Вариант II review of main activities

Technical Supervision and Expert Review of the Projects

Pursuant to the Company directive Strojneft TSUP Ltd. was tasked to arrange for technical supervision at the oil trunk pipeline facilities.

Based on the results of the bidding for the work to provide independent technical supervision Strojneft TSUP Ltd. concluded a contract with Dianeks Ltd.

The total staff of Dianeks Ltd. as at the end of 2003 was 689 employees. Dianeks Ltd. operates 10 NDT laboratories.

At the end of 2003 the number of projects under the Dianeks Ltd. supervision constituted 587 facilities, where construction and installation activities were carried out by 561 contractors.

The technical oversight activities are carried out to ensure in compliance with the procedural rules, the in-process inspection throughout the entire progress of construction and installation works, starting from granting the access to the facility for the construction organization and through the facility acceptance for operation.

The technical supervision has made it possible to put an effective barrier to defective construction and installation works and prevent deviations from the design concepts.

In 2003 the Services were established to control the technical oversight performance. The interaction between these Services, management of the subsidiaries – oil trunk pipelines, and technical supervision Services afforded to expeditiously act upon the contractors to ensure they eliminate the revealed non-conformances and deficiencies.

On the whole the implementation of the independent technical supervision over the construction activities at the oil trunk pipeline facilities has substantially improved the quality of construction and installation works, and, consequently, the future reliability of the constructed or overhauled facilities of the oil trunk pipeline system.

With intent to enhance the quality of design estimates the expert review departments of design estimates were established within the Company structure. All 100 % of design documents and estimates prior to its issue for construction / manufacture has been reviewed by these departments. The expert review departments have reviewed the total of 2,694 designs. Additionally, 1,742 statements of work for designing the facilities envisaged by the 2005 – 2006 plans, and 559 site work execution programs for the facilities scheduled for 2004 were subject to expert review.