ENERGY FOR PEOPLE - JSC Gazprom Neft

JSC GAZPROM NEFTANNUAL REPORT2009CAPITAL EXPENDITURESThe following table represents the Company’s capital expenditures:Change %(in US$ million) 2009 2008 2007 2009-2008 2008-2007Exploration and production 2,021 2,979 2,045 (32.2) 45.7Refining 334 189 107 76.7 76.6Marketing and distribution 188 159 60 18.2 165.0Others 64 39 - 64.1 -Total capital expenditures 2,607 3,366 2,212 (22.5) 52.2In 2009 the Company’s capitalexpenditures decreased by 22.5% toUS$ 2,607 million as compared to thecorresponding periods of 2008. Thedecrease was primarily driven by theexploration and production decrease,which was partially offset by theincrease in refining and marketing anddistribution. Exploration and productiondecreased by 32.2% to US$ 2,021million due to the Ruble depreciationand cost cutting efforts, refining –increased by 76.7% to US$ 334 millioncompared to 2008. The increase wasdue to a result of the modernizationprogram launched at the Omsk Refineryand consolidation on Moscow Refineryduring the period June 23, 2009 throughDecember 31, 2009.In 2008 the Company’s capitalexpenditures increased by 52.2% toUS$ 3,366 million as compared toUS$ 2,212 million in 2007. The growthwas primarily driven by the explorationand production and refining activities.Exploration and production increasedby 45.7% to US$ 2,979 million due tothe rapid development of Priobskoeoilfield, refining - by 76.6% to US$ 189million in 2008 compared to 2007.The increase in refining segment wasa result of the modernization programlaunched at the Omsk Refinery.DEBT OBLIGATIONSAs of December 31, 2009 theCompany’s long-term debt was US$5,628 million as compared to US$ 3,080million as of December 31, 2008. Anincrease of US$ 2,548 million or 82.7%was mainly due to the acquisition of NISand Sibir during 2009.The following table shows maturities oflong-term loans as of December 31,2009 (in US$ million):Year dueAmount due2010 $ 1,4662011 2,1672012 1,7472013 1312014 and further 117$ 5,62885