RUSSIAN OIL AND GAS RESERVES Ray Leonard YUKOS Uppsala, May 22, 2001

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RUSSIAN OIL AND GAS RESERVES

Ray Leonard

YUKOS

Uppsala, May 22, 2001

Factors to consider

• Existing Reserves

• Production Capability

• Export Capability

• Future Discoveries

New outlook for oil reserves in Russia and Middle East: reality or political

numbers game?

360

634

0

100

200

300

400

500

600

700

World

Ener

gy

Council (

1998

)

Prove

d (inte

rnat

.

audite

d 99-

00

)

rese

rves

of T

op 4*

46.540.2

81.8

93

0

10

20

30

40

50

60

70

80

90

100

Russia & Russian companies’oil reserves

1988 Middle East (OPEC) oil reserves leap

Prove

d (A+B

+C1)

rese

rves

of T

op

10**

Prove

d (A+B

+C1)

and 5

0% o

f C2

rese

rves

of T

op 10*

*

19881987

(bn bbl) (bn bbl)

* LUK, YUKOS, SurgutNG,TNK ** 4 with Onako + Sidanco, Rosneft, Tatneft,Sibneft,Slavneft, Bashneft

Oil Equivalent Reserves

0

100

200

300

400

500

600

700

800

MiddleEast

Russia andCaspian

OtherOPEC

Non OPECexporters

OilGasBOE total

RUSSIAN AND CASPIAN PRODUCTION COMPARED TO WORLD PRODUCTIONRUSSIAN AND CASPIAN PRODUCTION COMPARED TO WORLD PRODUCTION

10,8

8,8

5,86,9

10,5

0,7

1,1

0,9

0,8

3,519,3

16,5

10,89,4

15,2

0,0

2,0

4,0

6,0

8,0

10,0

12,0

14,0

16,0

1986 1991 1996 2001 2010

mm

bo

/d

0,0

5,0

10,0

15,0

20,0

25,0

% W

orl

d P

rod

uct

ion

CaspianRussian% WORLD Production

TCF GAS

2,93

9

22,5919,06 20,47 20,47

1,69

3,74

4,87

1,94

3,885,82

1,06

2,121,41

2,82

0,07

0

5

10

15

20

25

30

35

1970 1980 1990 2000 2010 2020

RUSSIA CURRENT PRODUCTION AREAS CENTRAL ASIA EAST SIBERIA RUSSIAN OFFSHORE

120,000

140,000

160,000

180,000

200,000

220,000

2000 2001 2002

50 58 70

YUKOS PRODUCTION

40

50

60

70

80

90

100

110

1986 1987 19881989 1990 1991 19921993 1994 1995 19961997 1998 1999 2000 2001 2002

Yearl

y P

rod

ucti

on

, million

ton

s

YUKOS PRODUCTION

Average daily rate per new well by Russian oil companies in 2001

75,4

58,0

27,724,2

22,3 21,319,7 18,5

12,8

8,3

4,0

22,4

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

t / d

YUKOSSibneft

ONAKO

SIDANCO

Lukoil

TNK

Slavneft

Rosneft

Surgutneftegas

Bashneft

Tatneft

Total

FSU oil is competitive on the world market

Reserves,bln.bbl

* - finding, development and production excl. transportation and taxes (CERA,Sept. 2001)

100

16

12

8

4

200 300 400 500 600 700

$/bbl

Iraq

Ku

wa

it

Iran

Saudi Arabia

UA

E

US

A,

stri

pp

er

we

lls

Wes

tern

Sib

eria

Ven

ezu

ela

(x-h

ea

vy)

Oth

er

La

tin

Am

eri

ca

Nig

eri

a

Alg

eria B

ras

il

No

rth

Sea

Wes

tern

Ca

na

da

Me

xic

o

Ch

ina

(o

ns

ho

re)

Ind

on

esi

a

USA, Mexican Gulf (deep)

US

A, A

lask

a

USA onshore

Angola

Kaz

ak

hst

an

Russia

Oth

er

Worldwide full-cycle upstream cost* of oil in 2001

800

Best Companies**

** - 2001 finding, development and production cost –3.7 $/bbl,

Including Government expenses

Ven

ezu

ela

(co

nv

)

OIL EXPORT ROUTES

GAS EXPORT ROUTES

Future Potential Reserves

0

50

100

150

200

250

Russia andCaspian

MiddleEast

DeepWater

OilGasTotal BOE

EXPLORATION MATURITYEXPLORATION MATURITY

Potential of Russian Shelf

• Seven major basins, each equal to or larger than the Gulf of Mexico or the North Sea

• Extensions of producing trends in Pechora Sea, Kara Sea and Sea of Okhotsk

• Thick sedimentary basins with all elements for hydrocarbon accumulations in other Arctic and Pacific Basins

RU

SUPPLY AND DEMAND 2000-2010

20 MMBOD22 MMBOD

15 MMBOD 16 MMBOD

US CONSUMPTION

8,0 7,0

6,05,0

2,54,0

2,5 3,0

2,01,0

1,0

0

5

10

15

20

25

2000 2010

mm

bo

d

OTHER

RUSSIA+CASPIAN

MIDDLE EAST

AFRICA

WEST HEMISPHERE

USA

W.EUROPE CONSUMPTION

7,05,0

3,04,0

3,0 4,0

2,0 3,0

0

4

8

12

16

2000 2010

mm

bo

d

RUSSIA+CASPIAN

AFRICA

MIDDLE EAST

EUROPE

EAST ASIA CONSUMPTION

6,0 5,0

11,016,0

1,02,0

1,0

0

5

10

15

20

25

30

2000 2010

mm

bo

d

OTHER

RUSSIA+CASPIAN

AFRICA

MIDDLE EAST

EAST ASIA

18 MMBOD

24 MMBOD

CONCLUSIONS

• Russian oil reserves are probably in the range of 90-105 Billion barrels

• These reserves will be capable of sustaining an additional 35% increase over current levels (7.5 MMBOD) for an extended period

• New export oil and gas pipelines will allow additional Caspian oil to be marketed and supply Russian oil and gas to the Far East

• A combination of mature, developing and frontier exploration can add an estimated 40-50 billion barrels and larger amounts of natural gas

• Russian and Caspian oil exports will reach the level of one half of the Middle East by 2010

• Russian gas reserves allow a significant increase from current production and will assume increasing importance as world production eventually peaks and begins to decline

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