Oil Company LUKOIL Leonid Fedun Vice President 2001

Oil Company LUKOIL Leonid Fedun Vice President 2001 Oil and Gas Conference New Horizons London June 7 -8, 2001

II. Launching Pad for Future Growth

Strong Reserve Growth • Proven reserves up by 70% since 1995 Proven Oil & Gas Reserves BN BOE • Reserve growth has come from – Continued exploration – Targeted acquisitions • Reserve base continues to shift out of the higher cost Western Siberia – Accounts for only 53% of proven reserves today – International reserves account for nearly 20% of total proven reserves* *This includes estimated proven reserves in West Qurna Proven Oil & Gas Reserves Shift MM BOE

Consistent Production Growth 1. Crude production up every year since 1995 LUKOIL’s Production ‘ 000 BBL/day Int’l production as a % of LUKOIL’s total production 3. 0% 1. 33% increase over 5 year period 2. 0% 2. Annualized CAGR of 7. 9% 1. 0% 0. 0% 2. International production currently accounts for only 3% of total production 1. But growth rate is very high 2. Production outside of Russia has more than tripled from 1997 - 2000 Russia International

Improving Upstream Efficiencies • Marked improvement in operational efficiencies over the last 5 years Average Daily Flow Rate (W. Siberia) BBL/day 75 70 70 • Average flow rates up by 15% in West Siberia 65 61 60 55 1996 • Efficiencies achieved through - Shut in of marginal wells - Continuing shift to higher quality reservoirs - Increased application of new technologies 1997 1998 Oil Production MM BBL New Technologies Traditional Technologies 1999

Strong Growth in Refining • Refining output is up sharply 70% increase since 1995 Refining runs ‘ 000 BBL/day Int’l refining as a % of LUKOIL’s total production 30. 0% • International expansion has been key driver of our refining growth 20. 0% 10. 0% - Accounts for 2/3 of our growth over the last five years - Today accounts for nearly 40% of our refining throughput 0. 0% Russia International

International Downstream Assets LUKOIL’s Primary Refining Assets Operating Data LUKOIL has built a leading position in R&M in South Eastern Europe LUKOIL’s Primary European Refining Assets Refinery Petrotel (Romania) Neftochim (Bulgaria) Odessa Refinery Plant (Ukraine) Capacity MMTY Production MMTY Utilization % Ownership % 4. 7 10. 5 3. 8 1. 2 5. 3 0. 9 25. 53% 50. 48% 23. 68% 51. 00% 58. 00% 51. 90%

Advantaged International Assets Mediterranean Refining Margins 1995 - 2002 E • Strategically advantaged refineries • low-cost crude supply • able to sell product to export markets – Strong regional refining margins projected through 2002 • Cost savings being achieved through refinery optimization Urals Price 1995 - 2002 E • Upgrading underway to meet new EU specifications Morgan Stanley estimates

Management of International Operations Upstream - LUKOIL Overseas Holding: 1. Moscow based 2. Headed by Andrei Kuzyaev 3. Manages upstream projects OAO LUKOIL Overseas Holding (London - Moscow) outside of Russia Caspian Downstream - LUKOIL Europe Holding 1. London based 2. Headed by Ralif Safin 3. Manages European downstream assets Iraq Kazakhstan LUKOIL Europe Holding (London - Moscow) Safin European R&M USA R&M

World Class Reserves and Production • LUKOIL ranks as a world-class company in terms of reserves and production • Our expansion strategy will deliver greater international diversification on par with other oil majors 2000 Reserves (Billion BOE) Source: Company data 2000 Production (M BOE/d)

Strong Financial Growth 6 months, ended June 30 1998 1999 2000 US$ MM Total revenues 6, 619 7, 376 2, 890 6, 246 Operating profit (510) 1, 692 325 1, 887 Income before taxation 877 1, 249 108 1, 735 Net income 729 1, 062 92 1, 452 Cash and marketable securities 158 674 393 1, 024 2, 074 2, 497 2, 156 2, 705 9, 643 12, 503 10, 102 14, 634 752 1, 426 235 1, 688 (as of December 31/June 30) Financial debt (as of December 31/June 30) Total assets (as of December 31/June 30) Net cash provided by operating activities (before changes in the working capital)

Monitoring Key Ratios to Maximize Efficiency 6 months, ended June 30 1998 1999 2000 All data shown as %, unless otherwise noted Earnings per share, in US dollars 1. 15 1. 69 0. 14 2. 25 Return on sales 11. 0 14. 4 3. 2 23. 2 Return on assets 7. 6 8. 5 0. 9 9. 9 Return on equity 13. 1 15. 0 1. 6 16. 8 Sales on assets 68. 6 59. 0 28. 6 42. 7 ROACE 11. 0 13. 4 2. 4 31. 2 Net debt to net debt plus equity 25. 6 19. 5 23. 8 15. 3

Rational Deployment of Capital Annual Capital Expenditures • High rates of reinvestment are ensuring continued growth • Special emphasis placed on R&M investments over last three years • up by 35% • targeted at balancing production and refining capacity US$ MM

Proposed Dividend Payout and Share Swap LUKOIL Share Price Performance LUKOIL’s dividend payout has grown steadily over the last four years Last Twelve Months, US$ per share The proposed share swap will benefit all shareholders • Strong recent performance in the pref shares • Simplify share structure • More equitable distribution of future dividends LUKOIL Historical Dividend Payments US$ per share

II. Growth and Efficiency Strategic Overview

Upstream Strategy - Potential and Efficiency Growth 1. Continue steady production growth 1. Selective development of existing reserves 2. Opportunistic acquisitions 2. Lower production costs 1. Improve efficiencies in existing operations 2. Production expansion in lower cost regions (Timan Pechora, Caspian and Middle East) 3. Strengthen netbacks: Shifting production will. . . 1. lower transportation costs 2. increase proportion of sales in international market 3. improve quality of crude

Sustainable Growth Strategies Prospective Growth of Oil Production Timan Pechora 2000 - 10. 7 MM tons of oil 2010 -2015 Е - 20 -25 MM toe Western Siberia 2000 - 50. 8 MM tons of oil 2010 -2015 Е - 45 -50 MM toe; 30 -40 bn cubic m of gas European Russia Caspian region 2000 - 14. 2 MM tons of oil 2010 -2015 Е - 13 -15 MM toe 2000 - 2 MM tons of oil 2010 Е - 15 MM toe 2015 Е - 20 -25 MM toe Iraq 2010 Е - 15 MM tons of oil 2015 Е - 20 -25 MM toe

Downstream Strategy - Open New Markets Expansion into Central and South Eastern Europe R&M 1. Exploit advantage as the low-cost crude supplier to region 2. Capture strong Mediterranean refining margins 3. Benefit from projected demand growth in region 4. Improve efficiencies through optimising operations among our regional refining assets

Global Strategies: LUKOIL International Operations LUKOIL is active today in more than 20 countries Our main strategic assets are situated in • Western Siberia • Timan Pechora • The Caspian Basin • S. E. Europe • N. E. United States LUKOIL’s most recent discovery in the Yamal region of Siberia will position us to become a major gas exporter LUKOIL’s Principal Areas of Operation

Global Strategies: LUKOIL’s Regional Expansion LUKOIL is rapidly expanding its downstream and upstream operations into neighboring regions • Upstream: • Caspian • Kazakhstan • Middle East • Downstream: • Central Europe • Atlantic Basin LUKOIL is poised to become Russia’s first truly international oil major Downstream: Expansion into Central Europe and Atlantic Basin Upstream: Expansion into Caspian Kazakhstan and Middle East

Global Strategies: Why Expand Beyond Russia? 1. Reduce our exposure to “single market risk” 2. Exploit competitive advantages 1. Low cost crude supplier 2. Superior knowledge of markets and geology 3. Shift production to lower cost reserves 4. Expand R&M business in markets with higher product prices 5. Capture margins further down value chain in markets supplied by our crude

Global Strategies: New Markets Expansion into Atlantic Basin Marketing 1. Region will increasingly become net product importer 2. Upgrade our export-oriented refining assets to deliver to this market 3. Secure a market for future Timan Pechora production 4. Take market share from declining, higher-cost North Sea production 1. 2 MM BBL/day decline by 2010 North Sea Production MM BBL/day 2 MM BBL/ day decline in 2010

Setting and Achieving Targets Corporate Growth: 2001 - 2005 Crude Oil Production Not less than 15% Domestic Refining To 600, 000 - 700, 000 BBL/day International Refining To 300, 000 BBL/day Cost Control Lower than global average Sales US$20 - 25 bn @ $20/BBL Net Income US$3. 5 BN Capital Investment US$2. 5 -3 BN p. a. Dividends 15 -20% of net income

Leading the Way in Corporate Standards Creating Relative Value Among Peers • Commitment to upholding international corporate governance and transparency standards • Progressive dividend policy • Upholding minority shareholder rights – Shareholder rights charter • High-caliber international management team and ethical standards • Participation in educational and philanthropic programs • International sponsorship and brand-building

Predictability and Accountability Delivering for the Investment Community • LUKOIL has embarked on a regular process of reporting financial and operating results to the international financial community, which will include: – Interim publishing of US GAAP financial statements – By press release and over the web – Quarterly analyst conference calls for discussion of results – Semi-annual roadshows for discussions with investment community – Improved investor relations web site

LUKOIL’s Competitive Advantages • Russia’s most balanced integrated oil company – Growing downstream presence provides cushion from downward oil price movements • Superior asset base – Growing geographical diversification • International experience unique among peers – International mergers and acquisitions expertise – Shares are legitimate acquisition currency • Strategic foothold in the North American downstream market • Financial discipline and reporting standards to judge opportunities according to strict strategic and financial return standards

Sustainable Production Growth 1. Production growth well above the Russian average Crude Oil Production % of Russia’s total 1. Nearly a quarter of Russia’s 2000 production 2. Sustainable growth since the beginning of privatization (1995) Crude Oil Export Sales % of Russia’s total 2. Sustainable growth of the share in Russian crude exports

Macroconditions for Growth – Economic growth. GDP growth tendency is not less than 3 -4% p. a. Budget surplus. Growth of gold and currency reserves. Improved solvency and tax collection – Favorable market environment. Long-term supply and demand forecast under a regulating OPEC role shows that Russian crude oil price will be maintained at the level not lower than $18 -20/barrels. Convergence of domestic and international oil and petroleum product prices – Improvement of legislation. Stabilization of the PSA regime is in its final stage. Enhancement of taxation regime, including taxation regime for oil companies. Nondiscriminative access of oil companies to gas transportation facilities – Complications. Inflation growth. Low pace of structural reforms in Russia

LUKOIL’s International Operations. Case Study: Bulgaria • Operations launched in 1999. Largest refinery in the Balkans. Retail chain. 2001 revenues amounted to $1. 5 bn, an equivalent to 7% of GDP and 25% of tax revenues of the country • Active development of the Mediterranean markets (Turkey, Greece, Serbia, Macedonia and other countries) in the sphere of oil, petrochemical products and polymers. Annual sales growth by 3 -15% • Over 2 years Neftochem became profitable. $120 m of old debt was paid. Production of petroleum products in accordance with European standards. Output growth by 20%. Environmental safety • Attractive perspectives in terms of supplies of various types of products, including liquefied gas, in the Balkans and on the Black Sea. Raising of product quality to international standards. Joint integrated efficient development with Petrotel (Romania) and Odessa refinery (Ukraine)

Focus Regions of LUKOIL Overseas Holding participates in major projects in highly prospective hydrocarbon basins • Russia – JV mature production • Caspian & Kazakhstan – exploration – early production • Middle East – new ventures • North Africa – JV production MAP

Expanding Production Outside Russia Efficiency • Diversify E&P portfolio Geographic Breakdown of Production, MM tons/year • Find and develop new, lower cost reserves • Exploit LUKOIL’s competitive advantages – regional expertise – advantaged logistics • Mitigate “single market risk” Goal: Increase share of international efficient projects in LUKOIL’s production portfolio

Strategic Interest in Getty Petroleum Marketing n Upon completion of Timan-Pechora and its associated refinery, LUKOIL plans to deliver gasoline to the United States East Coast — The sale of gasoline directly through controlled sites could enhance profit margins by 18 to 20% n Getty Petroleum Marketing ("GPM") key strategic strengths: — Over 1 billion gallons of annual gasoline sales — 1, 300 retail sites in the northeastern United States — Strong brand recognition — Significant n market share in core urban areas The acquisition of GPM is expected to be the beginning of a significant expansion in the eastern U. S. retail market

GPM: Growth Strategy n n Ancillary Business Expansion — Formalize, modernize and revitalize “other uses” — New revenue streams — Mitigate earnings volatility — Support volume growth Discretionary Spending — Internal growth — Image upgrade — Improve customer experience — Attractive return characteristics Acquisitions — Ample opportunities — Increase utilization of distribution capacity more quickly Capitalize on Parent Company Resources

LUKOIL Going Global AGENDA 1. Introduction 2. Update on Company Strategy 3. Focus on International Growth 1. Upstream: Former Soviet Union and Middle East 2. Downstream: Eastern Europe and Atlantic Basin 4. Growth Targets 5. Update on Other Recent Developments 6. US GAAP Financials 7. Dividend and Proposed Preference Share Conversion 8. Corporate Governance Initiatives