OIL AND GAS WEEKLY. Topic of the week. Week ahead. Ideas for this week. Contents: Companies mentioned

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1 MAR 15 MAY 15 JUL 15 SEP 15 NOV 15 JAN 16 MAR 16 GAZPROM 37 GAZPROM 28 GAZPROM 34 ROSNEFT 22 SIBNEFT 22 TNK 2 SIBNEFT 23 GAZPROM GAZPROM 21 LUKOIL 22 GAZPROM LUKOIL 2 LUKOIL 23 GAZPROM 2 NOVATEK 21 NOVATEK 22 LUKOIL 19 GAZPROM 19 EDC 2 LUKOIL 18 GAZPROM 18 ROSNEFT 17 LUKOIL 17 TNK 16 TNK 18 TNK 17 NOVATEK 16 GAZPROM 16 NOV TRANSNEFT 18 SIBUR 18 GAZPROM 16 MAY APRIL 1, 216 Topic of the week Lukoil 215 IFRS preview switch from US GAAP to IFRS In this issue of Oil and Gas Weekly, we preview the 215 IFRS results from Lukoil. The company this year is reporting unexpectedly late last year the report came out almost a month earlier. The reason is the company s switch from US GAAP reporting to IFRS. Lukoil is also changing its reporting currency from dollars to rubles, with the 214 numbers to be restated accordingly. In our view, there will be no large impact on the historical numbers. As we understand, there are relatively few significant differences between IFRS and US GAAP. Those differences include approaches to impairment, deferred tax accounting, depreciation, interest capitalization and business combination reporting. In fact, we expect few changes before the EBITDA line, with the main effect potentially being seen on the bottom line. As Lukoil s 4Q bottom line is usually unpredictable (in 4Q14 the company reported a net loss due to impairment charges), the largest reporting surprise may fall on this line. To recap, in 211, TNK-BP switched from US GAAP to IFRS, which impacted quarterly net profit by no more than 9%. We will focus instead on the FCF number, which should be in positive territory. We expect a slight increase in leverage metrics following the switch to rubles, as LTM EBITDA will be slightly less due to ruble depreciation. Still, the metric should not exceed 1.x, we estimate, nor should it lead to a significant reaction in the company s bonds. Dividends and the capex outlook, as well as the potential privatization of Bashneft, will be in focus during the meeting with Lukoil management, which will take place the same day, April 4. Week ahead Aside from Lukoil, EDC may reports 215 results next week. On Monday, CDU TEK will report preliminary O&G production and export numbers for March. Alexander Nazarov +7 (495) Alexander.Nazarov@gazprombank.ru Evgenia Dyshlyuk +7 (495) (ext ) Evgenia.Dyshlyuk@gazprombank.ru Evgeniy Khilinskiy +7 (495) (ext ) Evgeniy.Khilinskiy@gazprombank.ru Contents: Trading ideas summary... 2 Topic of the week... 3 Week in review... 6 International markets... 9 Equity valuation Fixed Income valuation Equity relative performance Calendar of events Companies mentioned Lukoil Tatneft Bashneft Rosneft Ideas for this week Equity. We would stay away from O&G equities in anticipation of a correction in the oil price. Debt. We reiterate our idea to BUY RUSSIA42 SELL GAZPRU37. For details please see the next page. Charts of the week Lukoil vs. RIOB index performance Russian O&G segment G-spreads, WoW 4 BPS LUKOIL RIOB INDEX Source: Bloomberg, Gazprombank estimates Source: Bloomberg, Gazprombank estimates 1

2 WEEKLY TRADING IDEAS SUMMARY Equity COMPANY TICKER CURRENT PRICE IDEA Fixed Income IDEAS We reiterate our idea to BUY RUSSIA42 SELL GAZPRU37. The respective spread of 97 bps is below 12M lows for no apparent fundamental reason. We believe that the 6M average level of 13 bps is fair. We are focusing on the GAZPRU37, as the GAZPRU37 GAZPRU34 spread is also currently near 12M lows. 2

3 TOPIC OF THE WEEK Lukoil: 215 report preview switch from US GAAP to IFRS In this issue of Oil and Gas Weekly, we preview the 215 IFRS results from Lukoil. The company this year is reporting unexpectedly late last year the report came out almost a month earlier. The reason is the company s switch from US GAAP reporting to IFRS. Lukoil is also changing its reporting currency from dollars to rubles, with the 214 numbers to be restated accordingly. In our view, there will be no large impact on the historical numbers. As we understand, there are relatively few significant differences between IFRS and US GAAP. Those differences include approaches to impairment, deferred tax accounting, depreciation, interest capitalization and business combination reporting. In fact, we expect few changes before the EBITDA line, with the main effect potentially being seen on the bottom line. As Lukoil s 4Q bottom line is usually unpredictable (to recap, in 4Q14 the company reported a net loss due to impairment charges), the largest reporting surprise may fall on this line. We expect Lukoil s RUB-denominated revenues to decline 4% QoQ in 4Q15 to RUB 1,421 bln, with the main effect coming from a decrease in European product prices toward quarter end. At the same time, we are looking for a less negative impact on EBITDA due to a negative pricing lag, which may be partially compensated by hedging operations, which we estimate could bring some $44 mln to Lukoil in 215. EBITDA will likely decrease 22% QoQ to RUB 146 bln, but the margin should be slightly higher than a year ago, as price movements were not so sharp. Cash flow will be more interesting, as Lukoil reported very strong FCF in 3Q15. Our base forecast assumes marginally positive FCF in 4Q15, but we see big upside risk on the back of compensation from Iraq. FCF will be our focus in the report. Lukoil quarterly financials, RUB 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15E E YOY IFRS, RUB MLN Revenues % EBITDA % EBITDA margin 13% 15% 15% 9% 12% 13% 16% 13% 13% 13% Net profit % OCF % Capex % FCF % Net debt Net debt/ltm EBITDA, RUB,84,84,77,81,9,84,9 * actual numbers are US GAAP, recalculated at average quarterly USDRUB rates Source: company data, Gazprombank estimates TNK-BP case effect is not large and mainly involved deferred tax To recap, in 211, TNK-BP switched from US GAAP to IFRS reporting, which impacted quarterly net profit by no more than 9%. In the presentation devoted to its 211 results, TNK-BP International disclosed the effect of the switch from US GAAP to IFRS on two quarters (see charts below). 3

4 1Q11 US GAAP DT RECALCULATION SLAVNEFT IFRS RESTATEMENT OTHER 1Q11 IFRS 4Q11 US GAAP IMPAIRMENT DT RECALCULATION SLAVNEFT IFRS RESTATEMENT OTHER 4Q11 IFRS APRIL 1, 216 In fact, the main differences in 1Q were attributable to deferred tax calculation, whereas in the 4Q figures the main difference involved the impairment charge. Slavneft s restatement was another material effect. Lukoil has no JVs or business combinations that could have the same material effect on its financial statements. TNK-BP 1Q11 net income, IFRS vs. US GAAP TNK-BP 4Q11 net income, IFRS vs. US GAAP $ BLN 7% 1% 1% $ BLN 2% 1% 1% 1% Source: TNK-BP Source: TNK-BP Leverage to increase due to switch to ruble as reporting currency We also expect a slight increase in leverage metrics following the switch to rubles, as LTM EBITDA will be slightly lower due to ruble depreciation (the average rate used for EBITDA translation is smaller than the YE rate used for debt). Still, the metric should not exceed 1.x, we estimate, nor should it lead to a significant reaction in the company s bonds. That said, the company remains the least leveraged in the CIS eurobond universe. We note Lukoil s excellent liquidity. As of end 3Q15, the company had short-term debt of $1.37 bln and a cash pile of $4 bln, well covering debt repayments over the next 24 months. Moreover, the company had ~$2 bln available in committed back-up facilities. Given positive (or at least neutral) FCF anticipated in 4Q15, we do not expect any adverse change in the liquidity position. The maturity profile remains smooth: loans totaling $6.5 bln range from 215 to 224, while the $5.6 bln in eurobonds mature evenly in To recap, Lukoil is the only investment-grade name in the Russian O&G universe. Lukoil net debt/ltm EBITDA dynamics Q14 1Q15 2Q15 3Q15 4Q15E NET DEBT/LTM EBITDA, $ NET DEBT/LTM EBITDA, RUB Source: company data, Gazprombank estimates 4

5 Dividends, capex and Bashneft privatization to be in focus during conference call Dividends and the capex outlook, as well as the potential privatization of Bashneft, will be in focus during the meeting with Lukoil management, which will take place the same day, April 4. To recap, based on decent FCF generation in 9M15 and the management s comments, we assume that Lukoil will attempt to maintain dividend growth in 215. We estimate final dividends at RUB 1 per share, with total dividends for 215 thus amounting to RUB 165 per share. Regarding capex guidance, our base case estimate stands at $7 bln. To recap, Lukoil CEO Vagit Alekperov said that a $3/bbl scenario for the company would imply capex of approximately $6.5 bln. As we assume a slightly higher average oil price, we are looking for slightly higher capex. Finally, although we do not expect to hear anything from Lukoil during the management meeting regarding a possible government decision on the date and pricing of Bashneft s privatization, we would welcome any comments regarding Lukoil s position on the potential purchase of a non-controlling stake, as well any potential synergies from a deal. Lukoil dividends, RUB per share E INTERIM FINAL Source: company data, Gazprombank estimates 5

6 WEEK IN REVIEW Oil news The Brent price was broadly flat over the past week at $4/bbl, with a correction during the first half of the week shifting to an uptrend on Wednesday in response to US crude inventory data. The week is ending with Brent trading at around $4/bbl. KEY CORPORATE NEWS Tatneft might pay RUB 1.96 per share for 215. Neutral News. Tatneft published RAS results for 215. As the company pays dividends equal to 3% of net income, the RAS figure is important. The company s net income in 215 rose 3.6% to RUB 85 bln. Effect on company. Thus, the dividend may likewise increase 3.6% and amount to RUB 1.97, or slightly below our expectation of RUB 12. and compared with the Bloomberg consensus of RUB 11.4 per share. Moreover, we remind that in January Tatneft s main shareholder announced a 35% YoY rise in pre-tax income. TICKER ATAD LI GAZP RX Target price $32.1 RUB 21.2 Closing price $31.8 RUB Recommendation UNDERWEIGHT OVERWEIG Upside 1% 36% Ratings -/Ba1/BBB- BB+/Ba1/BB Source: Bloomberg The dividend yields might total 3% and 6% on common and preferred shares, respectively. Traditionally we anticipate the cut-off date to be set for mid-july. Moreover, Tatneft revealed in its report that in March the company completed the deal to acquire 24.99% of common shares of Nizhnekamskneftekhim (NKNC) and 9% of common shares of TANECO for a total sum of RUB 2 bln. We note that this sum is below even the current market value of the stake in NKNC (~RUB 21 bln) and barely exceeds its 6M average value (RUB 18.8 bln). Thus, we consider the valuation of the assets as part of the deal as low, which undoubtedly is positive for Tatneft s cash flows. However, we await details regarding the deal from the company s management during the results conference call, which we expect to be held in the coming days. Effect on shares. The size of the dividends is less than expected and the yield on common shares is small. Moreover, the price of the deal to acquire NKNC and TANECO shares is low, in our view. The overall effect on Tatneft shares is neutral. Tatneft 215 IFRS review. Downgrade on FCF outlook, valuation News. Tatneft reported IFRS results for 215. Effect on company. The P&L numbers were broadly in line, with EBITDA down just 1% QoQ. This was better than the figures from Bashneft and Gazprom Neft, probably on higher than expected volumes. Revenues were up 3% QoQ, while the bottom line decreased 16% QoQ. The company s cash flow was disappointing. Tatneft started to heavily invest in the second stage of TANECO refinery, with capex in 4Q (some 33% of full-year capex) totalling RUB 32 bln. Quarterly FCF was zero for the first time in the past three years. The price paid by Tatneft for the privatized stakes in Nizhnekamskneftekhim and TANECO is not negative by any means Tatneft may easily accrue profits on the NKNC stake already in 1Q16, as the purchase price is below the current market price. However, to recap, the privatization list also includes a 4% stake in Tatneft, which may also be sold at a discount. Tatneft will hold a conference call to discuss the results on Monday, April 4. To recap, the capex outlook will be the key topic during the call. Investors will also be interested in the rationale behind the purchase of NKNC, as well the low purchase price.. TICKER ATAD LI GAZP RX Target price $32.1 RUB 21.2 Closing price $31.8 RUB Recommendation UNDERWEIGHT OVERWEIG Upside 1% 36% Ratings -/Ba1/BBB- BB+/Ba1/BB Source: Bloomberg Effect on shares. We see no further upside for Tatneft shares based on zero expected FCF in on the back of TANECO construction, the relatively low dividend yield (lower than most blue chips in the sector), the expected tax hike and a premium 6

7 valuation (Tatneft trades at 216E EV/EBITDA of 4.4 the highest level among Russian oils). We therefore downgrade Tatneft common shares to UNDERWEIGHT and the preferred shares to NEUTRAL. Tatneft 4Q15 IFRS preview, RUB mln 4Q15E 3Q15 4Q14 QOQ YOY Revenues 138, , ,959 3% -9% EBITDA 3,896 34,365 23,43-1% 32% EBITDA margin 22.3% 25.5% 15.3% Net income 19,627 23,272 18,643-16% 5% Net margin 14.2% 17.3% 12.2% Source: company data, Gazprombank estimates SurgutNG dividends on prefs may total RUB Neutral News. SurgutNG published RAS results for 215. Effect on company. To remind, the company pays a fixed percentage of RAS net income as dividends on preferred shares. Net income totaled RUB 751 bln, which, according to our estimates, implies a dividend for 215 of RUB 6.92 per preferred share, yielding 15.5%. TICKER SNGSP RX GAZP RX Target price RUB 4.5 RUB 21.2 Closing price RUB 45. RUB Recommendation NEUTRAL OVERWEIG Upside -1% 36% Source: Bloomberg On commons, we expect a dividend at the level of last year, i.e. RUB.65 per share, yielding 2.%. The company s cash pile, we estimate, totaled RUB 2.42 trln ($33.2 bln) as of end 215 ($32.4 bln as of end 9M15). Effect on shares. We consider the news as neutral, as these dividend levels are already priced into the market, in our view. Rosneft 4Q15 IFRS results: better than expected EBITDA and FCF News. Rosneft released 4Q15 and 215 IFRS results there were stronger than expected on the EBITDA and FCF levels.. Effect on company. Revenues of RUB 1,196 bln ($18.1 bln), down 7.7% QoQ, were in line with our and market expectations. We note that there was a reclassification: the item gain/loss from hedging, previously included in revenues, was moved from the top line to below the EBITDA line. EBITDA of RUB 25 bln ($3.8 bln), down 8.8% QoQ, was substantially higher than our forecast (RUB 21 bln) and the market consensus (RUB 223 bln). The EBITDA margin remained unchanged from the 3Q15 level at 21%, while we expected deterioration in margins. The main factor that supported profitability was lower QoQ other than income taxes (MET and export duties). Net income to shareholders of RUB 53 bln (~$8 mln), down 52.7% QoQ, was in line with market expectations. The bottom line was adversely affected by a net loss from hedging, a higher effective income tax rate, and other factors. Another surprise was lower than forecast capex in 4Q15: cash capex stood at RUB 186 bln ($2.8 bln), up by around 33% QoQ. This brings total cash capex for the full year to RUB 595 bln ($9.5 bln) vs. RUB bln expected. As a result of higher than expected EBITDA and moderate capex, FCF came in above our forecast, at RUB 26 bln ($3.1 bln), up 32.1% QoQ. Net leverage (net debt/ebitda) as of end 215 remained unchanged from 9M15, standing at 1.8х, while total leverage decreased by.2х to 2.9х. We note, however, that TICKER ROSN RX GAZP RX Target price RUB RUB 21.2 Closing price RUB 35.2 RUB Recommendation NEUTRAL OVERWEIG Upside 1% 36% Ratings BB+/Ba1/- BB+/Ba1/BB Source: Bloomberg 7

8 if we use the principles common to rating agencies and classify prepayments under longterm contracts on oil supplies as debt, the company s net leverage would reach 3.4х (vs. 3.7x for 9M15 and 3.6х for 214). The share of FX debt in Rosneft s debt portfolio structure stands at 89%, while that of export revenues in 215 amounted to 75%. We also note the company s strong liquidity position. In 216, Rosneft must repay $14.3 bln in debt, which can be more than covered by the company s current cash of $19.2 bln (RUB 1.3 trln on accounts and short-term deposits). In addition, more than $1.7 bln (RUB 112 bln) has been held on the company s deposits for more than one year Effect on bonds. The strengthening of the credit portfolio and liquidity position is positive for the company s bonds, although upside potential is limited, in our view. The ROSNRM22-GAZPRU22 spread stands at 12 bps, while Gazprom s net leverage is far lower (1.1х). We still regard a premium of around 25 bps as justified. The ROSNRM22 s spread to the sovereign RUSSIA22 currently stands at 149 bps, the lowest level YTD. Borets reports 215 IFRS results. EBITDA declines, debt burden rises, as expected News. Borets reported IFRS results for 215 and held a conference call. Effect on company. Revenues in USD terms decreased 28% YoY in 215 to $522 mln. The decline in RUB-based revenues was due to exchange rate differences (revenues in RUB terms increased 16%), while that of foreign-based revenues stemmed from volumes. The main fall in foreign-based revenues related to the US (-28%, $18 mln) and Venezuela (-5%, $18 mln), which is concerning, as almost all of the company s debt is FXdenominated. EBITDA fell to $131 mln, while the EBITDA margin increased 5 pps to 25%. OCF also dropped, by 29% to $32 mln, while FCF totaled $17 mln (-3%).The net debt burden increased to 2.95x from 2.4x in 214. Bond TICKER BORFIN GAZP RX Ratings BB-/B1/- BB+/Ba1/BB Source: Bloomberg The liquidity position as of year end totaled $63 mln (vs. $75 mln in 214). Debt payments (in ) until September 218 (the maturity date for $412 mln in eurobonds) amount to $32 mln. Effect on bonds. Despite the negative dynamic, the deterioration in financial and debt indicators was overall expected, while the increase in operating efficiency and revenues from operations in Russia (the company s main market) partially compensate for the negative aspects. The company s BORFIN18 bond (YTM 13.86%) showed no reaction to the report. The slight narrowing of the spread to the sovereign RUSSIA18 (3.2%) over the past few days to 1,66 bps from 1,74 bps overall corresponds to the market dynamic. 8

9 INTERNATIONAL MARKETS Another double-digit decline for US rig count The overall US drilling rig count dropped 12 units to 464 units working during the week ended March 24, shortened by the Good Friday holiday, according to Baker Hughes data. During this year s first 12 weeks, the count has dropped by double digits in all but two weeks. The overall count has now fallen for the 29th time in the past 31 weeks, continuing a slide that has resulted in new lows in recorded data. Since a predrilling-dive peak of 1,92 on December 5, 214, the count has plunged 1,456 units. EIA: Well costs have fallen up to 3% since 212 Well costs at some of the largest onshore plays fell by as much as 3% over the past three years, according to a new report commissioned by the US EIA. The report, published Wednesday, found that average well drilling and completion costs in five onshore areas declined by 25-3% from 212 to 215. The study was completed by Houston-based IHS Global and focused on activity in the Bakken, Eagle Ford and Marcellus plays as well as the Midland and Delaware plays within the Permian Basin. The report found that nominal frac pumping costs have fallen by more than 4% since peaking in 212, even though the number of pumping stages has grown from an average of 2 stages to about 25 stages. Declining crude prices and a growing supply glut helped push total well costs down by an estimated 15-18% in 215 from average 214 levels. Total well costs are expected to fall by another 3-5% in 216. Rig rates dropped by an estimated 25-3% last year compared to 214 levels and are expected to fall by 5-1% in 216 before climbing 5% in 217 and 218. Frac equipment and crew costs also declined by nearly a third from 214 levels and are expected to fall in tandem with declining rig rate costs over the next two years. The report also found that additional efficiencies will further drive down cost measured in dollars per barrel of oil equivalent by 7-22% during the next two years. Saudi Arabia loses oil market share to rivals in key nations The world s biggest oil exporter lost ground to rivals in nine out of 15 top markets between 213 and 215, including China, South Africa and the US, according to an analysis of customs data. Saudi Arabia set itself a goal in late 214 of maintaining its crude market share amid a glut that prompted a collapse in oil prices, but the imports data compiled by FGE, an energy consultancy, suggest the country s strategy suffered setbacks in some of its key customer countries last year. Other data show that Saudi Arabia achieved a limited increase in global market share in 215 compared to 214, although last year s figure was lower than that recorded in 213. Saudi Aramco, the state-controlled energy company that is implementing the oil ministry s strategy, has raised production to more than 1 mln bpd since the OPEC meeting. Saudi exports have held above 7 mln bpd. Since late 214, Saudi officials have repeatedly made the case for maintaining crude market share and sacrificing short-term oil revenue, saying the kingdom would not subsidize higher-cost rivals, including US shale operators, by reducing production. But FGE s data shows Saudi Arabia s share of total Chinese oil imports fell from more than 19% in 213 to almost 15% in 215, because of increased supplies from Russia. 9

10 Saudi Arabia s share of South African imports dropped sharply during this period, from almost 53% to 22%, as Nigeria and Angola increased their shipments. Meanwhile, the US shale oil boom reduced the country s need to buy crude from overseas. Saudi Arabia s share of US imports fell from 17% to almost 14% between 213 and 215. Over the three years, Saudi Arabia also lost ground in South Korea, Thailand, Taiwan and several West European countries. Saudi Arabia remains the largest oil supplier to many countries including China, however, and it secured crude market share gains in Brazil, India and Japan between 213 and 215. Saudi crude exports represented 8.1% of global oil demand excluding the kingdom s own needs in 215, compared to 7.9% in 214. The equivalent figure for 213 was 8.5%. Chinese company buys stake in Santos Chinese gas distribution group, ENN Group, is to buy an 11.7% stake in Australian gas company, Santos, from Hony Capital for $75 mln. The acquisition marks the company s first exposure to the upstream gas sector. Over the past 15 years, ENN Group s natural gas sales volumes have grown by a CAGR of 47%, establishing the company as the largest private natural gas company in China. It supplies natural gas to more than 12 mln households in 152 cities across China, as well as 56, industrial and commercial users. The company also operates a network of 576 LNG and compressed natural gas refueling stations, distributing 1.88 mln tonnes of LNG annually 2% of the LNG trade volume in China. It is building China s first private LNG receiving terminal in Zhoushan, Zhejian Province, to receive imported gas. As part of the deal, Hony Capital will become ENN s A-share listed company through a private placement of new shares, equivalent to $38 mln. Santos welcomes the deal and the knowledge of China s gas industry that ENN Group would bring. The Australian company is one of the most experienced coalbed methane (CBM: called coal seam gas in Australia) operators in the country with operations in the Surat and Bowin Basins of Queensland. Santos is also a partner with Malaysia s PETRONAS and France s Total in the Santos GLNG project, which feeds CBM to a two-train LNG plant on Curtis Island, Queensland, via a 42 km pipeline. First LNG production occurred in September 215 with its first shipment reaching South Korea in October. Schlumberger, Cameron merger wins Chinese approval Chinese antitrust regulators have approved the pending $14.8 bln merger between Houston-based Schlumberger and Cameron International. The companies said Monday that the Chinese Ministry of Commerce (MOFCOM) has cleared their proposed merger without any conditions. The approval is the last major closing condition for the proposed merger. The companies expect to close the transaction on April 1, 216. Closing remains subject to the satisfaction or waiver of the remaining closing conditions contained in the merger agreement. Schlumberger agreed in August to acquire Houston-based equipment firm Cameron in a stock and cash transaction. Under the terms of the agreement, Cameron shareholders will receive.716 shares of Schlumberger common stock and a cash payment of $14.44 in exchange for each Cameron share. Schlumberger expects to realize $3 mln in pretax synergies in the first year following the acquisition and expects $6 mln in synergies the second year after the deal closes. On a pro forma basis, the combined company had 214 revenues of $59 bln. 1

11 PetroChina reports 7% drop in 215 profits China's biggest state-owned oil and gas producer, PetroChina, reported a near 7% fall in net profit for 215, in line with earlier guidance. Like many other major oil companies, PetroChina's profits have been hit by the fall in oil prices over the past year. Net profit totaled CNY bln ($5.46 bln; GBP 3.85 bln) in 215, down from CNY bln the year before, the company said. PetroChina is one of the world s largest oil firms. Based in Beijing, it is the listed arm of state-owned China National Petroleum Corporation (CNPC). CNOOC profits plunge on lower oil prices The 215 net profit figure of China's largest offshore oil and natural gas developer slumped 66.4% YoY due to lower oil prices. China National Offshore Oil Corporation (CNOOC) earned net income of CNY 2.2 bln ($3.1 bln) last year, with earnings per share standing at CNY.45, according to the company's annual report. The company's net production rose 14.6% YoY to mln boe, but revenues dropped 32.8% to CNY bln. The average price of oil sold by CNOOC fell 46.6% YoY to $51.3/bbl, while that of natural gas slipped.8%, the report said. 11

12 3-yr CAGR Net income 3-yr CAGR EBITDA P/E 16 EV/Reserves APRIL 1, 216 EQUITY PERFORMANCE Equity weekly performance, in USD, % change Tatneft SurgutNG Gazprom neft Bashneft Lukoil Rosneft Transneft Novatek.% 1.6% 1.9% 2.2% 3.% 2.7% 3.6% -1% 1% 3% 5% 5.2% Gazprombank recommendations GPB RATING TARGET PRICE, RUB/$ CLOSING PRICE, RUB/$ UPSIDE Russian oil companies Bashneft N 2323, 261, -11% Lukoil OW 2935,9 2622, 12% Rosneft N 311,7 35,2 2% Surgutneftegas UW 31,8 39,7-2% Gazprom Neft OW 21,2 149,8 34% Tatneft ADR UW 32,1 31,8 1% Preferred shares** Bashneft pref N 1861, 1852,5 % SurgutNG N 4,5 45, -1% Tatneft N 217, 23,4 7% Russian gas companies Gazprom OW 21,2 147,8 36% NOVATEK OW 11, 89,9 22% Russian pipeline companies Transneft pref UW 7639, 1844, -59% Source: Bloomberg (as of March 31) Source: Gazprombank estimates, Bloomberg (as of March 31) Financial valuation Operational valuation PetroChina Chevron 3 25 EM EM Petrobras BP ConocoPhillips ExxonMobil RD Shell Total Novatek SurgutNG Lukoil Rosneft Bashneft Tatneft Russian oils Gazprom 1 3 Gazprom 5 Neft EV/EBITDA 16 DM Chevron RD Shell ExxonMobil PetroChina DM Total Petrobras BP Russian oils ConocoPhillips 5 Bashneft Gazprom Neft Rosneft Novatek SurgutNG Lukoil Tatneft Gazprom EV/Production 14 Source: Gazprombank estimates, Bloomberg (as of March 31) Source: Gazprombank estimates, Bloomberg (as of March 31) EBITDA growth valuation Net income growth valuation 15% 1% 5% % -5% -1% -15% -2% -25% -3% -35% Lukoil Rosneft Novatek SurgutNG Bashneft Tatneft Gazprom Petrobras RD Shell Gazprom Neft PetroChina Total ExxonMobil BP Chevron ConocoPhillips EV/EBITDA 16 4% Novatek 2% Rosneft Bashneft Lukoil Gazprom % Neft Tatneft Gazprom BP -2% SurgutNG Total -4% RD Shell -6% -8% -1% -12% -14% -16% -18% ConocoPhillips Petrobras ExxonMobil Chevron PetroChina P/E 16 Source: Gazprombank estimates, Bloomberg (as of March 31) Source: Gazprombank estimates, Bloomberg (as of March 31) 12

13 EQUITY VALUATION GPB RATING RUSSIAN OIL COMPANIES CLOSING PRICE, $ MARKET CAP, $ MLN PERFORMANCE, $ EV/EBITDA P/E EV/PRODUCTION EV/ 5D 1M YTD RESERVES Bashneft N 2,61. 7,383 3% 11% 42% % Gazprom Neft OW ,563 3% 13% 5% % Lukoil OW 2, ,179 2% 9% 2% % Rosneft N ,121 2% 18% 29% % SurgutNG UW ,258 4% 13% 23% % Tatneft UW ,147 5% 25% 2% % Average % RUSSIAN GAS COMPANIES Gazprom OW % 17% 15% % NOVATEK OW % 3% 7% % Average % RUSSIAN PIPELINE COMPANIES Transneft pref UW 184, % 15% 5% n/a n/a n/a.4% PREFERRED SHARES Bashneft N 1, % 11% 16% n/a n/a n/a n/a n/a n/a n/a 7.9% DIVIDEND YIELD, 21 SurgutNG N 45. 5,152 4% 13% 1% n/a n/a n/a n/a n/a n/a n/a 15.4% Tatneft N % 22% 13% n/a n/a n/a n/a n/a n/a n/a 6.4% Average n/a n/a n/a n/a n/a n/a n/a 9.9% EMERGING MARKET OILS PetroChina n/r.7 22,15-4% 4% % % Petrobras n/r ,5 11% 81% 36% % Kunlun n/r.9 6,891 3% 22% -3% % Sinopec n/r.6 87,61 3% 18% 8% % YPF n/r ,25 1% -1% 3% % CNOOC n/r ,531 % 15% 12% % PTT EP n/r 2. 7,875 6% 5% 25% % ONGC n/r ,52 1% 14% -1% % SasolLtd n/r ,443 2% 11% 1% % MOL n/r 6.1 6,284 4% 23% 21% % Average % DEVELOPED MARKETS MAJORS BP n/r ,772-1% 4% -4% % Chevron n/r ,653 1% 14% 6% % ConocoPhillips n/r ,869 1% 19% -14% neg neg % ENI n/r ,986 % 7% 1% % ExxonMobil n/r ,129 % 4% 7% % RD Shell n/r ,47 1% 6% 6% % Statoil n/r ,176-1% 8% 11% % Total n/r ,835 % 1% 1% % Average % Source: Gazprombank estimates, Bloomberg (as of March 31) 13

14 OCT 13 DEC 13 FEB 14 APR 14 JUN 14 AUG 14 OCT 14 DEC 14 FEB 15 APR 15 JUN 15 AUG 15 OCT 15 DEC 15 APRIL 1, 216 FIXED INCOME SUMMARY Russian O&G majors capital structure EM O&G debt-relative valuation, as of February, 8 1% 8 Z-SPREAD, BPS 8% 6% 4% 2% % GAZPROM ROSNEFT LUKOIL GAZPROM NEFT NOVATEK BASHNEFT TRANSNEFT RUBLE BONDS EUROBONDS BANK LOANS AND OTHER INDEBTEDNESS EQUITY Source: companies, Gazprombank estimates Lukoil 22 EDCLLI 2 NVTKRM 22 GAZPRU SOIAZ 23 SIBNEF ROSNRM PEMEX KZOKZ 21 SIBUR 18 NET DEBT/ LTM EBITDA Source: companies, Bloomberg, Gazprombank estimates Russia O&G eurobonds weekly top 3-5Y movers (Z-spreads to MS) Russia O&G eurobonds weekly top >5Y movers (Z-spreads to MS) Gazprom 19C Lukoil 23 Gazprom 2P Gazprom 28 Gazprom 21E Gazprom 34 Gazprom 2E Gazprom 25E Lukoil RosNeft 22 Source: Bloomberg, Gazprombank estimates Source: Bloomberg, Gazprombank estimates EM O&G primary market 1 USD BLN % 6% 45% 3% 15% % EM O&G latest deals Date COMPANY RATINGS M/S/F COUNTRY CRNCY VOLUME, USD MLN TENOR COUPON BHARAT PETROLEUM -/Baa3/BBB- INDIA USD ,% KUNLUN ENERGY A+/A1/A CHINA USD ,9% KUNLUN ENERGY A+/A1/A CHINA USD ,8% PT MEDCO ENERGI NR INDONESIA SGD ,9% PETROBRAS Ba2/BBB-/BBB- BRAZIL USD ,9% ECOPETROL Ваа2/ВВВ/ВВВ COLOMBIA USD ,4% KOREA GAS A+/Aa3/AA- KOREA USD 5 1 3,5% RENAISSANCE SERVICES NR OMAN USD 125 Perpetual 7,9% PETROLEOS MEXICANOS BBB+/A3/BBB+ MEXICO USD ,5% CHINA OILFIELD SERVICES LIMITED CHINA OILFIELD SERVICES LIMITED A3/A-/A CHINA USD 5 5 3,5% A3/A-/A CHINA USD 5 1 4,5% RELIANCE INDUSTRIES NR INDIA USD ,5% PRIMARY O&G DEALS SHARE OF TOTAL DEALS (RHS) Source: Bond Radar, Gazprombank estimates KOREA NATIONAL OIL CORP AA-/Aa3/AA- KOREA USD 6 1 3,3% GAZPROM BB+/Ba1/BBB- RUSSIA EUR ,6% PETROLEOS MEXICANOS BBB+/A3/BBB+ MEXICO CHF ,5% YACIMIENTOS PETROLIFEROS FISCALES -/Caa1/CCC ARGENTINA USD 1 3 8,9% Source: Bond Radar, Bloomberg, Gazprombank. estimates 14

15 YIELD, % YIELD, % APRIL 1, 216 FIXED INCOME VALUATION Russian oil and gas: local and E/C bonds universe 12. Transneft-3 OFZ Curve 11.5 GazpNeft-11 Rosneft-9 Gazprom-21bo BashN-1 GazpNeft BashN-2 Transneft-3bo BKE BashN-6 Rosneft-6 GazpNeft-2bo Novtk17R GazpNeft-7bo GazpNeft-1 BashN-8 Rosneft-5 Rosneft-7 Rosneft-1 Rosneft-4 GazpNeft-12 GazpCap-5 GazpCap-4 Rosneft-8 BashN-7 GazpNeft-2bo GazpNeft-7bo 1. BashN-3 BashN DURATION, YEARS Russian oil and gas: USD eurobonds universe YIELD TO MATURITY YIELD TO PUT YIELD TO CALL BOND^ SUBORDINATED Source: Bloomberg, Gazprombank estimates Gaz34 Gaz37 UST Curve SibNft23 SibNft22 Gaz Novtk22 Novtk21 RosNft22 Lukoil22 Gaz Lukoil23 TNK2 Gaz21 Lukoil2 Gaz2 Gaz19 Lukoil19 Rus23 Rus22 TNK18 TrNft18 Gaz18 Lukoil18 Rus2 RosNft17 Rus18 TNK17 Rus19 Rus28 Gaz28 Rus42 Rus TNK16 Lukoil17 Rus3 Gaz16NOV Rus17 2. Gaz16MAY DURATION, YEARS YIELD TO MATURITY YIELD TO PUT YIELD TO CALL BOND^ SUBORDINATED Source: Bloomberg, Gazprombank estimates 15

16 YIELD, % YIELD, % APRIL 1, 216 FIXED INCOME VALUATION Oil and gas: Russia vs. EM Petrobras2 Petrobras21 Petrobras19 Petrobras4 Petrobras41 UST Curve 8 7 Petrobras Petrobras Pemex22F.1 6 Petrobras17 Gaz Gaz Pemex Gaz21 Pemex22.5 Gaz2 Pemex21.2 Gaz19 Petrobras Pemex2 4 Pemex19F Rus22 Rus23 Gaz18 Pemex19 Rus2 Rus18 Rus19 3 Pemex18.4 Rus3 Gaz16NOV 2 Rus17 Gaz16MAY Rus28 Gaz28 Gaz34 Pemex38 Pemex45 Pemex41 Pemex35.1 Pemex44.2 Pemex44.1 Gaz37 Rus43 Rus42 DURATION, YEARS Oil and gas: Russia vs. CIS YIELD TO MATURITY YIELD TO PUT YIELD TO CALL BOND^ SUBORDINATED Source: Bloomberg, Gazprombank estimates SOCAR23 Gaz34 Gaz37 KMG44 UST Curve KMG TNK17 3.SOCAR17 SibNft23 SibNft22 KMG21 KMG23 KMG2 Gaz Novtk22 GeoOilGas17 Novtk21 RosNft22 Lukoil22 Lukoil23 Gaz TNK2 Gaz21 KMG18 Gaz2 Lukoil2 Gaz19 Lukoil19 KTG17 Rus23 Rus22 TNK18 TrNft18 Gaz18 Lukoil18 Rus2 RosNft17 Rus18 Rus19 KMG25 Rus28 Gaz28 Rus43 Rus TNK16 Lukoil17 Rus3 Gaz16NOV Rus17 2. Gaz16MAY DURATION, YEARS YIELD TO MATURITY YIELD TO PUT YIELD TO CALL BOND^ SUBORDINATED Source: Bloomberg, Gazprombank estimates 16

17 APR-15 APR-15 APR-15 APR-15 APR-15 APR-15 APR-15 APR-15 APRIL 1, 216 FIXED INCOME VALUATION Gazprom 19 Pemex 18.4 Gazprom 19 Petrobras LAST 155 AVG 262 MAX 451 MIN LAST -512 AVG -361 MAX 76 MIN -99 Rosneft 22 Pemex 22.5 Petrobras 17 Lukoil LAST 48 AVG 188 MAX 46 MIN LAST 34 AVG 314 MAX 969 MIN -37 Gazprom 37 Russia 42 Rosneft 22 Russia 22 2 LAST 97 AVG 134 MAX 172 MIN LAST 149 AVG 27 MAX 282 MIN Rosneft 22 Lukoil 23 Gazprom 25E Gazprom 17E 5.136% 11 LAST 21 AVG 42 MAX 98 MIN -6 3 LAST 237 AVG 158 MAX 251 MIN

18 APR-15 APR-15 APR-15 APR-15 APR-15 APR-15 APRIL 1, 216 FIXED INCOME VALUATION Gazprom Neft 12 OFZ 2626 Rosneft 4 OFZ LAST 81 AVG 97 MAX 347 MIN LAST 88 AVG 99 MAX 242 MIN -17 NOVATEK 17R Gazprom Capital 5 Gazprom Capital 4 OFZ LAST 5 AVG 71 MAX 54 MIN LAST 93 AVG 59 MAX 38 MIN Bashneft 6 Gazprom Neft 12 Gazprom Neft 12 Rosneft LAST 5 AVG 13 MAX 276 MIN LAST -8 AVG -4 MAX 236 MIN

19 ISSUE DOMESTIC BONDS INDICATIVE ISSUE VOLUME DATES DUR CPN CLOSE PRICE CHG, BPS Z-SPD (SWAP) CHG, BPS AMT. OUTST. CCY PLACEMENT PUT/CALL MATURITY RATING BashNeft , RUB 8.35 Dec 22, 29 Dec 13, 216 -/Ba1/BB+ BashNeft , RUB 8.35 Dec 22, 29 Dec 13, 216 -/Ba1/BB+ BashNeft , RUB 8.35 Dec 22, 29 Dec 13, 216 -/Ba1/BB+ BashNeft-3bo 5, RUB 12. May 22, 215 May 9, 225 -/Ba1/BB+ BashNeft , RUB Feb 17, 212 Feb 4, 222 -/Ba1/BB+ BashNeft-4bo , RUB 12. Jun 1, 215 May 25, 22 May 19, 225 -/Ba1/BB+ BashNeft-5bo , RUB 1.7 May 26, 214 Nov 19, 218 May 13, 224 -/Ba1/BB+ BashNeft , RUB 8.65 Feb 12, 213 Feb 6, 218 Jan 31, 223 -/Ba1/BB+ BashNeft , RUB 8.85 Feb 12, 213 Feb 4, 22 Jan 31, 223 -/Ba1/BB+ BashNeft-7bo , RUB 12.1 Jun 16, 215 Jun 8, 221 Jun 3, 225 -/Ba1/BB+ BashNeft , RUB 8.65 Feb 12, 213 Feb 6, 218 Jan 31, 223 -/Ba1/BB+ BashNeft , RUB 8.85 Feb 12, 213 Feb 4, 22 Jan 31, 223 -/Ba1/BB+ BK Eurasia , RUB 8.4 Jun 29, 211 Jun 27, 216 Jun 2, 218 -/-/BB Gazprom Capital , RUB 7.55 Feb 21, 213 Feb 15, 218 BB+/Ba1/BBB- Gazprom Capital , RUB 7.55 Feb 21, 213 Feb 16, 217 BB+/Ba1/BBB- Gazprom neft , RUB 8.9 Feb 8, 211 Feb 5, 218 Jan 26, 221 BB+/Ba1/BBB- Gazprom neft , RUB Feb 7, 212 Feb 2, 216 Jan 25, 222 BB+/Ba1/BBB- Gazprom neft , RUB 8.5 Dec 5, 212 Nov 29, 217 Nov 23, 222 BB+/Ba1/BBB- Gazprom neft-2bo RUB 1.65 Mar 25, 216 Mar 19, 221 Feb 16, 246 BB+/Ba1/BBB- Gazprom neft , RUB 8.2 Apr 21, 29 Apr 16, 218 Apr 9, 219 BB+/Ba1/BBB- Gazprom neft-7bo , RUB 1.65 Mar 23, 216 Mar 19, 221 Feb 16, 246 BB+/Ba1/BBB- Gazprom neft ,1. 1, RUB Feb 8, 211 Feb 8, 216 Jan 26, 221 BB+/Ba1/BBB- Gazprom-19bo (CPI) 1. 15, RUB 16.6 Nov 27, 213 Oct 21, 243 BB+/Ba1/BBB- Gazprom-2bo (CPI) 1. 15, RUB 16.6 Nov 27, 213 Oct 21, 243 BB+/Ba1/BBB- Geotech Seismorazvedka , , RUB 1.5 Oct 23, 213 Oct 19, 216 Oct 17, 218 B/-/- NK Alliance , , RUB 8.85 Jun 14, 211 Jun 1, 216 Jun 1, 221 -/-/- NK Alliance , , RUB 8.85 Jun 17, 211 Jun 15, 216 Jun 4, 221 -/-/- NPK RUB 15. Dec 3, 214 Jun 28, 216 Dec 26, 217 -/-/- Rosneft , RUB 8.6 Oct 29, 212 Oct 23, 217 Oct 17, 222 BB+/Ba1/- Rosneft , RUB 8.6 Oct 29, 212 Oct 23, 217 Oct 17, 222 BB+/Ba1/- Rosneft , RUB 7.95 Jun 11, 213 Jun 5, 218 May 3, 223 BB+/Ba1/- Rosneft , RUB 8. Mar 22, 213 Mar 16, 218 Mar 1, 223 BB+/Ba1/- Rosneft , RUB 8. Mar 22, 213 Mar 16, 218 Mar 1, 223 BB+/Ba1/- Rosneft , RUB 7.95 Jun 11, 213 Jun 5, 218 May 3, 223 BB+/Ba1/- 19

20 INDICATIVE ISSUE VOLUME DATES ISSUE DUR CPN RATING CLOSE PRICE CHG, BPS Z-SPD (SWAP) CHG, BPS AMT. OUTST. CCY PLACEMENT PUT/CALL MATURITY Rosneft , RUB 7.95 Jun 11, 213 Jun 5, 218 May 3, 223 BB+/Ba1/- Transneft , RUB 11.5 May 25, 29 May 16, 216 May 13, 219 BB+/Ba1/- Transneft , RUB 12. Oct 13, 29 Oct 3, 217 Oct 1, 219 BB+/Ba1/- Transneft , RUB 12.5 Sep 3, 29 Sep 18, 219 BB+/Ba1/- Transneft-3bo , RUB 11. Oct 22, 214 Apr 2, 216 Oct 9, 224 BB+/Ba1/- Transneft-4bo , RUB 11.5 Jul 16, 215 Jan 12, 217 Jul 3, 225 BB+/Ba1/- RUSSIA EUROBONDS Alliance Oil , USD 1.5 Mar 11, 21 Mar 11, 219 -/-/- Alliance Oil , USD 7. Apr 24, 213 May 4, 22 -/-/- Borets , USD Sep 11, 213 Sep 26, 218 BB-/B1/- EDC USD Apr 11, 213 Apr 17, 22 BB/-/BB Gazprom 16 MAY , USD 4.95 Nov 17, 211 May 23, 216 BB+/Ba1/BBB- Gazprom 16 NOV ,35 USD Nov 22, 26 Nov 22, 216 BB+/Ba1/BBB- Gazprom 17E ,4 EUR Jul 11, 212 Mar 15, 217 BB+/Ba1/BBB- Gazprom 17E EUR Nov 22, 26 Mar 22, 217 BB+/Ba1/BBB- Gazprom 17E.NOV EUR 5.44 Mar 7, 27 Nov 2, 217 BB+/Ba1/BBB- Gazprom ,1 USD Apr 11, 28 Apr 11, 218 BB+/Ba1/BBB- Gazprom 18 EUR , EUR Oct 8, 215 Oct 15, 218 BB+/Ba1/BBB- Gazprom 18C CHF Mar 16, 216 Nov 3, 218 BB+/Ba1/BBB- Gazprom 18E EUR 3.7 Jul 17, 213 Jul 25, 218 BB+/Ba1/BBB- Gazprom 18E ,2 EUR 6.65 Oct 25, 27 Feb 13, 218 BB+/Ba1/BBB- Gazprom ,25 USD 9.25 Apr 23, 29 Apr 23, 219 BB+/Ba1/BBB- Gazprom 19C CHF 2.85 Oct 16, 213 Oct 25, 219 BB+/Ba1/BBB- Gazprom USD 3.85 Jan 3, 213 Feb 6, 22 BB+/Ba1/BBB- Gazprom 2E , EUR Mar 13, 213 Mar 2, 22 BB+/Ba1/BBB- Gazprom 2P GBP Sep 18, 213 Sep 25, 22 BB+/Ba1/BBB- Gazprom USD Nov 17, 211 Jan 23, 221 BB+/Ba1/BBB- Gazprom 21E EUR 3.6 Feb 19, 214 Feb 26, 221 BB+/Ba1/BBB- Gazprom , USD 4.95 Jul 11, 212 Jul 19, 222 BB+/Ba1/BBB- Gazprom ,3 USD 6.51 Mar 7, 27 Mar 7, 222 BB+/Ba1/BBB- Gazprom 25E EUR Mar 13, 213 Mar 21, 225 BB+/Ba1/BBB- Gazprom USD 4.95 Jan 3, 213 Feb 6, 228 BB+/Ba1/BBB- Gazprom ,2 USD Apr 28, 24 Apr 28, 234 BB+/Ba1/BBB- Gazprom ,25 USD Aug 16, 27 Aug 16, 237 BB+/Ba1/BBB- Lukoil USD Jun 7, 27 Jun 7, 217 BBB-/Ba1/BBB- 2

21 INDICATIVE ISSUE VOLUME DATES ISSUE DUR CPN RATING CLOSE PRICE CHG, BPS Z-SPD (SWAP) CHG, BPS AMT. OUTST. CCY PLACEMENT PUT/CALL MATURITY Lukoil ,5 USD Apr 17, 213 Apr 24, 218 BBB-/Ba1/BBB- Lukoil USD 7.25 Nov 5, 29 Nov 5, 219 BBB-/Ba1/BBB- Lukoil , USD Nov 9, 21 Nov 9, 22 BBB-/Ba1/BBB- Lukoil USD Jun 7, 27 Jun 7, 222 BBB-/Ba1/BBB- Lukoil ,5 USD Apr 17, 213 Apr 24, 223 BBB-/Ba1/BBB- Novatek 17R , RUB 7.75 Feb 12, 213 Feb 21, 217 BB+/Ba1/BBB- Novatek USD 6.64 Feb 3, 211 Feb 3, 221 BB+/Ba1/BBB- Novatek , USD Dec 6, 212 Dec 13, 222 BB+/Ba1/BBB- RosNeft , USD Nov 29, 212 Jun 3, 217 BB+/Ba1/- RosNeft , USD Nov 29, 212 Jun 3, 222 BB+/Ba1/- SibNeft 18E EUR Apr 18, 213 Apr 26, 218 BB+/Ba1/BBB- SibNeft ,5 USD Sep 1, 212 Sep 19, 222 BB+/Ba1/BBB- SibNeft ,5 USD 6. Nov 2, 213 Nov 27, 223 BB+/Ba1/BBB- TNK , USD 7.5 Jul 18, 26 Jul 18, 216 BB+/Ba1/- TNK USD Mar 19, 27 Mar 2, 217 BB+/Ba1/- TNK ,1 USD Oct 1, 27 Mar 13, 218 BB+/Ba1/- TNK USD 7.25 Feb 2, 21 Feb 2, 22 BB+/Ba1/- TransNeft ,5 USD 8.7 Aug 7, 28 Aug 7, 218 BB+/Ba1/- PEERS COMPARISON Mexican Petroleum 16EF EUR Jul 22, 24 Aug 5, 216 BBB+/Baa3/BBB+ Mexican Petroleum USD 1.61 Jul 2, 1999 Aug 15, 217 A/Baa1/A+ Mexican Petroleum 17E , EUR 5.5 Sep 3, 29 Jan 9, 217 BBB+/Baa3/BBB+ Mexican Petroleum 17E EUR Aug 6, 29 Nov 6, 217 -/Baa3/BBB+ Mexican Petroleum 17F USD 1.61 Aug 15, 1999 Aug 15, 217 A/Baa1/A+ Mexican Petroleum USD 9.15 Dec 4, 1998 Nov 15, 218 A/Baa1/A+ Mexican Petroleum USD 9.15 Aug 15, 1999 Nov 15, 218 A/Baa1/A+ Mexican Petroleum USD 9.25 Sep 3, 25 Mar 3, 218 BBB+/Baa3/BBB+ Mexican Petroleum ,484 USD 5.75 Sep 1, 28 Mar 1, 218 BBB+/Baa3/BBB+ Mexican Petroleum USD Jan 15, 214 Jan 23, 219 BBB+/Baa3/BBB+ Mexican Petroleum 19C CHF 2.5 Mar 12, 212 Apr 1, 219 BBB+/Baa3/BBB+ Mexican Petroleum 19F ,937 USD 8. May 3, 29 May 3, 219 BBB+/Baa3/BBB+ Mexican Petroleum USD 6. Aug 3, 21 Mar 5, 22 BBB+/Baa3/BBB+ Mexican Petroleum 2C CHF 1.5 Nov 19, 215 Dec 8, 22 BBB+/-/BBB+ Mexican Petroleum ,393 USD 5.5 Jul 13, 21 Jan 21, 221 BBB+/Baa3/BBB+ Mexican Petroleum ,962 USD 5.5 Jul 21, 21 Jan 21, 221 BBB+/Baa3/BBB+ 21

22 INDICATIVE ISSUE VOLUME DATES ISSUE DUR CPN RATING CLOSE PRICE CHG, BPS Z-SPD (SWAP) CHG, BPS AMT. OUTST. CCY PLACEMENT PUT/CALL MATURITY Mexican Petroleum USD 2. Jun 26, 212 Dec 2, 222 -/-/- Mexican Petroleum USD 1.95 Jun 28, 212 Dec 2, 222 -/-/- Mexican Petroleum USD 1.7 Jul 17, 212 Dec 2, 222 -/-/- Mexican Petroleum ,91 USD Jul 23, 212 Jan 24, 222 BBB+/Baa3/BBB+ Mexican Petroleum 22F USD Feb 1, 23 Feb 1, 222 BBB+/Baa3/BBB+ Mexican Petroleum 22P GBP 8.25 May 2, 29 Jun 2, 222 BBB+/Baa3/BBB+ Mexican Petroleum ,1 USD 3.5 Jan 23, 213 Jan 3, 223 BBB+/Baa3/BBB+ Mexican Petroleum 23F USD Dec 1, 25 Dec 1, 223 BBB+/Baa3/BBB+ Mexican Petroleum , USD Jul 11, 213 Jan 18, 224 BBB+/Baa3/BBB+ Mexican Petroleum 25E , EUR 5.5 Feb 15, 25 Feb 24, 225 BBB+/Baa3/BBB+ Mexican Petroleum USD 9.5 Sep 18, 1997 Sep 15, 227 BBB+/Baa3/BBB+ Mexican Petroleum USD 9.5 Sep 15, 25 Sep 15, 227 BBB+/Baa3/BBB+ Mexican Petroleum ,291 USD Dec 15, 25 Jun 15, 235 BBB+/Baa3/BBB+ Mexican Petroleum , USD Jun 15, 21 Jun 15, 235 BBB+/Baa3/BBB+ Mexican Petroleum USD Dec 15, 28 Jun 15, 238 BBB+/Baa3/BBB+ Mexican Petroleum ,499 USD 6.5 Jun 2, 211 Jun 2, 241 BBB+/Baa3/BBB+ Mexican Petroleum ,748 USD 5.5 Jun 26, 212 Jun 27, 244 BBB+/Baa3/BBB+ Mexican Petroleum , USD 5.5 Jun 26, 212 Jun 27, 244 -/Baa3/BBB+ Mexican Petroleum , USD Jan 15, 214 Jan 23, 245 BBB+/Baa3/BBB+ Petrobras USD Sep 29, 26 Oct 6, 216 B+/B3/BB+ Petrobras 16Y 35, JPY 2.15 Sep 27, 26 Sep 27, 216 -/B3/BB+ Petrobras ,75 USD 3.5 Feb 1, 212 Feb 6, 217 B+/B3/BB+ Petrobras ,75 USD Oct 29, 27 Mar 1, 218 B+/B3/BB+ Petrobras USD Dec 3, 23 Dec 1, 218 B+/B3/BB+ Petrobras 18E ,5 EUR 2.75 Jan 7, 214 Jan 15, 218 B+/B3/BB+ Petrobras 18E 4, ,25 EUR Dec 1, 211 Mar 7, 218 B+/B3/BB+ Petrobras ,75 USD Feb 4, 29 Mar 15, 219 B+/B3/BB+ Petrobras 19E ,3 EUR 3.25 Sep 24, 212 Apr 1, 219 B+/B3/BB+ Petrobras ,5 USD 5.75 Oct 23, 29 Jan 2, 22 B+/B3/BB+ Petrobras ,25 USD Jan 2, 211 Jan 27, 221 B+/B3/BB+ Petrobras 21E EUR 3.75 Jan 7, 214 Jan 14, 221 B+/B3/BB+ Petrobras 22E EUR Dec 1, 211 Mar 7, 222 B+/B3/BB+ Petrobras 23E EUR 4.25 Sep 24, 212 Oct 2, 223 B+/B3/BB+ Petrobras 25E EUR 4.75 Jan 7, 214 Jan 14, 225 B+/B3/BB+ Petrobras 26P GBP 6.25 Dec 5, 211 Dec 14, 226 B+/B3/BB+ 22

23 INDICATIVE ISSUE VOLUME DATES ISSUE DUR CPN RATING CLOSE PRICE CHG, BPS Z-SPD (SWAP) CHG, BPS AMT. OUTST. CCY PLACEMENT PUT/CALL MATURITY Petrobras 29P GBP Sep 24, 212 Oct 1, 229 B+/B3/BB+ Petrobras 34P GBP Jan 7, 214 Jan 16, 234 B+/B3/BB+ Petrobras ,5 USD Oct 23, 29 Jan 2, 24 B+/B3/BB+ Petrobras ,25 USD 6.75 Jan 2, 211 Jan 27, 241 B+/B3/BB+ CIS EUROBONDS KazMunaiGaz ,6 USD Jul 2, 28 Jul 2, 218 BB/Baa3/BBB KazMunaiGaz ,5 USD 7. May 5, 21 May 5, 22 BB/Baa3/BBB KazMunaiGaz ,25 USD Nov 1, 21 Apr 9, 221 BB/Baa3/BBB KazMunaiGaz , USD 4.4 Apr 24, 213 Apr 3, 223 BB/Baa3/BBB KazMunaiGaz USD Oct 31, 214 May 7, 225 BB/Baa3/BBB KazMunaiGaz , USD 5.75 Apr 24, 213 Apr 3, 243 BB/Baa3/BBB KazMunaiGaz , USD 6. Oct 31, 214 Nov 7, 244 BB/Baa3/BBB KazTransGaz USD May 14, 27 May 14, 217 BB/Baa3/BBB- Zhaikmunai , USD Feb 1, 214 Feb 14, 217 Feb 14, 219 B/B2/- Zhaikmunai , USD Nov 2, 212 Nov 13, 219 B/B2/- Georgian OGC USD May 9, 212 May 16, 217 B+/-/BB- SOCAR USD 5.45 Feb 2, 212 Feb 9, 217 BB/Ba1/BB+ SOCAR , USD 4.75 Mar 1, 213 Mar 13, 223 BB/Ba1/BB+ 23