Novy Neft Limited - Notice Of Annual General Meeting And Resolution

The Directors of Novy Neft Limited (the "Company"), wish to advise that the Company has today given notice of the Annual General Meeting (AGM) which is to be held on 31 March 2005.

Directors further wish to advise that at the AGM an ordinary resolution is to be proposed as is required, that the Company continue as an investment company.

Please see below the text of a letter from the Directors which has been distributed with the Annual Report:

'To:  All Shareholders of Novy Neft Limited

Dear Shareholder,

Continuation Vote

As indicated in the Company's Placing memorandum, the first Annual General Meeting provides an opportunity for Shareholders to vote on the continuation of the Company.

The Company was structured to ensure that mechanisms were put in place designed to prevent the shares of the Company trading at a substantial discount to Net Asset Value.  The inclusion of a continuation resolution at each annual general meeting falling after the anniversary of the Company's launch is one such mechanism.  If the resolution is not passed, the Directors are required to formulate proposals to be put to Shareholders for the winding-up or other reorganisation or reconstruction of the Company.

Additionally, the Placing Memorandum provided that:

€˜ The Directors believe that the investment rationale of the Company may cease to exist if the Russian Government lifts the current foreign ownership restrictions pertaining to the local shares of Gazprom.  In these circumstances the Directors currently would intend to call an extraordinary general meeting of the Company to propose to Shareholders that the Company proceed to a voluntary winding-up.'

Furthermore, the Directors have the authority to purchase Shares of the Company in the market, off market or by tender in order to address any imbalance between the supply of and demand for Shares and the Directors may at their absolute discretion redeem Shares at the request of Shareholders.  During the latter part of 2004, the Directors exercised this discretion and bought back and cancelled 2,789,950 shares.

The Directors believe on balance that it is in the best interests of the Company and Shareholders as a whole for the Company to continue in existence for the following reasons:

1)                   The Company still provides Shareholders with a means of gaining exposure to the economic benefits of being holders of local Gazprom shares in an efficient manner.

2)                   Despite the recent and continued speculation surrounding the removal of the €˜ring fence' this has yet to happen. If it does happen within the next twelve months, an extraordinary general meeting to allow the Company to proceed to a voluntary winding-up will be convened.

3)                   The Directors retain powers to buy back shares in the market or by tender to address any imbalance between supply and demand for shares.

4)                   The Gazprom ADR's continue to trade at a premium to the underlying shares.  This has narrowed over the life of the Company from c. 77% at the time of launch to c. 20% as at 14 March 2005.

Should the Company continue in its current form, the Directors are proposing to implement a Tender offer for up to 15% of the issued share capital of the Company at a 1% discount to the then prevailing net asset value.  The Directors will also consider Tender offers in the future to address any imbalance between supply and demand.  This discretion will only be used to buy-back or redeem Shares in accordance with guidelines which are designed to ensure that the Company is not open-ended for taxation or regulatory purposes.

The Directors would like to thank Shareholders for their support over the last fifteen months and would recommend Shareholders to vote for the Company to continue as an investment company.

Yours faithfully,

Anderson Whamond

Director.'

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