FOR IMMEDIATE RELEASE

TNK International Reports Results for the Nine Months of 2002 under US GAAP

Moscow, February, 2003. Today TNK International reported its consolidated financial results for the first nine months of 2002. The financial statements were prepared in accordance with U.S. GAAP.

The following table is summary unaudited consolidated financial statement data prepared according to U.S. GAAP for the three and nine months ended 30 September 2002 compared with the same periods of 2001.

US$ Mn / 3Q 2002 / 3Q 2001 / 9M 2002 / 9M 2001
Gross Revenues / 1,968.1 / 1,617.0 / 4,693.3 / 4,766.0
Net Revenues / 1,764.5 / 1,376.7 / 4,138.4 / 4,016.2
Cost of sales / (759.8) / (525.0) / (1,819.1) / (1,629.9)
Depreciation and amortization / (101.1) / (76.7) / (296.5) / (269.8)
Gross profit / 903.6 / 774.9 / 2,022.8 / 2,116.4
Selling, general and administrative expenses / (354.1) / (236.2) / (938.1) / (733.0)
Operating profit / 549.5 / 538.7 / 1,084.7 / 1,383.4
Interest expense / (38.8) / (75.9) / (219.1) / (215.5)
Other non-operating income / 18.0 / 23.1 / 78.8 / 76.4
Pretax profit / 528.7 / 486.0 / 944.4 / 1,244.4
Taxation / (35.0) / 301.6 / (113.6) / 46.0
Minority interest / (31.8) / (165.5) / (66.6) / (262.0)
Net income / 462.0 / 622.1 / 764.2 / 1,028.4
EBITDA / 668.6 / 638.6 / 1,460.0 / 1,729.7
Cash flow from operations / 517.9 / 129.9 / 860.3 / 775.0

You can view and download the Acrobat and MS Excel versions of the nine months results and the investor relations presentation in the US GAAP and Corporate Presentations sections of our web-site,

Results summary:

-28% increase in net revenues that reached US$ 1,764.5 million in the third quarter of 2002 compared to the third quarter of 2001. For the nine months ended 30 September 2002 net revenues reached US$ 4,138.4 million, a 3% increase compared to the same period in 2001.

-9% increase in pretax profit that reached US$ 528.7 million in the third quarter of 2002 compared to the third quarter of 2001. Pretax profit represents financial results net of the one-time deferred income tax benefit effect that was recorded in the third quarter of 2001 due to the change in corporate income tax rates from 35% to 24% in the Russian Federation. In the nine months ended 30 September 2002 pretax profit reached US$ 944.4 million, a 24% decrease compared to the same period of 2001. The decrease in the pretax profit as well as EBITDA and net income in the nine months ended 30 September 2002was mostly due to lower international and domestic oil prices in the first quarter of 2002 and higher transportation tariffs.

-5% increase in EBITDA that reached US$ 668.6 million in the third quarter of 2002 compared to the third quarter of 2001. In the nine months ended 30 September 2002 EBITDA reached US$ 1,460 million, a 16% decrease compared to the same period of 2001.

-26% decrease in net income that reached US$ 462 million in the third quarter of 2002 compared to the third quarter of 2001. In the nine months ended 30 September 2002 net income reached US$ 764.2 million, a 26% decrease compared to the same period of 2001.

-299% increase in cash flow from operations that reached US$ 517.9 million in the third quarter of 2002 compared to the third quarter of 2001. In the nine months ended 30 September 2002 cash flows from operations reached US$ 860.3 million, a 11% increase compared to the same period in 2001.

-8% increase in oil production that reached 747 thousand barrels per day in the nine months ended 30 September 2002 compared with the same period of 2001. The effect of the increased oil production on revenues was partially offset by lower crude purchases and lower international and domestic prices in the first nine month of 2002. At the same time, oil prices in CIS outside Russia were higher in the nine months ended September 2002.

-16% decrease in per barrel lifting costs that reached US$ 2.38 in the nine months ended 30 September 2002 compared to the same period in 2001.

Nine Months Ended 30 September 2002 Compared to Nine Months Ended 30 September 2001

Sales of crude oil increased by 1,4% to U.S.$ 2,299.3 million in the nine months ended 30 September 2002 fromU.S.$ 2,268.1 million in the nine months ended 30 September 2001, due to higher production and increased export sales volumes, partially offset by lower prices and lower crude purchases.

The increase incrude oil production was mainly due to the results of enhanced recovery techniques. Whilst overall crude oil sales volumes remained the same (395 mbpd in the nine months of2002 vs 398 mbpd in the nine months of 2001), export crude sales volumes (including exports to the CIS)increased to 391 mbpd in the nine months of 2002, compared to 331 mbpd in the nine months of 2001. In the nine months of 2002, export sales were U.S.$ 2,284.6 million compared with U.S.$ 2,050.5 million in the nine months of 2001. Domestic crude oil sales in the nine months of 2002 were U.S.$ 14.7 million comparedto U.S.$ 217.6 million in the nine months of 2001. Theaverage sales price realised for export (including export to CIS) and domestic crude oil sales was U.S.$21.28/Bbl in the nine months of2002 compared to U.S.$20.87/Bbl in the same period of 2001, following the increased export crude oil sales (including export to the CIS) during the nine months of 2002.

Sales of refined products decreased by 5% to U.S.$2,204.6 million in the nine months ended 30 September 2002 from U.S.$2,319.2 million in the nine months ended 30 September 2001. In the same period in 2002,U.S.$ 1,311.4 million of these sales represented export sales compared to U.S.$ 1,227.8 million in the nine months of 2001, and in the nine months of 2002, U.S.$ 893.2 million represented domestic sales compared to U.S.$ 1,091.4 million in the nine months of 2001. The decrease in refined product sales in the nine months of 2002 was primarily due to weak domestic product prices, particularly in the first three months of2002 as a result of export restrictions imposed by the Russian Government in response to pressure fromOPEC, and an overall decrease in export product prices, as well, as due to decrease in sales volumes (approximately 398 mbpd inthe nine months of 2002 and 411 mbpd in the same period of 2001).

Excise taxes and export duties decreased by 26% to U.S.$ 554.9 million in the nine months ended30 September 2002 from U.S.$ 749.8 million in the same period in 2001. Excise taxes and export dutiesrepresented approximately 11.8% of gross revenues in the nine months of 2002 compared to 15.7% in the nine months of 2001. This decrease was due primarily to the replacement ofexcise tax on crude oil with a unified production tax effective from 1 January 2002, and a decrease in crude export duty rates to U.S.$2.13/Bblduring the nine months ended 30 September 2002 compared to U.S.$3.79/Bbl in the same period in 2001. Thiswas partially offset by a slight increase in excise taxes on refined products such as gasoline, diesel fuel and motor oils beginning 1 January 2002 andthe introduction of an excise tax on refined products in Ukraine.

Operating expenses decreased by 14% to U.S.$ 585.4 million in the nine months ended 30 September 2002from U.S.$ 681.3 million in the nine months ended 30 September 2001, due to decrease in upstream expenses

Decrease in upstream operating expenses was largely due to increased production from lower cost fields(Orenburgneft), decreasing production from higher cost fields (TNK-Nyagan) and TNK’scontinuing cost cutting measures aimed at undertaking only those projects that result in higher returns, with the shift to more sophisticated and more efficient recovery techniques.

Downstream operating expenses increased in 2002 due to increased prices for materials and electricity. The volumes of refined products produced were stable.

Taxes other than income tax increased by 47% to U.S.$ 788.8 million in the nine months ended30 September 2002 from U.S.$ 425.2 in the nine months ended 30 September 2001. Of this increase, U.S.$ 400.0 millionwas attributable to the introduction of the unified production tax in 2002, offset slightlyby the repeal of the royalty and mineral restoration tax. Through to 31 December 2004, the base rate for the unified production tax is set at 340 roubles per tonne of crude oil produced and is to be adjusted depending on themarket price of Urals blend and the rouble/dollar exchange rate.

Selling, general and administrative expenses consist primarily of transportation costs (60% of SG&A in nine months of 2002), wages andsalaries of SG&A staff and selling and distribution expenses (including those related to storage depots, terminals andcommissions). Selling, general and administrative expenses increased by 28% to U.S.$ 938.1 million inthe nine months ended 30 September 2002 from U.S.$ 733.0 million in the same period in 2001. The increase in the nine months of 2002 was due primarily to an increase in transportation expenses resulting from increasedpipeline and railway tariffs and increased volume of oil transportation by the railway to increase export sales and take advantage of high oil prices. Transportation costs were U.S.$ 563.3 million in the 9 months of 2002 ascompared to U.S.$ 423.5 million in the 9 months of 2001.

Income tax expense amounted to U.S.$ 113.6 million in the nine months ended 30 September 2002 comparedto tax gain of U.S.$ 46.0 million in the nine months ended 30 September 2001. The gain in 2001 was primarily due to thechange in Russian statutory corporate income tax rates from 35% to 24% (from 15% to 6% for dividend income) in Russia, from 11% to 7,5% in Russian economic development zones. Although the change in rates came into effect on 1 January 2002, it was enacted and therefore applied in 2001 in deferred tax calculation in accordance with U.S. GAAP. The introduction of a new tax rate resulted in U.S.$ 252 million deferred tax gain in the 9 months 2001 financial statements.

Minority interest was U.S.$ 66.6 million in the nine months ended 30 September 2002 compared toU.S.$ 262.0 million in the nine months ended 30 September 2001. Minority interestdecreased mostly due to a decrease inearnings attributable to minority interest owners and due to TNK completing a share consolidation inDecember 2001, thereby reducing the number of subsidiaries with minority interest holders.

Contacts:

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Marina DrachevaPeter SpringAndrew Merrill

Tyumen OilThe Maitland ConsultancyAbernathy MacGregor

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