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Wall Street Journal
December 31, 2002
Sibneft Leads

I read with interest the editorial "Crude Calculations," Dec. 18, regading the privatization auction for the sale of the Russian government's 74.95% stake in Slavneft. Your article noted that "Sibneft has recently tried to improve its image and woo investors," while "Yukos [has] learned that the only way to achieve real growth is through embracing Western-style corporate governance." In fact, it was Signeft that led the way in bringing Western-style corporate governance to Russia and Yukos that followed our lead.

Sibneft was the first Russian company to issue a Corporate Governance Charter in July 1998. The company was the first vertically integrted Russian oil company to issue its accounts audited to US GAAP, and has released five years of GAAP accounts. It was also the first Russian oil company to create a new business planning and budgeting system capable of evaluating investments on a field-by-field basis, thus improving transparency and investment effectiveness.

Our company works closely with financial analysts in order to help them fully access our performance on behalf of investors. We also regularly publish information and disclosures on our website, which one Western communications consultancy recently rated as Russia's best corporate site in terms of the quality of information provided.

Many analysts have noted that Sibneft is probably the only company capable of realizing the full potential of Slavneft. Sibneft leads the industry in reducing costs, boosting output, and achieving a substantial return on assets. With production growth of over 27% this year, we are the fastest growing oil company in Russia , ahead of Yukos.

Sibneft's transparency and its corporate governance achievements have been rewarded by the market, which values Sibneft shares at a higher price per barrel of both oil reserves and production, than any of our peers. The Wall Street Journal should recognize that Sibneft is ahead of the pack, not following in the footsteps of others.

Eugene M. Shvidler President and CEO, Sibneft Moscow

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