CPC Shareholders have discussed the Expansion Project progress

CPC-R Board of Directors meeting and CPC-K Extraordinary General Shareholders’ meeting were held September 20/21 in Almaty, Republic of Kazakhstan.

The meetings’ agenda was focused on the CPC Expansion Project. The Consortium Shareholders have heard the pipeline capacity increase progress report highlighting the work that commenced on July 1, 2011. They were provided with the information on the progress achieved at all facilities under construction and work areas of the first Project phase. In accordance with the approved schedules, contractors’ mobilization near the system’s pump stations is over and construction work is underway. At the same time, design work and purchase of long-lead items required for the second Expansion phase continue. Traditionally, special consideration is given by the Consortium to the matters of safety: Incident- and Injury-Free program, acknowledged worldwide during implementation of similar projects, has been implemented both by the Company and all contractors.

In general, the CPC Shareholders have welcomed the achieved results and defined the measures necessary for dynamic continuation of the Expansion Project.

In addition, the participants have discussed various aspects of Consortium’s ongoing financial and business performance. The Company’s Board of Directors was re-elected at the CPC-K Shareholders’ Meeting.

The Expansion provides for the CPC pipeline system capacity increase to 67MMTA. The Expansion Project includes rehabilitation of the existing, and construction of 10 additional pump stations (2 in the Republic of Kazakhstan and 8 in the Russian Federation), six crude oil storage tanks near Novorossiysk, as well as third single point mooring at the CPC Marine Terminal and replacement of 88 km of pipelines in Kazakhstan with a larger diameter pipe. The total Project investments will amount to US$ 5.4 billion. It is planned to complete the Expansion in 2015.

CPC Shareholders: Russian Federation (represented by Transneft – 24% and CPC Company – 7%) – 31%; Republic of Kazakhstan (represented by KazMunaiGaz – 19% and Kazakhstan Pipeline Ventures LLC – 1.75%) – 20.75%; Chevron Caspian Pipeline Consortium Company – 15%; LUKARCO B.V. – 12.5%; Mobil Caspian Pipeline Company – 7.5%; Rosneft-Shell Caspian Ventures Limited – 7.5%; BG Overseas Holding Limited - 2%; Eni International N.A. N.V. - 2%; and Oryx Caspian Pipeline LLC – 1.75%.