Alliance Oil Co Ltd. : Quarterly operational update and outlook for 2012

Alliance Oil Company's total upstream volumes for 2011increased by 12% to 17.9
mbbl (49,100bopd) from 16.0mbbl (43,800bopd) in 2010. The full year
development and exploration program resulted in 56 new wells. The preliminary
refining volumes in 2011increased by 13% to 26.9mbbl (73,700bopd) from 23.7
mbbl (64,900bopd). Preliminary oil product sales amounted to 27.4mbbl (24.4
mbbl).

The total oil production for the fourth quarter of 2011increased by 38% to 5.8
mbbl (62,700bopd) compared to 4.2mbbl (45,600bopd) in the third quarter of
2011. Preliminary refining volumes at the Khabarovsk refinery amounted to 6.7
mbbl (72,800bopd) in the fourth quarter of 2011compared to 7.1mbbl (77,100
bopd) in the third quarter of 2011. Preliminary fourth quarter oil product
sales amounted to 7.1mbbl compared to 7.1mbbl in the third quarter of 2011.

Supported by macroeconomic factors and improved financial performance, the
Company plans to increase its drilling activities in 2012and budgets capital
expenditures of 380-450MUSD for the upstream segment, primarily in the Tomsk
and Timano-Pechora regions. In the downstream segment, capital expenditures of
490-540MUSD are planned to complete the modernisation of the Khabarovsk
refinery and support further expansion in the Russian Far East oil products
market.

The upstream production guidance for 2012is an average daily production of
63,000-69,000barrels (2011: 49,100bopd) and the average daily refining
guidance for the downstream segment volume is at 68,000-73,000barrels (2011:
73,700bopd).

Operational update
Oil production in the Timano-Pechora region increased by 107% to 3.1mbbl in
the fourth quarter of 2011compared to 1.5mbbl in the third quarter of 2011.
Oil production in the Volga-Urals region and Kazakhstan was flat at 2.0mbbl in
the fourth quarter of 2011compared to 2.0mbbl in the third quarter of 2011.
Oil production in the Tomsk region was flat at 0.7mbbl in the fourth quarter
of 2011compared to 0.7mbbl in the third quarter of 2011.

In 2011, 52production and 4 exploration wells were drilled. All production
wells were completed and put into operation. Exploratory tests in the
Volga-Urals region and Kazakhstan resulted in confirmation and addition of
reserves. An exploratory well at Kolvinskoye was drilled in the fourth quarter
of 2011and currently is being evaluated.

The Kolvinskoye field in Timano-Pechora was launched in the third quarter of
2011, following completion of the pipeline and other infrastructure facilities.
This field currently produces around 24,000bopd. In the fourth quarter of 2011
oil production from the Kolvinskoye oil field amounted to 2.1mbbl.

In December 2011, the Company and Repsol Exploracion S.A. reached an agreement
to form a joint venture for exploration and production growth in Russia with a
total asset base of approximately 840MUSD. Alliance will own 51% of the joint
venture and will contribute Volga-Urals assets with proven and probable oil
reserves of 171.5million barrels as of December 31, 2010and current
production of around 20,000bopd. Repsol will carry out a capital increase in
the joint venture and also pay cash to Alliance to obtain a 49% participation.
As part of Repsol's commitment, Repsol in December acquired and will in 2012
contribute Eurotek to the JV. Eurotek's main assets are two licences,
encompassing the Syskonsyninskoye gas Field (SK), which is at an advanced
development stage, starting production in 2012and the Yuzhno-Khadyryakhinskoye
gas field (YK) which is under the final stage of appraisal and planned to come
on-stream by 2016. Proven and probable reserves at the SK and YK field are
estimated at 115mboe with additional resource potential.

Preliminary Khabarovsk refinery throughput totalled 6.7mbbl in the fourth
quarter of 2011and 26.9mbbl in 2011. Capacity utilisation remained high and
was driven by continued high demand for oil products in the Russian Far East.
In the first quarter of 2011, the Company expanded its downstream presence in
the Russian Far East by acquiring Gavanbunker, a sea terminal to further
strengthen its growing bunkering operations.

Outlook for 2012

Upstream
The strategic objectives for the upstream segment in 2012are to gradually
increase oil production and further grow the reserve base through development
of the existing assets and the joint venture with Repsol.

The upstream capital expenditures are planned at 380-450MUSD and primarily
targets further development of the Kolvinskoye field in the Timano-Pechora
region and the Puglalymskoye field in the Tomsk region. At Kolvinskoye, the
plan is to optimize reserve recovery and benefit from the Mineral Extraction
Tax exemption through continuous production growth in coming years. Planned
activities for the field are aimed at an active drilling programme, maintaining
formation pressure and adding infrastructure. At the Puglalymskoye field, an
intensive drilling program is planned to further develop the field and grow
production in this region.

The upstream production guidance for 2012is an average daily production of
63,000-69,000barrels. The previously stated target of 90,000bopd at the end
of 2012will no longer apply as a target and will be replaced by guidance on
average daily volumes. Following the formation of the joint venture with Repsol
and the incorporation of the Eurotek assets in 2012, the total asset base will
provide the basis for significantly higher production levels in coming years.

The current upstream capital expenditures plan and production guidance reflect
continued consolidation of the Volga-Urals assets which are to be contributed
to the joint venture and excludes the Eurotek assets.

Downstream
The upgrade of the Khabarovsk refinery and the strengthening of the marketing
arm remain the key downstream projects. The refinery modernisation which will
lead to an increase of light product yield and higher capacity is scheduled for
completion in 2012and expected to be fully operational in 2013. The Company
plans to establish a connection from Khabarovsk to the ESPO pipeline to enable
crude oil deliveries to the refinery by pipeline gradually replacing railway
deliveries starting from 2013.

Downstream capital expenditures are planned at 490-540MUSD. Planned 2012
capital expenditures are primarily related to the modernisation of the
Khabarovsk refinery, the connection to ESPO, construction/reconstruction of
retail stations and oil depots and other projects to support Far East expansion
and improve efficiency.

The average daily refining guidance for the downstream segment is at
68,000-73,000barrels in 2012. Following the modernisation of the Khabarovsk
refinery, the refining capacity will amount to approximately 90,000bopd.

"In 2011, the Company's performance was supported by macroeconomic factors,
primarily high crude prices and strong demand for oil products, and operational
performance, primarily the launch of the Kolvinskoye oil field. This will be
reflected in improved financial results for 2011and for the fourth quarter in
particular. For 2012, we plan a capital program aimed at long-term reserve and
production growth in the upstream segment and increased capacity and efficiency
in the downstream segment. Current operational performance and the new joint
venture should support our growth oriented investment plans with higher levels
of cash flow from operations in coming years", says Arsen Idrisov, Managing
Director of Alliance Oil Company.

For further information please contact:
Arsen Idrisov, Managing Director, Alliance Oil Company, Tel.: [phone]
Eric Forss, Chairman, Alliance Oil Company, Tel.: [phone]

Alliance Oil Company Ltd is a leading independent oil company with vertically
integrated operations in Russia and Kazakhstan. Alliance Oil has proved and
probable oil reserves of 638million barrels and downstream operations that
include the Khabarovsk refinery and the leading network of gas stations and
wholesale oil products terminals in the Russian Far East. Alliance Oil's
depository receipts are traded on the Nasdaq OMX Nordic under the symbol AOIL.