Oil Company LUKOIL Leonid Fedun Vice President 2001 Oil and Gas Conference New Horizons London June 7-8, 2001

II. Launching Pad for Future Growth

Strong Reserve Growth Proven Oil & Gas Reserves BN BOE Proven Oil & Gas Reserves Shift MM BOE Proven reserves up by 70% since 1995 Reserve growth has come from –Continued exploration –Targeted acquisitions Reserve base continues to shift out of the higher cost Western Siberia –Accounts for only 53% of proven reserves today –International reserves account for nearly 20% of total proven reserves* * This includes estimated proven reserves in West Qurna

RussiaInternational Consistent Production Growth Crude production up every year since % increase over 5 year period Annualized CAGR of 7.9% International production currently accounts for only 3% of total production But growth rate is very high Production outside of Russia has more than tripled from % 2.0% 1.0% 0.0% Int’l production as a % of LUKOIL’s total production LUKOIL’s Production ‘000 BBL/day

Improving Upstream Efficiencies Marked improvement in operational efficiencies over the last 5 years Average flow rates up by 15% in West Siberia Efficiencies achieved through -Shut in of marginal wells -Continuing shift to higher quality reservoirs -Increased application of new technologies MM BBL Oil Production Traditional Technologies New Technologies Average Daily Flow Rate (W. Siberia) BBL/day

Strong Growth in Refining RussiaInternational Refining output is up sharply 70% increase since 1995 International expansion has been key driver of our refining growth -Accounts for 2/3 of our growth over the last five years -Today accounts for nearly 40% of our refining throughput Refining runs ‘000 BBL/day 30.0% 20.0% 10.0% 0.0% Int’l refining as a % of LUKOIL’s total production

International Downstream Assets LUKOIL has built a leading position in R&M in South Eastern Europe LUKOIL’s Primary European Refining Assets RefineryCapacityProductionUtilizationOwnership MMTY % Petrotel (Romania) %51.00% Neftochim (Bulgaria) %58.00% Odessa Refinery Plant (Ukraine) %51.90% LUKOIL’s Primary Refining Assets Operating Data

Advantaged International Assets Strategically advantaged refineries low-cost crude supply able to sell product to export markets – Strong regional refining margins projected through 2002 Cost savings being achieved through refinery optimization Upgrading underway to meet new EU specifications Mediterranean Refining Margins E Urals Price E Morgan Stanley estimates

Management of International Operations Upstream - LUKOIL Overseas Holding: Moscow based Headed by Andrei Kuzyaev Manages upstream projects outside of Russia Downstream - LUKOIL Europe Holding London based Headed by Ralif Safin Manages European downstream assets LUKOIL Overseas Holding (London - Moscow) LUKOIL Europe Holding (London - Moscow) Safin OAO LUKOIL Kazakhstan Iraq European R&M USA R&M Caspian

World Class Reserves and Production 2000 Reserves (Billion BOE) 2000 Production (M BOE/d) Source: Company data LUKOIL ranks as a world-class company in terms of reserves and production Our expansion strategy will deliver greater international diversification on par with other oil majors

Strong Financial Growth months, ended June 30 US$ MM Total revenues Income before taxation Net income Cash and marketable securities Financial debt Total assets Net cash provided by operating activities (before changes in the working capital) Operating profit (as of December 31/June 30) 6,6197,3766,2462,890 (510)1, , , ,735 1,0621, , ,0742,4972,156 9,64312,503 2, ,10214,634 1,4261,688235

Monitoring Key Ratios to Maximize Efficiency Return on sales Return on equity Sales on assets ROACE Net debt to net debt plus equity Return on assets All data shown as %, unless otherwise noted months, ended June Earnings per share, in US dollars

Rational Deployment of Capital High rates of reinvestment are ensuring continued growth Special emphasis placed on R&M investments over last three years up by 35% targeted at balancing production and refining capacity Annual Capital Expenditures US$ MM

Proposed Dividend Payout and Share Swap LUKOIL’s dividend payout has grown steadily over the last four years The proposed share swap will benefit all shareholders Strong recent performance in the pref shares Simplify share structure More equitable distribution of future dividends LUKOIL Share Price Performance Last Twelve Months, US$ per share LUKOIL Historical Dividend Payments US$ per share

II. Growth and Efficiency Strategic Overview

Upstream Strategy - Potential and Efficiency Growth Continue steady production growth –Selective development of existing reserves –Opportunistic acquisitions Lower production costs –Improve efficiencies in existing operations –Production expansion in lower cost regions (Timan Pechora, Caspian and Middle East) Strengthen netbacks: Shifting production will... – lower transportation costs – increase proportion of sales in international market – improve quality of crude

Sustainable Growth Strategies Prospective Growth of Oil Production Timan Pechora MM tons of oil Е MM toe European Russia MM tons of oil Е MM toe Western Siberia MM tons of oil Е MM toe; bn cubic m of gas Caspian region MM tons of oil 2010Е - 15 MM toe 2015Е MM toe Iraq 2010Е - 15 MM tons of oil 2015Е MM toe

Downstream Strategy - Open New Markets Expansion into Central and South Eastern Europe R&M Exploit advantage as the low-cost crude supplier to region Capture strong Mediterranean refining margins Benefit from projected demand growth in region Improve efficiencies through optimising operations among our regional refining assets

Global Strategies: LUKOIL International Operations LUKOIL is active today in more than 20 countries Our main strategic assets are situated in Western Siberia Timan Pechora The Caspian Basin S.E. Europe N.E. United States LUKOIL’s most recent discovery in the Yamal region of Siberia will position us to become a major gas exporter LUKOIL’s Principal Areas of Operation

Global Strategies: LUKOIL’s Regional Expansion LUKOIL is rapidly expanding its downstream and upstream operations into neighboring regions Upstream: Caspian Kazakhstan Middle East Downstream: Central Europe Atlantic Basin LUKOIL is poised to become Russia’s first truly international oil major Downstream: Expansion into Central Europe and Atlantic Basin Upstream: Expansion into Caspian Kazakhstan and Middle East

Global Strategies: Why Expand Beyond Russia? Reduce our exposure to “single market risk” Exploit competitive advantages –Low cost crude supplier –Superior knowledge of markets and geology Shift production to lower cost reserves Expand R&M business in markets with higher product prices Capture margins further down value chain in markets supplied by our crude

Global Strategies: New Markets Expansion into Atlantic Basin Marketing Region will increasingly become net product importer Upgrade our export-oriented refining assets to deliver to this market Secure a market for future Timan Pechora production Take market share from declining, higher-cost North Sea production – 2 MM BBL/day decline by MM BBL/ day decline in 2010 North Sea Production MM BBL/day

Corporate Growth: Setting and Achieving Targets Not less than 15% To 600, ,000 BBL/day To 300,000 BBL/day Lower than global average US$ $20/BBL US$3.5 BN US$2.5-3 BN p.a % of net income Crude Oil Production Domestic Refining International Refining Cost Control Sales Net Income Capital Investment Dividends

Creating Relative Value Among Peers Leading the Way in Corporate Standards Commitment to upholding international corporate governance and transparency standards Progressive dividend policy Upholding minority shareholder rights – Shareholder rights charter High-caliber international management team and ethical standards Participation in educational and philanthropic programs International sponsorship and brand-building

Predictability and Accountability Delivering for the Investment Community LUKOIL has embarked on a regular process of reporting financial and operating results to the international financial community, which will include: – Interim publishing of US GAAP financial statements – By press release and over the web – Quarterly analyst conference calls for discussion of results – Semi-annual roadshows for discussions with investment community – Improved investor relations web site

LUKOIL’s Competitive Advantages Russia’s most balanced integrated oil company – Growing downstream presence provides cushion from downward oil price movements Superior asset base – Growing geographical diversification International experience unique among peers – International mergers and acquisitions expertise – Shares are legitimate acquisition currency Strategic foothold in the North American downstream market Financial discipline and reporting standards to judge opportunities according to strict strategic and financial return standards

Crude Oil Production % of Russia’s total Crude Oil Export Sales % of Russia’s total Sustainable Production Growth Production growth well above the Russian average –Nearly a quarter of Russia’s 2000 production –Sustainable growth since the beginning of privatization (1995) Sustainable growth of the share in Russian crude exports

Macroconditions for Growth –Economic growth. GDP growth tendency is not less than 3-4% p.a. Budget surplus. Growth of gold and currency reserves. Improved solvency and tax collection –Favorable market environment. Long-term supply and demand forecast under a regulating OPEC role shows that Russian crude oil price will be maintained at the level not lower than $18- 20/barrels. Convergence of domestic and international oil and petroleum product prices –Improvement of legislation. Stabilization of the PSA regime is in its final stage. Enhancement of taxation regime, including taxation regime for oil companies. Nondiscriminative access of oil companies to gas transportation facilities –Complications. Inflation growth. Low pace of structural reforms in Russia

LUKOIL’s International Operations. Case Study: Bulgaria Operations launched in Largest refinery in the Balkans. Retail chain revenues amounted to $1.5bn, an equivalent to 7% of GDP and 25% of tax revenues of the country Active development of the Mediterranean markets (Turkey, Greece, Serbia, Macedonia and other countries) in the sphere of oil, petrochemical products and polymers. Annual sales growth by 3-15% Over 2 years Neftochem became profitable. $120m of old debt was paid. Production of petroleum products in accordance with European standards. Output growth by 20%. Environmental safety Attractive perspectives in terms of supplies of various types of products, including liquefied gas, in the Balkans and on the Black Sea. Raising of product quality to international standards. Joint integrated efficient development with Petrotel (Romania) and Odessa refinery (Ukraine)

LUKOIL Overseas Holding participates in major projects in highly prospective hydrocarbon basins Russia – JV mature production Caspian & Kazakhstan – exploration – early production Middle East – new ventures North Africa – JV production Focus Regions of LUKOIL Overseas Holding MAP

Efficiency Diversify E&P portfolio Find and develop new, lower cost reserves Exploit LUKOIL’s competitive advantages – regional expertise – advantaged logistics Mitigate “single market risk” Goal: Increase share of international efficient projects in LUKOIL’s production portfolio Geographic Breakdown of Production, MM tons/year Expanding Production Outside Russia

Strategic Interest in Getty Petroleum Marketing n Upon completion of Timan-Pechora and its associated refinery, LUKOIL plans to deliver gasoline to the United States East Coast — The sale of gasoline directly through controlled sites could enhance profit margins by 18 to 20% n Getty Petroleum Marketing ("GPM") key strategic strengths: — Over 1 billion gallons of annual gasoline sales — 1,300 retail sites in the northeastern United States — Strong brand recognition — Significant market share in core urban areas n The acquisition of GPM is expected to be the beginning of a significant expansion in the eastern U.S. retail market

GPM: Growth Strategy n Ancillary Business Expansion — Formalize, modernize and revitalize “other uses” — New revenue streams — Mitigate earnings volatility — Support volume growth n Discretionary Spending — Internal growth — Image upgrade — Improve customer experience — Attractive return characteristics n Acquisitions — Ample opportunities — Increase utilization of distribution capacity more quickly n Capitalize on Parent Company Resources

LUKOIL Going Global Introduction Update on Company Strategy Focus on International Growth –Upstream: Former Soviet Union and Middle East –Downstream: Eastern Europe and Atlantic Basin Growth Targets Update on Other Recent Developments US GAAP Financials Dividend and Proposed Preference Share Conversion Corporate Governance Initiatives AGENDA