NOVATEK“BUILDING ON ACHIEVEMENTS”

Credit Linked Notes Road ShowDecember, 2004

Mark A. GyetvayChief Financial Officer and Deputy Chairman of the Board

                                                                    

2

Our Vision. Our Quest. Our Journey.

OUR VISION is to be the leading independent natural gas producer in Russia by harnessing the creative knowledge, enthusiasm and power of our human capital in all spheres of operations and in all regions where we operate

OUR QUEST is to capture the full spectrum of the natural gas value chain by integrating our high quality upstream productive assets with our state-of-the-art downstream processing capabilities

OUR JOURNEY is to achieve world class levels of hydrocarbon production by producing between 45 to 50 billion cubic meters of natural gas and 5 to 6 million tons of liquids per annum, and being a leading domestic producer of polypropylene and polyethylene products

                                                                    

3

Operating a series of oil and gas fields acquired at their initial stage of development;

Concentrating development activities in core areas to achieve economies of scale;

Exploiting high margin natural gas properties;

Focusing development activities to achieve volumetric natural gas reserve and production growth;

Managing low cost production advantage;

Enhancing production stream value through centralized marketing and processing activities; and

Committing to build the company based on sustainable development principles.

Strategic objectives driving performance and creating value

Strategy and Value

                                                                    

4

Novatek is the second largest Russian natural gas producer

FY 2003 gross gas production of 19.5 bcm and net production of 13.2 bcm

1H 2004 gross gas production of 10.5 bcm and net production of 7.5 bcm

Significant holder of proved natural gas reserves vis-à-vis Russian and international oil and gas peer group

Net SPE proved natural gas reserves of 422 bcm as of 31 December 2003

Net ABC1 natural gas reserves of 826 bcm as of 1 January 2004

1H 2004 IFRS reviewed financial results

1H 2004 revenue increased 1.9 times versus 1H 2003

1H 2004 EBITDA increased 2 times versus 1H 2003

Novatek Highlights 2003 - 2004

                                                                    

5

Novatek Highlights 2003 – 2004 continued…

Corporate restructuring program in 2004 Completed divestiture and sale of the construction business

and other non-core assets

Vertically integrating First phase of Purovsky gas condensate stabilisation plant and

BOP film plant nearing completion Consolidated shareholding in Truboizolyatsiya to 97.9%

Diversifying debt financing sources Successful CLN issue totalling USD100 mln in April 2004 USD120 mln 7-year term sheet signed with IFC

Corporate development Signed protocol on the purchase of a 25.1% + 1 share stake in

Novatek by Total S.A.

                                                                    

6

Novatek Corporate Structure

2004 Restructuring results

Divestiture of construction business

New shares issue to consolidate stakes in Tarkosaleneftegas and Khancheyneftegas

Acquisition of 100% stake in Terneftegas

Board approval for sale of stake in Geoilbent

Yurkharovneftegas

Tarkosaleneftegas

Khancheyneftegas

Purneftegasgeologiya

Terneftegas Geoilbent

Selkupneftegas

Tambeyneftegas

Novasib

Yargeo

32.3%

43%

77.96%

100% 66%

34%

25.1%

50%

41%

NOVA ZPK

NovaTrans

Novakhim

Truboizolyatsiya

Truboplast

100%

100%

100%

99.79%

37.3%

Processing and Transport

Novatek

100%

62.67%

56.1%

73.23%

IndustrialExploration and production

                                                                    

7

Located in the Primary Natural Gas Resource Base of Russia

West Siberia2005: 92%2010: 82%2015: 81%

West Siberia2005: 92%2010: 82%2015: 81%

European Russia

2005: 6%2010: 13%2015: 13%

European Russia

2005: 6%2010: 13%2015: 13%

NOVATEK’s current and future

production is concentrated in the

prolific YNAO

NOVATEK’s current and future

production is concentrated in the

prolific YNAO

Source: RF Energy Strategy to 2020

Moscow

East Siberia2005: 1%2010: 3%2015: 3%

East Siberia2005: 1%2010: 3%2015: 3%

Sakhalin2005: 1%2010: 2%2015: 3%

Sakhalin2005: 1%2010: 2%2015: 3%

Sources of future natural gas production in the Russian FederationSources of future natural gas production in the Russian Federation

                                                                    

8

Novatek’s fields are located in the YaNAO, the world’s largest natural gas producing region

Novatek’s fields are in close proximity to the UGSS

Novatek holds 17 licenses* for hydrocarbon exploration and development

Novatek was granted 5 new exploration licenses in 2004

Novatek’s 3 main fields hold SPE proved reserves of: Natural gas: 422 bcmLiquids: 29 mm tonnes

Yurkharovskoye

Severo -

Urengoiskoye

Zapolyarnoye

KhancheyskoyeEast Tarkosalinskoye

Urengoiskoye

Yamburgskoye -

Excluding Geoilbent (3 licenses) which the company has decided to sell and Pur-Land which the company will not be consolidating

Key Competitive Advantage: Reserve Location

                                                                    

9

Exploration and Development - 2004

Significant development opportunities within existing mineral licenses and exploration activities through the acquisition of new mineral licenses

Assets are concentrated in the development stage and not yet fully exploited

Pro

du

cti

on

Pro

file

Concept, Exploration& Appraisal

Development RestorationDecline

Time

Tarkosaleneftegas

Yurkharovneftegas

GeoilbentJV/YUKOS LLC

Khancheyneftegas

SelkupneftegasJV/Rosneft

Purneftegasgeologia

Novatek’slicenses

Pur-Land

                                                                    

10

Gross Reserve Base Profile

Natural Gas, Gas Condensate and Crude Oil Reserves

4.43

0

3

6

9

12

15

ProvedDeveloped

+ ProvedUndeveloped

+ Probable + Possible + Technical(ABC1 + C2)

Billi

on B

OE

2.24

1.94

1.81

3.02

Source: DeGolyer and MacNaughton and Ryder Scott for SPE reserves, Novatek for technical reserves

                                                                    

11

Proved (P1) Natural Gas Reserves (BCF) as of December 31, 2003* (Gazprom proved gas reserves as of 12/31/02)

7,969

8,411

9,473

13,886

14,935

18,808

19,942

20,191

20,306

21,849

24,473

41,069

43,976

54,769

Norsk Hydro

EnCana

Petrobras

Statoil

NOVATEK**

ENI

Repsol-YPF

ChevronTexaco

NOVATEK***

Total

LUKoil

PetroChina

BP

ExxonMobil

Gazprom

*SEC filings and annual reports, **OAO NOVATEK reserves per DeGolyer & MacNaughton and Ryder Scott for 5 entities***OAO NOVATEK post consolidation of Tarkosaleneftegas and Khancheyneftegas

575,496

Top Global Gas Reserve Rankings

                                                                    

12

Novatek vs. Majors and Peers

Novatek is the largest company based on proven gas reserves in a peer group of US independent gas producers

Novatek has 1.8 times the reserves of its closest US Independent producer, Burlington Resources

Net proved natural gas reserves, bcm

1,551

1,245 1,163

693 619 572 565 533422 393

16,290

Ga

zpro

m

Ex

xo

nM

ob

il

BP

Pe

tro

Ch

ina

LU

Ko

il

To

tal

Ce

vro

nT

ex

ac

o

Re

ps

ol-

Yp

f EN

I

No

va

tek

Sta

toil

Net proved natural gas reserves, bcm

229 219 207184

138 132103 90 81

422

No

vate

k

Bu

rlin

gto

nR

eso

urc

es

An

adar

koE

ner

gy

Dev

on

En

erg

y

Un

oca

l

Ap

ach

e

EO

GR

eso

urc

es

XT

O E

ner

gy

Ker

r-M

cGee

Ch

esap

eake

Novatek has proved SPE gas reserves of 422 bcm as of 31 December 2003

Novatek ranks favourably amongst global gas reserve leaders

Novatek has proved SPE liquids reserves of 29 mln tons as of 31 December 2003

                                                                    

13

Proved natural gas reserves growth in 2003, bcm

Balance at beginning of period 394

Growth in proved developed reserves 18

Growth in proved undeveloped reserves

10

Balance at end of period 422

Gas reserves replacement ratio 248%

Volume and Quality of Mineral Resources

422

963

195

346

Proved Proved +

Probable

Proved +

Probable +

Possible

Total

29

104

28

47

Proved Proved +

Probable

Proved +

Probable +

Possible

Total

Natural gas reserves are appraised annually, by DeGolyer and MacNaughton, independent petroleum engineers under

SPE Reserve Standards(44%)

(20%)

(36%)

(28%)

(45%)

(27%)

Structure of gas reserves as of 31.12.2003, bcm(% of Total)

Structure of liquids reserves as of 31.12.2003, mln tonnes(% of Total)

                                                                    

14

Leadership by Production - 2003

Novatek ranked 5th versus independent gas producer peer group (Based on Gross Production, 19.5 bcm)

Novatek’s gas production is 41% of the largest 2003 independent producer, Devon Energy

Novatek’s gross gas production potential is over 50 bcm p.a. at full capacity

75.44

60.656.2 55.1 53.4

38.8

30.5

23.2 21.3 2118.5

Dev

on E

nerg

y

Burli

ngto

n Re

sour

ces

Ana

dark

o En

ergy

Unoc

al

Nov

ate

k

Apach

e

EOG

Res

ourc

es

Ker-M

cGee

XTO

Ene

rgy

Che

sap

eake

Pion

eer N

atu

ral R

esou

rces

*Source: Company data, TRUST Investment Bank

Natural gas production, mln cm per day

                                                                    

15

Resources for Sustained Long – Term Growth

Reserve CategoryR/P years

Oil/Liquids Gas Total

ABC1 C2 133 123 123

Proved, Probable, Possible (“P3”)

88 85 85

Proved + Probable (“P2”) 49 54 53

Proved (“P1”) 24 37 35

Based on 2003 net actual production and SPE reserve appraisals as of 31 December 2003

                                                                    

16

Comparison of 1H 2004 vs. FY 2003 consolidated results

1H 2004 Revenue - 74%

1H 2004 EBITDA - 68%

1H 2004 Net profit - 71%

Rapid increase in revenue, EBITDA and net profit attributable to growth in production and price increases

Profitability measures

As a % of sales

2003 2002

EBITDA* 32.5%

30.4%

Net profit 19.1%

11.4%

Novatek’s key financial information (consolidated), RUR mln

Gross Revenue

EBITDA

Net Profit

5 654

17 177

6 636

12 793

1 718

5 575

1 890

3 782

644

3 281

1 103

2 318

2002 2003 1H2003 1H2004

3.0x

1.9x

3.3x2.0x

2.1x5.1x

Financial Position: Rapid Growth in Performance

* Based on Trust Investment Bank

                                                                    

17

Sales of gas and liquid hydrocarbons

Construction

Other revenue

Novatek’s consolidated revenue structure 2003 20021H 2004

Since 2002, Novatek’s operations have been focused on the production and sale of gas and liquid hydrocarbons

The share of revenues from construction has been steadily declining, and at the end of 1H 2004, Novatek completed the divestiture of this business

Other revenues come mainly from the production and sale of polymers and film for pipeline insulation as well as oil and oil product transportation servicesSource: company data

81%

16%

3%

70%

19%

11%

41%

39%

20%

Focus on Core Operating Activities

                                                                    

18

63%

26%

4%7%

Sales and Marketing – Oil and Gas

65%

28%

7%

FY 2003 gas sales of 13.5 bcm

Key competitive advantages

Proximity of reserves to gas pipelines (UGSS)

Large share of end users

Constructive relationship with Gazprom

Oil exports accounted for 32% of production in 2003

Plans for 2005:

Commissioning of Purovsky Gas Condensate Stabilization Plant (April 2004)

Premium price to Ural’s crude oil blend

Planned output of more than 1mln tonnes

47%

26%

10%

7%

10%

Source: company data

Industrial and metals companies

Traders

Energy companies

Gazprom

Regional distributors

Structure of Gas Sales

FY2003

1H 2003 1H 2004

                                                                    

19

Upstream Operating efficiency (source: Companies data (SFAS 69))

0.6

1.5

1.8

2.5

2.6

2.6

2.9

3.5

3.7

4.2

4.9

5.0

5.1

6.5

0.3

0 2 4 6 8

Novatek

Gazprom

Yukos*

Sibneft

TNK-BP*

Total

LUKoil

Rosneft

Petrobras

BP

Tatneft*

RD/Shell

Conoco Phillips

Chevron Texaco

Exxon Mobil

$/boe

0.43

1.08

1.24

3.13

3.36

3.40

3.56

4.53

5.11

5.73

7.45

0 2 4 6 8

Novatek**

Yukos*

LUKoil

BP

Petrochina

Petrobras

Sibneft

Total

Exxon Mobil

Chevron Texaco

RD/Shell

$/boeNote: Lifting costs for Novatek subsidiaries were restated to exclude production taxes

* Data for 2002

*Yukos data is 2000 – 2002 average

** Novatek data is for 2003 only

Lifting Costs, 2003 Finding & development Costs, 2001-03 average

                                                                    

20

Low Long Term Liquidity Ratios

0.20

0.20

0.20

0.20

0.30

0.30

0.30

0.20

0.30

0.30

0.30

0.40

0.40

0.32

0.46

0.50

0.59

0.68

0.68

0.69

0.72

0.78

0.85

0.87

1.19

1.39

Apache Corp.

New Field Exploration Co.

EOG Resources, Inc.

Anadarko Petroleum

Novatek

Pioneer Natural Resources

Burlington Resources, Inc.

Unocal Corp.

Devon Energy, Corp.

XTO Energy, Inc.

Noble Energy, Inc.

Chesapeake Energy, Inc.

Kerr-McGee Corp.

Debt/Equity

Debt/Assets

Novatek’s 1H 2004 debt profile shows high borrowing capacity

Total Debt - RUR 10,671mm

LT Debt as % of total Debt 79% (2003 – 73%)

Current ratio 1.24 (2003 – 1.14)

Novatek has low debt level compared to US peers

2003Peer

Average

Novatek

Debt/Equity

.75 .68

Debt/Assets

.30 .30Source: company data, TRUST Investment Bank

                                                                    

21

Strong Debt and Interest Expense Coverage

Debt Coverage Ratios, 2003

1.40 1.471.58

1.811.98

2.51 2.54

0.63

1.20

0.91 0.87

1.91

0.921.05

0.46

0.64

EOG

Reso

urc

es,

Inc

Nova

tek

Pioneer

Natu

ral

Reso

urc

es

XTO

Energ

y,In

c.

Noble

Energ

y, Inc.

Chesa

peake

Energ

y C

orp

.

Apache

Corp

.

Kerr-M

cG

ee

Corp

.

Debt/EBITDA

Debt/Revenue

Improving debt coverage ratios

1H 2004

EBITDA/Interest Expense

17.4x

Operating Cash flow / Interest Expense

14.2x

FY 2003

EBITDA/Interest Expense

10.4x

Operating Cash flow/ Interest Expense

7.1x

                                                                    

22

Novatek’s energy value chain

TarkosaleneftegasKhancheyneftegasYurkharovneftegasPurneftegasgeologia

TarkosaleneftegasKhancheyneftegasYurkharovneftegasPurneftegasgeologia

Purovsky ZPKPurovsky ZPK

Samara PCCSamara PCC

White SeaPort Facilities

White SeaPort Facilities

NovatransNovatrans

420 LPG railway tank cars420 LPG railway tank cars

1st Stage capacity 2 mln tonne p.a 2nd Stage capacity 5 mln tonne pa1st Stage capacity 2 mln tonne p.a 2nd Stage capacity 5 mln tonne pa

Core Natural gas and liquids Production

Companies

Core Natural gas and liquids Production

Companies

High Grade Polypropylene and Polyethylene

High Grade Polypropylene and Polyethylene

Acquired five new exploration licenses and various seismic and geological data

Acquired five new exploration licenses and various seismic and geological data

BOP Plant

TruboizolyatsiyaTruboplast

Packaging filmPackaging filmPipes and Pipe Insulation

Pipes and Pipe Insulation

                                                                    

23

USD

Credit event

C.R.R. B.V. TMF TRUSTEE

OJSC Novatek

Loan agreement

USD

Enforcement of rights under the Loan agreement

Assignment of Rights under theLoan agreement

USD (Credit event)

Rep

ay

me

nt

un

de

r th

e C

LN

Issuance/Placement of CLN

USD

CLN

INVESTORS

Guarantor

Guarantee agreement

CLN Issue Chart

Issuer C.R.R. B.V.

Borrower Novatek

Guarantor Yurkharovneftegas

Principal amount

USD100,000,000

Tenor 18 months

Planed placement period

December 2004

Coupon period

Semi-annual

                                                                    

24

Disclaimer – Safe Harbor Act

The following document contains certain “forward-looking” information as defined by the Private Securities Litigation Reform Act of 1995 including, without limitation, estimates, expectations, plans and goals regarding NOVATEK’s forecasted production, reserves, financial position, business strategy and plans and objectives of management for future operations and development. Such forward-looking information (forward looking statements are all statements other than those of historical fact) involves estimates, assumptions and uncertainties that involve risks and uncertainties, including price volatility, development, operational, implementation and opportunity risks, and other factors, which could cause actual results to differ materially. No assurance can be given that NOVATEK’s expectations or goals will be realized, and actual results may differ materially from those expressed in the forward-looking information. The words “aims”, “believes”, “seeks”, “anticipates”, “plans”, “expects”, “intends”, “estimates”, “should”, “will”, “may” and similar expressions are intended to identify forward-looking statements.

This presentation does not constitute an offer or invitation to sell or issue, or any solicitation of any offer to subscribe or purchase, any securities and may not be used or relied upon in connection with any contract or investment decision or commitment whatsoever.

                                                                    

25

EBITDA (earnings before interest, income tax, depreciation and amortisation)

This indicator is based on the sum of the following items of Novatek’s IAS Income Statement:

(Net profit + Income tax + Interest expense + Depreciation and amortisation expenses)

Total debt (Debt)

This indicator is calculated as the sum of the following items of Novatek’s IAS balance sheet :

(Long-term loans received + Short-term loans received)

Current ratio is calculated as a ratio between the following items of Novatek’s IAS balance sheet :

Current assets / Current liabilities

Calculation of key financial indicators used in Novatek’s presentation