Rosneft reported its consolidated financial results in accordance with US GAAP for the first three months of 2006, reflecting the period ending March 31, 2006.

Rosneft's total revenues for the first quarter of 2006 increased to USD 7.516 billion, up from USD 4.363 billion in the first quarter of 2005. Net income increased to USD 802 million from USD 724 million.

EBITDA increased by 24% to USD 1.917 billion from USD 1.545 billion. The Company was able to maintain its industry leading position with EBITDA margin at 25.5%, despite significantly increased mineral extraction tax and export duties, as well as real appreciation of the ruble by 8.7%.

Return on average capital employed (ROACE), the key performance indicator of the Company's operations, increased from 19.7% to 22.9%.

The Company's net debt remained practically unchanged at USD 11.144 billion. At the same time, improvement in capital structure led to a reduction in gearing to 53%. In 2004, gearing was 79%.

In the first quarter of 2006, the Company made significant progress in maximizing cash flows. The Company's cashflow from operations stood at USD 1.413 billion, as opposed to USD (-52) million for the same period in 2005.

Capital expenditures increased to USD 848 million from USD 312 million in the first quarter of 2005. This increase was primarily the result of acquiring new licenses at a cost of USD 261 million, as well as intensified drilling activity in Yuganskneftegaz.

In the first quarter of 2006, Rosneft acquired a 30.24% stake in OJSC Rosneft-Tuapsenefteprodukt, a strategically located transshipment terminal for oil and oil products on the Black Sea, increasing its ownership in this enterprise to 89.93% of ordinary shares.

Despite the harsh weather conditions during the winter of 2006, Rosneft increased oil production in the first quarter of 2006 by 7%, delivering the strongest organic growth in the Russian oil industry.

From January-March 2006, the Company produced 19.03 million tons of oil, up from 17.79 million tons for the same period last year. Severnaya Neft saw the greatest increase among the subsidiaries, increasing production by 28%. Yuganskneftegaz increased crude production by 7%.

Rosneft's audited US GAAP financial statements for the first quarter of 2006 and previous periods are available for download at www.rosneft.com.

These materials contain statements about future events and expectations, which are forward-looking statements.  Any statement contained in these materials that is not a statement of historical fact is a forward-looking statement, and may involve known and unknown risks, uncertainties and other facts which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  We do not undertake to update the information contained herein to reflect actual results, changes to initial assumptions or factors affecting the forward-looking statements.