TNK-BP ANNOUNCED THE HIGH RESULTS FOR THE NINE MONTHS OF 2011: RECORD LEVELS OF PRODUCTION AND NET PROFIT

· In the first nine months of 2011, TNK-BP increased its oil and gas extraction, excluding joint ventures 2.1% over the same period in 2010 and 3 September reached a historical peak production in 1824 th. BC / day. Extraction by the share in Slavneft and assets in Venezuela grew by 2.2% to 1969 thousand barrels per day. BC / day in comparison with January-September 2010.

· The company is continuing its insured in the second quarter of 2011, the program efficiency of production in mature fields in Western Siberia. Through the use of new pilot technologies, including restrictions on water production and more efficient water injection, produced water volume decreased by 2.2 million tonnes over the same period in 2010.

· Mining in the Orenburg region in the first nine months grew by 4%, thanks to the success of the company in the exploration of new resources, obtaining licenses and effective integration of resources in production. Thus, for the first nine months of 2011, the Company acquired on federal auctions 4 licenses in Orenburg region, increasing the resources of 158 million barrels. BC

· New projects Uvat group and Verkhnechonsk, continued to increase production, while their share in total liquids production reached 13%.

· The company has continued to increase implementation of the gas, both natural and associated, in accordance with the adopted strategy, providing a substantial increase in the gas business and increase its share of EBITDA and mining companies to more than 20% by 2020. Mining Rospan grew by 24% over the same period last year, and implementation of associated gas increased by 8 percent. The company has advanced in the preparation of a full scale Rospan and working opportunities to further increase the utilization of associated petroleum gas. In particular, the company is preparing the launch of a new compressor station with capacity of 0.7 billion cubic meters at the Nizhnevartovsk gas processing plant in the fourth quarter of 2011, as well as exploring the possibilities of increasing the capacity of the Orenburg gas processing region.

• In the electricity sector, we completed an important stage in the construction of 3rd Block Nizhnevartovsk Power Plant, bringing GE gas turbine 400 MW in Russia.

· The volume of oil processing totaled 763 thousand barrels / day., Up 7% over the same period of 2010. This achievement was a result of the successful continuation of measures to address the technological limitations. Tolling operations in the Ukrainian oil refineries LINIK grew by 82%, which allowed the Ukrainian business to get $ 17 million net profit for the nine months of 2011 compared to a net loss for the same period in 2010.

· The company continued its efforts to expand the premium retail chain, increasing the number of stations under the brand BP in Russia and 97 at the end of the third quarter. The company also continued to develop TNK brand by launching a loyalty program Carbon.

· As part of the International Business Development Company completed the acquisition from BP Block 01/06 in Vietnam and will focus on the integration of assets in Vietnam and Venezuela in the business structure of TNK-BP and the maintenance of high operational and financial performance of these assets.

“For the first nine months of 2011, TNK-BP reached a record financial performance, due to favorable market conditions, high standards of production and efficiency, – said the chief financial officer of TNK-BP Jonathan Muir. – Net income rose 75% to 6.8 billion dollars, which was an absolute record in company history. Compared to the same period last year, EBITDA increased by 52% and reached 11.0 billion dollars, helped by growth in production and processing, partially offset the negative impact of exchange rates, and also increased tariffs and excise taxes.

Company’s business continued to grow, due to both organic development and acquisitions: the new projects, Uvat group and Verkhnechonsk, went to new levels of production, and foreign assets made the first contribution to the results of TNK-BP.

The company strictly observed fiscal discipline, setting a new benchmark for the cost of borrowing and saving ratio of debt to equity at 21%. The continued positive trend in all areas of operations of the Company gives every reason for confidence that 2011 could become the most successful year in the history of TNK-BP. ”

FINANCIAL HIGHLIGHTS FOR THE NINE MONTHS OF 2011

· Revenue for the nine months of 2011 increased by 38% over the same period last year, reflecting higher prices and increased production Urals, and was partially offset by the redistribution of volumes on the domestic market in order to obtain higher netbacks,

· Export duties and taxes except income tax for the first nine months of 2011 increased by 41% over the same period in 2010. This is due to the influence of the growth rates of Urals export duty and tax on the extraction of minerals, as well as increased excise rates on petroleum products, which were partially offset by a significant positive effect of time lag in export duties.

· Cash costs (operating, transportation, commercial and administrative expenses) increased by 19%, mainly due to growth rates, inflation and the effect of the ruble, as well as an increase in valuation allowances.

· The EBITDA for the nine months of 2011 amounted to 11.0 billion dollars, which is 52% higher than in 2010. This is due mainly to higher prices, the positive effect of lag on export duty and increase in the volume of production and processing. Positive growth factors, the EBITDA was partially offset by negative exchange rate impact, as well as increased tariffs and excise taxes.

· Net profit for the nine months of 2011 totaled $ 6.8 billion, a 75% increase over the same period in 2010. Earnings growth has exceeded the growth rate of EBITDA, mainly due to the relatively stable level of expenses for depreciation.

· Cash flow from operating activities for the nine months of 2011 totaled 8.0 billion dollars, up 15% more than in 2010. This reflects a growth rate EBITDA (adjusted for non-operating income and expenses), partially offset by an increase in working capital, mainly due to the impact of rising prices at the level of receivables and credit extension number of periods in order to obtain higher netbacks.

· Due to the growth of profit and shareholders’ equity ratio of debt to equity was maintained at 21%, despite an increase in net debt by 0.4 billion dollars.

· The amount of organic capital expenditure for the nine months of 2011 totaled $ 3.5 billion, up 27% more than in 2010. Growth capital expenditures primarily related to increased investment in promising new fields (Verkhnechonskoye, Uvat group) and projects in the Orenburg region, as well as in oil refineries in the Saratov and Ryazan.

FIGURES III HF. 2011

· Revenues for the third quarter of 2011 decreased by 1% compared with that for the second quarter, reflecting mainly lower oil prices.

· Export duties and other taxes increased by 5% compared with the previous quarter due to rising oil exports and the relative decrease in the effect of time lag in export duty, which was partially offset by lower oil prices Urals.

· Cash costs (operating, transportation, commercial and administrative expenses) in the third quarter remained at the level of the second quarter, as growth rates and inflation, together with the seasonal increase in volumes of downhole operations, the volume of contracting and other activities were offset by the weakening ruble.

· The EBITDA for the third quarter of 2011 increased by 3% compared with that for the second quarter. This was due mainly to the positive influence of the weakening ruble, increasing production and disposable income, which were partially offset by deteriorating market conditions and the effect of decreasing the time lag in export duties.

· Net profit for the third quarter of 2011 increased by 8%, exceeding the dynamics of the EBITDA, mainly due to exchange gains in the third quarter compared to a loss in the second.

· Cash flow from operating activities in the third quarter fell by 44% compared with the figures for the second quarter, mainly due to an increase in working capital. The increase in working capital was primarily due to an increase in the managed payment terms of receivables, as well as with lower levels of accounts payable due to the depreciation of the ruble at the end of the third quarter.

· The volume of organic capital expenditure in the third quarter of $ 1.3 billion, remaining at the level of the second quarter.

· In comparison with the analogous results for the third quarter of 2010, EBITDA and net profit for the third quarter of 2011 increased 40% and 57% respectively. The main reason was the improvement in market conditions – rising prices for Urals oil at 48%, and increased production by 3.9%. These positive factors were partially offset by lower sales volumes due to the formation of inventories in the third quarter of 2011 compared to the substantial sales of inventory in the third quarter of 2010, a relatively low time lag in export duties, as well as the influence of the ruble and inflation costs.

The information presented in this press release financial information relates to the company “TNK-BP International Ltd..” (TNK-BP International Ltd.).

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