements for 2008, reported the press-centre of Surgutneftegas.

The shareholders’ meeting declared the dividend payment for 2008 in the amount of RUR 1.326 per preferred share and RUR 0.6 per ordinary share.

The elected Board of Directors included S.A.Ananyev, V.L.Bogdanov, A.N.Bulanov, I.N.Gorbunov, V.E.Druchinin, V.P.Erokhin, N.I.Matveev, N.Ya.Medvedev, A.F.Rezyapov.

The shareholders’ meeting appointed the Auditing Committee consisting of 3 members and approved Rosexpertiza LLC as the Auditor of the Company for 2009. The meeting also resolved to approve transactions, which can be effected in future between Surgutneftegas and its affiliates as part of the Company’s ordinary business activities.

General Director reported on the 2008 results emphasizing that despite the dramatic change in prices, interest rates and the whole business environment "Surgutneftegas" continued to consistently fulfill its plans across the areas of its operations.

In 2008, "Surgutneftegas" accounted for 20% of exploratory drilling in the industry. Increment of C1 oil reserves reached RUR 105 mn tons, or 171% of the total oil produced.

Today, "Surgutneftegas" operates in three oil and gas bearing provinces – Western Siberia, the major oil and gas producer; Eastern Siberia, the growing oil and gas producing area, and the promising Timano-Pechora province.

The reporting year marked the beginning of the commercial production from the Talakanskoye oil field located in the Republic of Sakha (Yakutia).

At year-end 2008, the field’s operating well stock amounted to 84 wells, which produced almost 600,000 tons of oil. This year, the Company plans to produce 1.9 mn tons of oil in Eastern Siberia.

"Surgutneftegas" is leading the pack in terms of well construction and new fields development. The Company accounts for every fifth well constructed in the year under review. We provided for over 78% of development drilling and 70% of producing wells put on stream at new fields in Russia. In 2008, the Company’s investments in oil and gas production increased by 8.4% against the last year to RUR93.6 bn.

Associated oil gas utilization in 2008 went beyond 95%, electricity generation raised by 13% against the last year to about 2.8 bn kilowatt hours. In 2008, the Company processed 7.2 bn cub m of gas, produced 6.8 bn cub m of dry gas and about 600,000 tons of liquid hydrocarbons.

In the reporting year, "Surgutneftegas"increased oil processing output to 20.6 mn tons. Kirishinefteorgsintez refinery completely switched to production of high octane gasoline under Euro-4 standard and is in progress of preparatory works to produce diesel in line with modern European standards, and continues with implementing hydrocracker complex project.

The Company’s marketing divisions raised sales of refined products by almost 10%. "Surgutneftegas" proceeds with implementing environmental and social programs, participates in developing the territory of its operations. In 2008, the Company spent about RUR23 bn on financing environmental projects.

"Surgutneftegas" is among the leaders of oil and gas sector in terms of capital expenditures in nonproduction activity: in 2008 the Company accounted for 27% of the expenditures scope across the sector.

The year under review witnessed record high financial performance of Surgutneftegas for the last 15 years of its business as a joint stock company. Profit before tax increased by 55% to about RUR192 bn.

Favorable oil and gas price environment contributed to financials growth in 2008. At the same time, export duties witnessed an increase as twice as oil price growth, material resources, electricity and oil transportation tariffs raised. “Under these circumstances, stringent cost control is the main competitive factor. With that, the Company pays great attention to creating investment reserves and the last year proved that it is important to remain competitive and continue development in volatile economic situation”, noted Vladimir Bogdanov, OJSC "Surgutneftegas”" Director General.