1

Conclusions of the Specialist

S. Wesley Haun

2

QUESTIONS PRESENTED

• How does the concept of vertical integration apply in the world wide oil and gas business?

• Where did Yukos Oil Company fit in the context of the Russian and world wide oil and gas industry as it evolved from 1997 to 2004? How does the Yukos Oil Company vertically integrated structure as it evolved between 1997 and 2004 compare to the operations of major oil companies based in Russia and other countries?

• Did Yukos Oil Company sell oil from its exploration and production companies to its marketing companies in the same manner that other international vertically integrated oil and gas companies would have been expected to sell their crude oil?

3

• Khodorkovsky’s actions were consistent with those of company leadership intent on building a model company that would achieve sustained growth and long term profitability.

• Yukos was comparable to other Russian & International vertically integrated oil and gas companies in both structure and operations.

• Yukos adopted stringent accounting practices, became more transparent, and publicly presented its past performance and future plans.

CONCLUSIONS

4

CONCLUSIONS

• The wellhead price of oil differs greatly with multiple bench mark or actual end-purchaser prices.

• To compare the wellhead price to the end user price,

in essence, is to compare apples to oranges.

• The manner by which the marketing or trading companies within Yukos purchased oil from the exploration and production companies was consistent with industry standards, custom, and practice.

5

CONCLUSIONS

• The charges are contradicted by the facts. Khodorkovsky’s leadership and Yukos’ performance do not reflect a plan to embezzle the company’s oil production.

• Khodorkovsky’s failure to implement these management practices would have been contrary to the interest of all shareholders, as well as of the Russian Federation.

6

VERTICALLY INTEGRATED OIL & GAS COMPANIES

• Upstream – exploration and production

• Midstream – processing/treating and pipeline

• Downstream – refining and marketing

petrochemicals and petroleum products

7

SPECIFIC CHARACTERISTICS OF THE OIL & GAS INDUSTRY

• Capital intensive

• Cash flow driven

• Need for free cash flow

• High risk

• World-wide market

8

SPECIFIC CHARACTERISTICS OF THE OIL & GAS INDUSTRY

• World-wide prices reflect supply and demand

• OPEC’s impact

• Expansion/merger – economies of scale

• VIO&GCs – use of foreign entities

9

YUKOS AND ITS RUSSIAN PEERS

• TOP VIO&GCs

• COMPARABLE STRATEGY AND OBJECTIVES

10Source: Yukos Analyst Presentations 2002

11Source: Lukoil Presentation, 9M 2006 Financial Results (US GAAP), January 12, 2006, www. lukoil.com

12

Source: Presentation TNK-BP: “Optimization of the Integrated Value Chain within TNK-BP”, Aspen World Conference, October 10-15, 2004, www.tnk-bp.com.

13

Source: Economics of Worldwide Petroleum Production, page 87.

14

ORGANIZATION

• Yukos was a vertically integrated oil and gas company first organized by the Russian Government

• Khodorkovsky organized Yukos in a manner similar to other VIOGCs:

– Operating companies

• E&P

• R&M

– Centralized corporate management

• shared services

15

YUKOS OIL COMPANY ORGANIZATION CHART

YUKOS Moscow

YUKOS Exploration and Production

YUKOS Processing and Sales

Siberian Oil Company45 Regional Sales

Companies100 Tank Farms

1,300 Gas Filling Stations

YuganskneftegazSamaraneftegaz

TomskkneftManoil

East Siberian Oil CompanyArcticagaz

Urengoil Inc.

Novokuybyshev RefineryKuybyshev Refinery

Syzran RefineryAchinsk Refinery

Strezhevoy RefineryNovokuybyshev Oils Plant

Angarsk Petrochemical ComplexMazeikiu Nafta

The Company has 110,000 employees.

YUKOS OIL COMPANY ORGANIZATION CHART

YUKOS Moscow

YUKOS Exploration and Production

YUKOS Processing and Sales

Siberian Oil Company45 Regional Sales

Companies100 Tank Farms

1,300 Gas Filling Stations

YuganskneftegazSamaraneftegaz

TomskkneftManoil

East Siberian Oil CompanyArcticagaz

Urengoil Inc.

Novokuybyshev RefineryKuybyshev Refinery

Syzran RefineryAchinsk Refinery

Strezhevoy RefineryNovokuybyshev Oils Plant

Angarsk Petrochemical ComplexMazeikiu Nafta

The Company has 110,000 employees.

Source: Yukos Presentation, “Yuganskneftegaz Open JSC”, 2003.

16Source: Yukos Presentation September 2, 2003, Lehman Brothers Conference, page 25.

17Source: Lukoil: Efficient Growth, Conference “Russia and Growth”, June 24, 2002, www.lukoil.com.

18Source: Rosneft IPO slides dated June 24, 2006.

58

Consolidated StructureConsolidated Structure

Joint Projects

Sakhalin 1

Sakhalin3 (VeninskiBlock)

Sakhalin 4

Rosneftegas(88.15%)Russian Federation(100%)

ROSNEFT

E&P

Rosneft’s producing assets andassets being developed

Refining Transshipment Marketing

Yuganskneftegaz

Purneftegaz

Severnaya Neft

Sakhalinmorneftegaz

Krasnodarneftegaz

Stavropolneftegaz

Vankorneft

Komsomolsk Refinery

Tuapse Refinery

Arkhangelsknefteproduct

Tuapsenefteproduct

Nakhodkanefteproduct

Vostoknefteproduct

Kubannefteproduct

Stavropolnefteproduct

Murmansknefteproduct

Other Marketing Subs

R&M

Sakhalin 5

Kurmangazy

West Kamchatka

East Sugdinski

Verkhnechonsky Dagneft

Dagneftegaz

Grozneftegaz

Minority Shareholders (11.85%)

Assets to be consolidated

Selkupneftegaz

Rosneft plans to adopt an “operator structure”following the Share Swap

Rosneft will hold a 100% interest in 12 limited liability companies

The Operating Companies will produce, refine or market crude oil, gas or products basedon services agreements with Rosneft

Material assets will be directly owned by Rosneft which will lease them to the corresponding Operating Company

Rosneft will hold or re-apply for all exploration and production licenses previously held by the merging subsidiaries

19Source: Lukoil 2004 Analyst Book, page 4

20

Source: TNK-BP Corporate Restructuring Memorandum (January 14, 2005).

21

Source: Shell Oil 2003 Annual Report, page 6.

22

YUKOS OPERATIONS RUSSIAN AND INTERNATIONAL PEERS

• Lower lifting costs

• Lower finding costs

• Increase production

• Increase reserves

• Acquire international assets

• Increase shareholder value

23Source: Yukos Presentation, Renaissance Capital Annual Investor Conference June 21, 2004 .

24

Yukos Peer Comparison

SEC Proved Reserves as of Year- End

Crude Oil (million barrels)

Company 1998 1999 2000 2001 2002 2003 1998-2003 Change

ExxonMobil 10,953 11,260 11,561 11,491 11,823 12,075 1,122 10% Yukos 9,068 9,553 9,628 9,552 10,453 11,833 2,765 31% PetroChina 10,365 10,999 11,032 10,959 10,937 10,919 554 5% Shell 8,399 8,509 8,670 5,600 5,782 5,009 -3,390 -40% BP 8,432 7,572 7,643 8,376 9,165 10,081 1,649 20% Chevron 8,270 8,264 8,519 8,524 8,668 8,599 329 4% TotalFinaElf 6,085 6,898 6,960 6,961 7,231 7,323 1,238 20% Lukoil 10,700 13,500 14,200 14,612 15,258 15,977 5,277 49%

Note: Shell restated their reserves

25

Company 1998 1999 2000 2001 20021998-2002

Change 2003

ExxonMobil 58,006 56,795 55,366 55,946 55,218 -2,788 -5%

Shell 54,333 52,847 50,342 51,613 53,438 -895 -2%

BP 32,767 35,526 43,518 46,173 48,789 16,022 49%

PetroChina 22,336 24,602 32,533 33,102 38,817 16,481 74%

TotalFinaElf 18,325 20,253 20,765 21,929 21,575 3,250 18%

Chevron 15,820 17,163 17,844 15,410 19,335 3,515 22%

ConocoPhillips 12,452 12,506 14,587 12,448 16,040 3,588 29%

Yukos 1,754 2,270 2,448 2,484 6,970 5,216 297% 8,761

Unocal 5,675 6,118 6,039 6,349 6,555 880 16%

Apache 2,132 2,352 3,384 4,005 4,055 1,923 90%

Amerada 2,335 2,181 2,127 2,881 2,477 142 6%

Marathon 4,069 3,787 3,094 2,858 2,993 -1,076 -26%

Natural Gas (Bcf)

Sources: Company financial statements, annual reports and SEC filings.

26

Crude oil output in millions of metric tons per year

million tons 2000 2001 2002 2003

Lukoil* 74.26 76.70 78.12 78.91

YUKOS 49.78 58.11 69.50 80.75

Surgutneftegaz 40.62 44.03 49.21 54.03

TNKBP** 29.25 35.03 37.88 61.57

Sibneft 17.20 20.59 26.33 31.39

Tatneft 24.34 24.61 24.61 24.67

Bashneft 11.94 11.86 11.97 12.05

Rosneft 13.47 14.94 16.11 19.57

Slavneft 12.27 13.54 14.70 18.10

SIDANCO 10.69 15.63 16.26 **

Gazprom 10.01 10.21 10.77 11.02

Other 31.47 25.69 26.62 29.33

Russia total 323.22 348.07 379.63 421.38

Source: “Russian Oil Sector: Fueled by Strong Prices . . .But Taxing Times Ahead” Troika Dialogue (February 9, 2004), p. 4

E&P RESULTS

27

YUKOS versus Lukoil: free cash flow, dollars per bbl

Source: “Russian Oil Sector: Fueled by Strong Prices . . . But Taxing Times Ahead” Troika Dialogue (February 9, 2004).

28

VIO&GC Intracompany Pricing

• Pricing factors for transactions between E&P and R&M– Transportation– Logistics– Other costs

• Supply and demand

• E&P sale price ≠ downstream delivered price

• Consistent with Russian and International VIO&GCs

29

Lukoil Oil Sales 2001 2002 2003 2004 2005

Domestic $10.88 $8.32 $8.56 $15.15 $24.55

Export $21.22 $22.04 $24.84 $32.56 $48.84

30Source: 2005 Performance Results, OAO TNK-BP (28 June 2006), www.tnk-bp.com.

31Source: Rosneft Public Disclosures http://rosneft.ru/company/disclosure/ung-quarterly.html

32

SUMMARY• MBK turned Yukos into a successful,

growing, sustainable, long-term company– Centralized Management– Engage International Professionals– Increase Production and Cut Costs– Enhance Corporate Governance –

Independent Board of Directors– Acquire International Assets– Increase Shareholder Value

33

SUMMARY

• Yukos:– collected revenues for the sale of oil and gas– paid billions of dollars in operating expenses– paid billions of dollars in taxes– spent billions of dollars on capital expenditures, dividends,

and stock purchases– spent billions of dollars to grow subsidiary businesses

through investments and acquisitions, and– had billions of dollars in cash in its accounts

34

Yukos Operational Statistics (Values in Millions of US dollars)

Year 1998 1999 2000 2001 2002 2003 Total

Revenues 3,140 4,177 9,032 9,461 11,373 16,522 53,705 Total Operating Expenses excluding taxes,

goodwill, depreciation and amortization* 1,881 1,465 2,828 3,434 4,255 6,264 20,127

Taxes including income tax 1,311 1,192 2,453 2,777 3,833 5,509 17,075 Net -Profit (837) 1,152 3,724 3,156 3,058 4,700 14,953 Capital Expenditures**, net 221 174 589 954 1,263 1,549 4,750 Other Long -term investments *** and Treasury Stock purchases, net

192 497 82 586 1,019 6,785 9,161

Cash & cash equivalents at Dec 31 yearend 202 447 1,939 1,409 1,647 1,294 x

Stock Dividends 0 0 105 473 280 1,724 2,582

Financial data is from 1999, 2001, 2002 and 2003 Yukos US GAAP consolidated financial statements. *Also excluding write-offs of property and investments

**Additions to Property, Plant and Equipment ***Includes purchases of additional shares of subsidiaries and advances to investment dealers

35

Acquisitions by Yukos Oil Company (in millions of USD)* 1998 1999 2000 2001 2002 2003 Total Sibneft* * 6690 6690

VNK** * 300 510 256 32 1098

Arcticgaz 274.3 274.3

Yuganskneftegaz 120.4 31 49 200.4

AB Mazeikiu Na fta 164 164

ZAO Rospan International (part of acquisition began in 2001) 133 133

Angarsk Petrochemical Company 32 74 106

John Brown Hydrocarbons Limited and Davy Process technology limited

100 100

OAO Ne ftegaztechnologiya 97 97

Tomskneft VNK 49 10 17 76

OOO Geoilbent 75 75

ZAO Urengoil (part of acquisition began in 2001) 75 75

Transpetrol 74 74

Samaraneftegaz 54.8 7 11 72.8

Eastern Sib erian Oil and Gas Company 65 4 69

Sakhaneftegaz 50 50

Kvaerner ASA 37.5 37.5

Achinsk refinery 2 25 27

Novokuibyshevsk refinery 6 4 10

Syzran refinery 3 4 7

Kuibyshev refinery 4 3 7

Other 27.4 52.8 80.2

Total 300 734.2 187.4 381.3 1026.3 68 94 9523.2

*Acquisitions are compilations from the Notes to the Consolidated US GAAP reports and MD&A and may not include every acquisition **includes the loans and 2003 tre asury stock purchases for purposes of exchanging for Sibneft shares ***includes the loans for 53.3% acquisition in 98 -99

36

SUMMARY

• Oil production and revenues accounted for in Yukos financial reporting

• Embezzlement is associated with secretive, hidden taking of assets.

• Yukos performance was publicly disclosed, there were no objections to their accuracy by the auditors, government agencies, or investment institutions.

• Khodorkovsky made Yukos more transparent

37

SUMMARY

• Khodorkovsky’s reorganization and management of Yukos benefited all of the Yukos shareholders and the production subsidiaries and the Russian Federation.