JSC  "Ventspils  nafta" is a Group company according to the legislation

of  Republic  of  Latvia  and  its  business.  The company continues to

upgrade  its  management  and  supervisory  system  in  line  with  the

respective  standards  by separating the holding company functions, and

by grouping the group companies according to lines of business.

The  purpose  of  the restructuring of JSC "Ventspils nafta" management

structure,  initiated  at the beginning of the year, is to optimise the

co-ordination of the Group operations and investments. This is expected

to  enhance  the development of individual businesses within the group,

consequently,  increasing  the value of each company and the Group as a

whole.  Segregating  the  present lines of business in specialised line

companies  will  increase  the  management  capacity,  will improve the

financial  accountability and utilisation of resources. This management

model has been proposed by Ernst & Young Baltic.

The  core  business  of  "Ventspils nafta" is reloading of oil products

imported   from   Russia.   The   company,   following  the  advice  of

international  auditors,  continued  seeking for diversification of the

business  risks  arising  form  political  and  economic  factors. As a

result,  the  company  has  acquired  ownership interest in a number of

companies not related to transit business, and has gradually obtained a

structure  typical for a group. Thus, over a six year period "Ventspils

nafta"  - initially only an oil product reloading terminal and oil pipe

owner  SIA "LatRosTrans" - has developed into a Group with six business

lines:  transit,  printing,  publishing,  hotel  services, real estate,

shipping.  SIA  "Nafta holdings", founded by "Ventspils nafta", used to

deal with the company investment projects and investment management.

At  the  same time, the development of "Ventspils nafta" management and

supervisory  systems  lagged  behind.  The  key  functions of a holding

company  were executed by the oil product reloading company itself. Now

it  is  planned  to  hand  over  the  holding  company functions to JSC

"Ventspils  nafta".  Some  of  the  companies will be founded anew. The

existing  daughter  companies  include SIA "LatRosTrans", JSC "Latvijas

kuģniecība",  JSC  "Preses  names", JSC "Mediju names". SIA "Nekustamie

īpašumi  VN"  is already operating as a holding company for real estate

management.

SIA  "Ventspils  nafta  termināls" will be founded anew and will handle

the  oil  product  transit  business currently run by "Ventspils nafta"

itself.  The  share  capital  will  be  increased  on  the  account  of

investment  in  kind  -  fixed  assets  of the terminal. The former JSC

"Ventspils  nafta"  employees  will  be  in  the  new Management Board:

Rolands   Kalniņš,  Aleksandrs  Antipins,  Vjačeslavs  Verņuks,  Marika

Bīdermane, Raimonds Grīniņš.



SIA  "Ventspils  nafta  termināls", as well as SIA "Rīgas līcis VN" and

SIA  Nekustamie  īpašumi  VN"  will  be  100%  "Ventspils nafta"-owned.

Decisions   on   founding   other  new  companies  will  be  passed  on

case-by-case basis.