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JSFC Sistema (SSA)

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Tuesday 21 December, 2010

JSFC Sistema

SISTEMA ANNOUNCES FRAMEWORK AGREEMENT WITH ONCG...

SISTEMA ANNOUNCES FRAMEWORK AGREEMENT WITH ONCG VIDESH

JSFC Sistema

SISTEMA ANNOUNCES FRAMEWORK AGREEMENT WITH ONCG VIDESH

Moscow, Russia – December 21, 2010 – Sistema (LSE: SSA), the largest diversified public financial corporation in Russia and the CIS, which invests in, and is a major shareholder of, companies operating in different industries, today announced that during the official visit of the President of the Russian Federation Dmitry Medvedev to India, Sistema signed a Framework Agreement (“Agreement”) with the Indian national oil and energy holding company ONCG Videsh.

Within the Agreement, the parties agreed to consider opportunities for a potential transaction involving Sistema’s majority stake in JSC Bashneft and 49% stake in RussNeft, each of which owns and operates numerous fields and refining assets, and ONCG Videsh’s 100% stake in Imperial Energy Corp., which owns and operates fields in Russia, along with any other oil and gas assets which the aforesaid companies may acquire before definitive agreements are signed, plus possible cash investments. The parties further agree to consider joint investments in each other’s existing and future exploratory assets in key countries.

The provisions of this Agreement are intended solely as the basis for further discussions between the parties on the scope, timeline and valuation parameters of a potential transaction, and no binding commitments of any kind or nature will arise between ONGC and Sistema until the parties’ execution of binding legal documentation and receipt of any necessary corporate and governmental approvals.

ONCG Videsh, a subsidiary of Indian State Oil and Gas Corporation (ONGC), has a proven track record of mutually beneficial co-operation with the Russian Government. ONGC started its operation on the Russian oil and gas market in 2001 when it acquired a stake in “Sakhalin-1.” In 2009 ONGC bought Imperial Energy which owned oil assets in Tomsk region, Russia, for approximately US$ 2.4 billion.

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For further information, please visit www.sistema.com or contact:

Investor Relations   Public Relations
Evgeniy Chuikov Vsevolod Sementsov
Tel: +7 (495) 692 1100 Tel: +7 (495) 730 1705

ir@sistema.ru

pr@sistema.ru

Sistema is the largest diversified public financial corporation in Russia and the CIS, which invests in and is a major shareholder of companies serving over 100 million customers in the sectors of telecommunications, high technology, oil and energy, radars and aerospace, banking, retail, mass-media, tourism and healthcare services. Founded in 1993, the company reported revenues of US$ 7.3 billion for the third quarter of 2010, and total assets of US$ 41.6 billion as at September 30, 2010. Sistema’s global depository receipts are listed under the symbol “SSA” on the London Stock Exchange. Sistema’s ordinary shares are listed under the symbol “AFKS” on the RTS Stock Exchange, under the symbol “AFKC” on the MICEX Stock Exchange, and under the symbol “SIST” on the Moscow Stock Exchange (MSE).

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Sistema. You can identify forward looking statements by terms such as “expect,” “believe,” “anticipate,” “estimate,” “intend,” “will,” “could,” “may” or “might” the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. In addition, there is no assurance that the new contracts entered into by our subsidiaries referenced above will be completed on the terms contained therein or at all. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industries, as well as many other risks specifically related to Sistema and its operations.

This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares or other securities of JSFC Sistema and/or any of its subsidiaries and affiliated companies, nor shall any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto, nor does it constitute a recommendation regarding the shares or securities of JSFC Sistema and/or any of its subsidiaries and affiliated companies.