OAO LUKOIL BOARD OF DIRECTORS SUMMARIZED COMPANY’S RESULTS FOR THE FIRST HALF OF 2008

Friday, August 29, 2008

OAO LUKOIL held a meeting of the Board of Directors today in Moscow to summarize preliminary results of LUKOIL Group for the first six months of 2008, and to discuss budget and investment program implementation progress in the current year.

LUKOIL Group oil production came to 47.01 million tons, including 44.36 million tons in the Russian Federation and 2.65 million tons globally. Compared to the first six months of 2007, oil production dropped by 3.1%, of which 2.7 % account for the Russian companies. Decrease in oil production output in Western Siberia due to natural deterioration of mining and geological conditions became the main reason of oil production reduction in the Russian Federation.

LUKOIL Group commercial gas production came to 8.4 billion cubic meters. (which is 19.5% more as compared with the level of the first six months of 2007), including that in the Russian Federation, which came to 6.5 billion cubic meters. Commissioning of Khauzak-Shady field in Uzbekistan accounted for a twofold increase of commercial gas production in terms of the Company’s global projects. A 3.0% increase in commercial gas production in the Russian Federation was reached due to development of the promising Bolshekhetskaya Depression in Yamal-Nenets Autonomous District.

Measures aimed at increasing utilization of associated gas within the reporting period brought the utilization index in Russia to 73% as opposed to 68.7% for the same period in 2007.

Oil exports came to 19.2 million tons, which is 11.9% less than for the first six months of 2007. Given favorable domestic market conditions and a high oil refining margin, supplies to the Russian refineries of the Company and associated enterprises remained the most efficient oil distribution channel over the reporting period.

Thus, oil refining by LUKOIL enterprises increased by 8.0% and came to 27.2 million tons. The Russian enterprises of the Company (mini refineries included) refined 21.8 million tons of oil, with 5.4 million tons of oil stock refined overseas. At that, production of light petroleum products (gasoline, jet fuel, diesel fuel) increased by 8.4% as compared with the first six months of 2007.

The share of high octane gasolines in the total gasoline production amount came to 84.7 % across the Russian refineries of the Company (82.4 % for the first six months of 2007), with 89.2% (87.7%) across LUKOIL Group in general. Moreover, production of EURO standard compliant gasolines increased considerably, its share in the total gasoline output came to 67% (35.8% for the first six months of 2007) across all of the Company’s refineries, with 70.5% (16.8%) across the Russian refineries.

Retail marketing of oil products via marketing organizations of LUKOIL Group came to 6.7 million tons for the first six months of 2008, which is 17.2% more as compared with the same period of 2007. At that, marketing of oil products in Russia grew almost by 25% and came to 2.7 million tons.

Preliminary data for the first six months of 2008 suggest that LUKOIL Group paid over RUR 407 billion worth of taxes and duties to all levels of the Russian Federation budget, which is 58% higher than over the same period last year. The federal budget accounted for RUR 350 billion, or 86% of all budget payments across the LUKOIL Group.

The information in this press release is based on preliminary production data for the first half of 2008. The data may be further updated and adjusted as LUKOIL Group financial statements for the first half of 2008 are being prepared. Therefore, the specified data may differ from the production indicators which will be published along with the financial statements.