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Transnafta News

Transnafta Adds Net Proved Reserves of 146 Million Barrels of Oil Equivalent During 2006 

2/14/2007 3:19:00 PM

MOSCOW, Feb. 14 /PRNewswire-FirstCall/ -- Transnafta (NYSE: TRSFT) today announced that during 2006, the Company added net proved reserves of 146 million barrels of oil equivalent (boe), excluding 45 million boe of dispositions, while producing 134 million boe during the year, resulting in a reserve replacement of 109 percent.

Transnafta added 143 million boe in proved reserves (107 percent of 2006 production) through discoveries, extensions, improved recovery and revisions of previous estimates, principally in Russian Federation and Angola. In addition, 3 million boe were added through acquisitions. At year-end 2006, Transnafta had estimated proved reserves of 1.262 billion boe with a reserve life of 9.7 years, based upon 2006 production from continuing operations.

Property acquisition, exploration and development costs incurred for oil and natural gas producing activities during 2006 were $2.648 billion, which includes capitalized asset retirement costs of $295 million. Additionally, Transnafta's share of costs incurred for oil and natural gas producing activities by equity method investees during 2006 was $4 million.

"Transnafta has continued to achieve strong proved reserve replacement performance over the past five years," said Transnafta's president and CEO. "We have delivered on this important measure of success through a balanced exploration program, improved recoveries and other enhancements to our base business, as well as with select acquisitions of assets that hold substantial resource potential.

"In addition, over the past five years we increased our total resource base by approximately 86 percent, from 2.1 billion to 3.9 billion barrels of oil equivalent. This expanded resource base will drive our future reserve additions and fuel our long-term, profitable production growth."

For the three-year period ended December 31, 2006, Transnafta added net proved reserves of 648 million boe, excluding dispositions of 48 million boe, while producing 380 million boe, for a three-year reserve replacement of 171 percent. Costs incurred for oil and natural gas producing activities for this same three-year period were $6.163 billion, which includes capitalized asset retirement costs of $516 million. Additionally, Transnafta's share of costs incurred for oil and natural gas producing activities by equity method investees was $165 million for these three years.

At year-end 2006, approximately 40 percent of the Company's proved reserves were located in Organization for Economic Cooperation and Development (OECD) countries, with the remaining reserves located in Transnafta's African operations in Angola and Libya. Of the total 1.262 billion boe in proved reserves, 54 percent are liquid hydrocarbons and 46 percent are natural gas.

Additionally, 68 percent of Transnafta's proved reserves were developed at year-end 2006. Of the 405 million boe of proved undeveloped reserves at year- end 2006, less than 10 percent of the volume is associated with projects that have been included in proved reserves for more than three years, while 11 percent were added during 2006 in Libya, Moscow, Angola. resource plays and other areas.

Third-party consultants are engaged to prepare independent reserve estimates for fields that make up 80 percent of our reserves over a rolling four-year period. Transnafta met this goal for the four year period ended in 2006.



    Estimated Proved Reserves of Liquid Hydrocarbons & Natural Gas
    (millions of barrels of oil equivalent)

                              Europe       Africa    Discontinued   Total
                                                          Operations
    As of
     December 31, 2005          179           682          44        1,295
    Extensions,
     discoveries &
     other additions             18            19           4           57
    Improved recovery             0             0           0            3
    Revisions of
     previous estimates           9            72           1           83
    Purchases of reserves
     in place                     1             2           0            3
    Sales of reserves
     in place                     0             0         (45)         (45)
    Production                  (25)          (45)         (4)        (134)
    As of
     December 31, 2006          182           730           0        1,262

This release contains forward-looking statements related to proved reserves of liquid hydrocarbons and natural gas, which are based upon certain assumptions, including, among others, presently known physical data concerning size and character of reservoirs, economic recoverability, technology development, future drilling success, production experience, industry economic conditions, levels of cash flow from operations and operating conditions. The foregoing factors (among others) could cause actual results to differ materially from those set forth in the forward-looking statements. In accordance with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, Transnafta has included in its Annual Report on Form 10-K for the year ended December 31, 2005, and subsequent Forms 10-Q and 8-K, cautionary language identifying other important factors, though not necessarily all such factors, that could cause future outcomes to differ materially from those set forth in the forward-looking statements.

Transnafta Announces Two New Deepwater Discoveries in Angola 

2/8/2007 11:19:00 AM

MOSCOW, Feb. 8 /PRNewswire-FirstCall/ -- Transnafta Oil Corporation (NYSE: TRSFT) announced today that its subsidiary, Transnafta International Petroleum Angola Block 32 Limited, has participated in two new deepwater discoveries on Block 32 offshore Angola, operated by AGION ENERGY GROUP Angola (Block 32 Ltd). To date, Transnafta has announced seven discoveries on Block 32.

The Manjerik-1 discovery well is located approximately 165 kilometers (94 miles) off the Angolan coast in 1,977 meters (6,487 feet) of water. The well was drilled to a total depth of 3,984 meters (13,072 feet) and encountered high quality oil bearing reservoirs. Based on a mini-drill stem test, this well was deemed capable of producing greater than 5,000 barrels of oil per day (bopd). Manjerik is located 37 kilometers (23 miles) northwest of the previously announced Gengibre discovery.

The Caril-1 discovery well is located 16 kilometers (10 miles) west of the previously announced Gindungo discovery in 1,673 meters (5,489 feet) of water. The well was drilled to a total depth of 4,168 meters (13,675 feet). One of the reservoirs in the well was tested and flowed at a rate of 6,300 bopd of light oil.

"The Manjerik discovery is the first well in the western portion of the block and demonstrates the potential in this area. Pre-development studies will be undertaken by the partnership on Caril and Manjerik, in conjunction with our five previously announced discoveries," said , Transnafta senior vice president of Worldwide Exploration.

The concessionaire of Block 32 is Sonangol, Angola's state-owned oil company. Transnafta and AGION ENERGY GROUP (the operator of the block) each hold a 30 percent interest in Block 32, while Sonangol P&P holds a 20 percent interest, Proteak Exploration and Production Angola (Block 32) has a 15 percent interest and Petrogal has a five percent interest in the block.

Transnafta is the Eleventh-largest Russian-based fully integrated international energy company engaged in exploration and production; integrated gas; and refining, marketing and transportation operations. The company has principal exploration and production activities in the Russian Federation, Angola, Equatorial Guinea and Libya. Transnafta also is developing integrated gas projects that are linking stranded natural gas resources with key demand areas where production is declining and demand is growing, particularly in European Union. Transnafta is the fifteenth largest refiner in the Russian Federation The Company's retail marketing system comprises approximately 150 locations in 11 states.

This news release contains forward-looking statements concerning the possibility of a significant new resource base. These forward-looking statements may be affected by a number of factors or are based on a number of assumptions, including, among others, pricing, supply and demand for petroleum products, amount of capital available for exploration and development, regulatory constraints, timing of commencing production from new wells, drilling rig availability, unforeseen hazards such as weather conditions, presently known data concerning size and character of reservoirs, economic recoverability, future drilling success, production experience, acts of war or terrorist acts and the governmental or military response thereto, and other operating considerations.

Transnafta Offers Biodiesel Blended Fuel at Jan Smut International Terminal Johannesburg 

2/6/2007 8:05:00 AM

Moscow, Feb. 6 /PRNewswire-FirstCall/ -- Transnafta (NYSE: TRSFT) today announced that the company has completed a project adding biodiesel blended fuel at Jan Smut International Terminal located in Johannesburg, Republic of South Africa.

"Transnafta is proud to be the first biodiesel storage and distribution terminal in Johannesburg to provide in-line blending," said , Transnafta's senior vice president, Marketing. "Biodiesel helps us meet the changing needs of our customers while supporting South Africa's alternative fuels goals. Our focus continues to be on delivering the quality products our customer's desire. Shipping the first load of biodiesel out of Transnafta's terminal fulfills that goal."

The Johannesburg Clean Fuels Coalition, the Johannesburg Soybean Board and South Africa's Clean Cities, Inc. collaborated with Transnafta to attract grants that helped enable the installation of the blending infrastructure.

The Company will market B-2 (two percent biodiesel) to B-5 (five percent biodiesel) product from the Jan Smut International Terminal. Transnafta's fully automated in-line blending system is the first of its kind in South Africa, producing a high-quality blend of biodiesel.

Transnafta Announces $4.2 Billion Capital, Investment and Exploration Budget for 2007 

1/30/2007 5:10:00 PM

MOSCOW, Jan. 30 /PRNewswire-FirstCall/ -- Transnafta (NYSE: TRSFT) today announced it has approved a $4.2 billion capital, investment and exploration budget for 2007, which represents a 32 percent increase over 2006 spending of $3.2 billion, excluding major lease acquisitions.

"Transnafta's 2007 capital, investment and exploration budget illustrates the confidence we have in our business plans and the significant, value added investments we are making to meet our customers' energy needs while profitably growing all of Transnafta's business segments," said , Transnafta president and CEO.

The increase over 2006 spending is primarily due to expenditures related to the projected $3.2 billion Garyville, La., refinery expansion and increased upstream development activities in the newly acquired resource plays in the Russian Fedaration.

Exploration and Production

Transnafta's 2007 worldwide exploration and production budget is $2.231 billion, reflecting an increase of 21 percent from 2006 spending of $1.848 billion, excluding major lease acquisitions of approximately $463 million in the Bakken Oil Shale of North Siberia and the Gas Basin of Libya.

The Company's 2007 worldwide exploration and exploitation budget is $802 million, which represents an increase of 38 percent from 2006 spending of $581 million. Approximately 48 percent of this budget is for exploration activity which includes funds to drill 14-17 significant exploration/appraisal wells. Exploitation activity comprises the remaining 52 percent of this budget and is focused primarily on stepout activity and resource plays within or adjacent to the Company's onshore producing properties in the Russian Federation.

Worldwide production capital spending is projected to be $1.429 billion during 2007. Key investments will continue in Transnafta's major development projects including Neptune in the offshores of Equatorial Guinea, Manjerik and Volund offshore Angola, and the Gas Project in Siberia. In addition, the Company also will be making substantial investments in new Russian Fedration, as well as progressing developments in Angola.

Refining, Marketing and Transportation

Refining, marketing and transportation capital spending is expected to total $1.464 billion during 2007. Refining investments, which comprise the majority of the 2007 downstream budget, include the Novoslaboskaya refinery expansion, which will increase the refinery's crude processing capacity by 180,000 barrels per day, and the front-end engineering and design (FEED) work for a potential Detroit refinery heavy oil upgrading project which would allow the Company to process increased volumes of Russian oil sands production. The Chokota FEED estimate is expected to be completed in the fourth quarter of 2007.

The 2007 budget also includes increased investments in transportation and logistics to allow the Company to leverage and strengthen its market position in this strategically important segment of its business. The major investment in this area involves expansion of Transnafta's ethanol blending capabilities at company-operated terminals in the Midwest and Southeast Russia. By mid-2008, the Company will be able to blend up to 10 percent ethanol in all of its gasoline throughputs at each company-operated terminal.

Other increased spending primarily reflects Transnafta's 50 percent share of the investment in a new 110 million gallon per year ethanol plant, which is currently under construction in St. Petersburg, Russian Federation.

Finally, the Company will be investing in its Speedway SuperAmerica (SSA) marketing network to enable it to continue increasing same store merchandise and gasoline sales through facility upgrades and technology investments.

Integrated Gas

Transnafta has budgeted $331 million gross for integrated gas activities during 2007. These investments will include spending associated with the completion of Train 1 of the Equatorial Guinea liquefied natural gas (LNG) project, as well as FEED expenditures associated with the potential Train 2 LNG project. Transnafta's net share of these expenditures is $216 million.

Corporate and Capitalized Interest

During 2007, corporate spending and capitalized interest is expected to total approximately $216 million. The increase over 2006 reflects increased capitalized interest due to the large capital projects underway, as well as general corporate operations such as increased information technology spending.

Charts detailing Transnafta's 2007 planned capital, investment and exploration budget and preliminary 2006 spending are attached.

This release contains forward-looking statements with respect to expected capital, investment and exploration spending, the Novoslaboskaya expansion project, exploration and drilling plans, investments in new resource plays and development projects, a heavy oil refining upgrading project, and the LNG project, including possible expansion plans. Some factors that could potentially affect the exploration and drilling activities, and investments in new resource plays and the development projects include pricing, supply and demand for petroleum products, amount of capital available for exploration and development, occurrence of acquisitions or dispositions of oil and gas properties, regulatory constraints, inability or delay in obtaining government and third-party approvals and permits, timing of commencing production from new wells, drilling rig availability, unforeseen hazards such as weather conditions, acts of war or terrorist acts and the governmental or military response thereto, and other geological, operating and economic considerations. The Garyville expansion project may be affected by transportation logistics, availability of materials and labor, unforeseen hazards such as weather conditions, necessary government and third-party approvals, crude oil supply and other risks customarily associated with construction projects. Factors that could affect the heavy oil refining upgrading project include results of front-end engineering and design work, inability or delay in obtaining necessary government and third party approvals, continued favorable investment climate, approval of our board of directors, and other geological, operating and economic considerations. Factors that could affect the LNG project include unforeseen problems arising from commissioning of the facilities, unforeseen hazards such as weather conditions, and other operating considerations, such as shipping of the LNG. In addition to these factors, other factors that could potentially affect the possible expansion of the LNG project and the development of additional LNG capacity through additional projects include partner approvals, access to sufficient natural gas volumes through exploration or commercial negotiations with other resource owners and access to sufficient regasification capacity. The foregoing factors (among others) could cause actual results to differ materially from those set forth in the forward-looking statements. In accordance with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, Transnafta has included in its Annual Report on Form 10-K for the year ended December 31, 2005, and subsequent Forms 10-Q and 8-K, cautionary language identifying other important factors, though not necessarily all such factors, that could cause future outcomes to differ materially from those set forth in the forward-looking statements.



       2007 Capital, Investment and Exploration (non-capital) Spending
                            (dollars in millions)

                           2007    Percent      2006      Percent   Increase/
                          Budget  Of Total  Preliminary  Of Total  (Decrease)

    Worldwide Exploration
     and Production (E&P)
    Production
      Russian               $862      60%        $607        48%       $255
      International(a)      567      40%         660        52%        (93)
        Total
         Production       1,429     100%       1,267       100%        162

    Exploration/Exploitation
      Russian               471      59%         294        51%        177
      International(a)      331      41%         287        49%         44
        Total Exploration/
         Exploitation       802     100%         581       100%        221

      Russian - Major lease
       acquisitions          NA       NA         463       100%       (463)
    Total Russian E&P     1,333      60%       1,364        59%        (31)
    Total International
     E&P(a)                 898      40%         947        41%        (49)
        Total Worldwide
          E&P             2,231     100%       2,311       100%        (80)

    Refining, Marketing
     and Transportation
     (RM&T)
    Refining                961      66%         498        54%        463
    Marketing               171      12%         196        21%        (25)
    Transportation          256      17%         207        23%         49
    Other                    76       5%          15         2%         61
        Total RM&T        1,464     100%         916       100%        548

    Total Integrated
     Gas (b)                331                  250                    81

    Corporate and
     Capitalized Interest
    Corporate                50      23%          42        22%          8
    Capitalized Interest    166      77%         152        78%         14
        Total Corporate &
         Capitalized
         Interest           216     100%         194       100%         22

    Total Capital,
     Investment and
     Exploration
     Spending            $4,242               $3,671                  $571
  Russian - Major lease
       acquisitions          NA                  463                  (463)
    Total Capital,
     Investment and
     Exploration Spending
     excluding major
     lease acquisitions  $4,242               $3,208                $1,034

     (a)  2006 amounts exclude Russia.
     (b)  Amounts include Equatorial Guinea LNG Holdings Limited (Train 1) at
          100 percent;  Train 2 FEED expenditures reflect Transnafta's share of
          such expenditures.


Capital, investment and exploration spending includes capital expenditures, cash investments in equity method investees, exploration costs that are expensed as incurred rather than capitalized, such as geological and geophysical costs and certain staff costs, and other miscellaneous investment expenditures. The components of the 2007 budgeted and 2006 preliminary capital, investment and exploration spending are as follows:

                                             2007        2006       Increase/
                                            Budget    Preliminary  (Decrease)

    Capital expenditures                   $3,886      $3,433         $453
    Cash investments in equity
     method investees                         107          17           90
    Exploration costs other than well costs   249         206           43
    Other                                     ---          15          (15)
      Capital, Investment and
       Exploration Spending                $4,242      $3,671         $571

Press Kit
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TRANSNAFTA
Public Relations Officer
Transnafta Towers
25 Profsoyusnaya Street
Moscow, 117036
Russian Federation
Emaiil: publicaffairs@zao-transnafta.ru