PRESENTATION FOR INVESTORS AND SHAREHOLDERS For 2016

27 February 2017 Anton Fedorov Function for Finance, Economics, Planning and Accounting

• 5 exploration wells were drilled

• Oil deposit Iđoš was discovered

• The existing gas reservoir was confirmed and a new one discovered in Begejci

• Finalised and presented regional model of the Pannonian Basin

• Completed drilling of well RAG Kiha-004

• Completed interpretation of data for blocks Ex-7 and Ex-8

• Completed testing of well Jimbolia-6

• Conducted geo-chemical works on fields in block Istočna Hercegovina

2

NIS in 2016 Exploration and Production

• Signed contract on the implementation of project „Bottom of the barrel“

• Capital overhaulr conducted in September

• Optimised basket of raw materials – processing of new types of crude oil Kirkuk and Forcados

• Completed project for in-line blending of gasoline

• Heat exchanger Packinox put into operation

• Pančevo Oil Refinery – pilot project for OMS implementation

3

NIS in 2016 Refining

• Completed total reconstruction of 6 petrol stations in Serbia

• Introduction of new branded fuel – G-Drive Diesel, G-Drive 100 and Ultra D

• Import of new types of crude oil and lower import premiums for CPC and REB realised

• 8 new road tank cars for jet fuel, 2 sets of road tank cars for light petroleum products and 6 semi-trailers for LPG introduced into exploitation

• Loyalty programs

4

NIS in 2016 Sales and Distribution

• Conducted tender procedure for the selection of a bidder for project “ТЕ-ТО Pančevo“ and share capital was paid

• Acquired the status of a privileged producer of electricity for the project "Wind Park Plandište“

• Small power plant Majdan put into operation

• CNG station “Čačak 1“ put into operation

• Project of building the station for CNG supplying "Žarkovo 2“ started

• Construction of the CNG plant at the deposit "Ostrovo" is in its final stage

• The volume of electricity trading > 2TWh

5

NIS in 2016 Energy

USD/RSD exchange rate

2% Price of crude oil Urals RCMB, $/bbl

-18%

Macroeconomic indicators Stable exchange rate, lower crude oil price

6

100

105

110

115

120

I III V VII IX XI

2015

Average in 2015

2016

Average in 2016

25

35

45

55

65

I III V VII IX XI

2015

Average in 2015

2016

Average in 2016

HSE indicators Positive trend

7

Transparency increase LTIF RAR

2015 2016

17,873 51,421

1,186 902

118 105

10 6 Major events

Medium events

Small events

Potential events

3.03

2.2 1.63

2015 2016 Plan2016

2016

Plan2016

205

0.35 0.32 0.32

2015 2016 Plan2016

2016

Plan2016

2015

46%

26%

9% 0%

Key indicators NIS Group

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Key indicators Unit measure 2016 2015 ∆

Urals $/bbl 42.1 51.5 -18%

Net profit billion RSD 15.0 14.6 +3%

EBITDA billion RSD 39.8 46.5 -14%

OCF billion RSD 41.2 51.0 -19%

Accrued liabilities for public revenues billion RSD 163.3 151.9 +7%

Crude oil and gas production thous. t.o.e. 1,463 1,577 -7%

Scope of crude oil and semi-finished products refining thous. tons 3,311 3,281 +1%

Total trade in petroleum products thous. tons 3,340 3,254 +3%

CAPEX billion RSD 26.1 30.3 -14%

Total bank indebtedness (debt to banks and letters of credit)

million USD 666 675 -1.5%

Motor fuel market trends 2016/2015

9

Motor fuel consumption in the region is on the increase: - Macroeconomic trends - Increase in fuel consumption in the transport

segment, processing industry and construction.

Serbia

• Diesel consumption is on the increase: — Infrastructure works, — Improved results in the processing industry, — Good agricultural season, — Transport development.

• Part of Diesel fuel consumption moved to the grey area • Cross-border fuel procurement in B&H and Macedonia

Slovenia

3.1%

Croatia

1.9%

Bosnia and Herzegovina

1.9% Bulgaria

2.2%

Romania

3.5%

Hungary

3.5%

Serbia 2.3%

772 (23%)

923 (26%)

2,592 (77%)

2,614 (74%)

3,364 3,538

2015 2016

NIS

Others

Market share – Serbia Petroleum products market

• Total consumption of petroleum products is on the increase

• Growth in the consumption of primary and motor fuel, diesel, jet fuel, bitumen and oil fuel:

— Lower prices

— Infrastructure works

• Lower consumption of LPG and heating oil

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5.2% Scope of petroleum products market, thous. tons

Lower NIS market share due to an increased quantity of petroleum products in the so called „grey area“ which is, as a segment, unavailable for legal participants on the market.

Market share – Serbia Retail market

• Retail market developed by 1.9%

• Consumption grew due to:

— Lower prices

— Transport development

— Larger fleet

— Transit traffic development

11

951 (58%)

951 (57%)

679 (42%)

710 (43%)

1,630 1,661

2015 2016

NIS

Others

1.9% Retail market, thous. tons NIS increased its market share through increased sale in gasoline and diesel, as well as motor vehicle gas.

Market share – region 2016/2015

12

Bosnia and Herzegovina

No. of PS: 35* % total market: 11.0% % retail market: 10.4%

Romania

No. of PS: 18 % total market: 0.6% % retail market: 0.9%

Bulgaria

No. of PS: 35 % total market: 4.3% % retail market: 4.3%

*there are two more petrol stations which operate in DODO regime

Operating indicators Exploration and Production

• Fulfilled hydrocarbons production plan:

— Domestic crude oil - +18.5 thous. tons

— Domestic gas - +0.1%

— Angola - -15%

• GTA application

• The pace of the base production decline was held at the planned level

Estimated increase in hydrocarbon reserves is

3.4%

1,058 967

460 444

59 52

1,577 1,463

2015 2016

Angola

Domesticgas

Domesticcrude oil

-7% Crude oil and gas production, thous. t.o.e.

13

Operating indicators Refining

• Scope of refining is in accordance with market needs and refining optimisation

• Scope of refining is larger than planned:

— Increased crude oil refining efficiency

— Increased end of VGO distillation

— Refining of new types of crude oil

1,034 925

1,902 2,180

346 207 3,281 3,311

2015 2016

Semi-finishedproducts

Imported crude oil

Domestic crude oil

+1% Refining of crude oil and semi-finished products, thous. tons

14

Operating indicators Sales and Distribution

• Retail sale in Serbia – 5% increase

• Wholesale in Serbia – at the same level

• Export –1% drop

• Foreign assets –31% increase

681 712

194 256

1,903 1,900

475 472

3,254 3,340

2015 2016

Export

Whole sale -Serbia

Foreign assets

Retail sale -Serbia

+3% Sales volume, thous. tons

15

Financial indicators Net profit

16

• Measures for increasing operating efficiency and costs reduce

• Increase of sales volumes

• Smaller negative FX differences

14.6 15.0

2015 2016

+3% Net profit, billion RSD

The effect of decrease in the price of oil and petroleum products in the market was partially cushioned by the effects of operational effectiveness improvement measures.

Financial indicators EBITDA

• Negative effect of crude oil prices

— Drop in the price of Urals crude oil by 18% compared to 2015

46.5 39.8

2015 2016

-14% EBITDA, billion RSD

17

Financial indicators OCF

• Smaller inflows

— Low petroleum products prices

• Larger outflows

— Greater liabilities towards the state

18

51.0 41.2

2015 2016

-19% OCF, billion RSD

Financial indicators CAPEX

19

30.3 26.1

2015 2016

-14% CAPEX, billion RSD

68% 4%

14%

5% 7%

2% Exploration andproductionServices

Refining

Sales&Distribution

Energy

Corporate center

CAPEX per segments

Measures for increasing operational efficiency Effect on EBITDA, billion RSD

20

8.6

2.8

2.4 0.8

2.9 0.7

0.7

1.1 8.6

2.8 11.4

Exploration andProduction

Block

Services Block Refining Block Sales andDistribution

Block

Energy Block CorporateCenter

NIS 2016 Preventeddamage

Total NIS 2016

Measures Prevented damage

Indebtedness towards banks Maturity and currency structure of the loan portfolio

21

201

25

41

4

86

32

52

86

105

104

392

430

330

264

358

430

560

499

518

527

492

200

155

116

99

94

82

72

73

71

70

66

793

611

446

403

455

598

664

623

676

702

662

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Short term

Medium term

Long term

-1.5%

Debt towards banks, million USD

233

33

13

14

34

28

12

10

4

6

3

793

611

446

403

455

598

664

623

676

702

662

1.026

644

458

418

489

626

675

633

680

708

666

31.12.'09

31.12.'10

31.12.'11

31.12.'12

31.12.'13

31.12.'14

31.12.'15

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30.09.'16

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Letters of credit

Debt to banks

-0.2%

Indebtedness towards banks, million USD

Debt structure: USD 51% EUR 48% Other 1%

GPN loan -13% 302 mn EUR

Comparative analysis

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EBITDA margin (%) 2. EBITDA/FTE (thous. USD) 4. Daily turnover (t/day) 5.&3.

Light products share (%) 5. OPEX ($/boe) 2.

30.4

20.8

17.0

17.0

14.3

19.9

160.5

82.9

82.3

63.7

30.0

83.9

8.9 7.5

6.9 5.9 5.9 5.6

6.8

86.8

84.9

78.1

76.0

74.1

80.3 11.9

11.6

5.8

6.6

N/A

1.5 7.3

9.3

Conclusion

Average price of Urals crude oil in 2016 is smaller than average price in 2015

Limited possibility of long-term indebtedness

Negative effect of the “raw“ market

Slower implementation of a project in the field of “Energy“

23

Net profit increase

Resource base development

Crude oil and gas production is beyond planned even in case of reduced scope of investments

Increased sales and distribution

Successfully conducted capital workover in Pančevo Oil Rafinery

Successful continuation of the operational efficiency increase program

APPENDIX

Business Plan 2017 Macro assumptions and priorities

25

Macro assumptions Priorities

Investments

Business Plan 2017 Upstream

26

Reserves dynamic, thous. t.o.e.

Oil and gas production, thous. t.o.e.

'08 '09 '10 '11 '12 '13 '14 '15 '16 '17 BP '18 E '19 E

Angola and concessions

Domestic gas

Domestic oil

• Increase the reserves

• Improving efficiency of Geological-exploration works (GEW)

• Implementation of projects related to GEW of hard recoverable reserves and unconventional resources

• Increasing production and technology efficiency

'09 '10 '11 '12 '13 '14 '15 '16 '17 BP '18 E '19 E

Business Plan 2017 Downstream

• Activities on the “Bottom of the barrel“ project

• Implementation of the OMS

• Increasing market share in motor fuels market

• Further development of premium motor fuels

27

Refining volume, thous. tonnes

Sales volume, thous. tonnes

'09* '10* '11 '12 '13 '14 '15 '16 '17 BP '18 E '19 E

'09* '10* '11 '12 '13 '14 '15 '16 '17 BP '18 E '19 E

CAPEX, bn RSD

Business Plan 2017 CAPEX

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26.1 28.6

2016 2017 BP

58%

4%

20%

14%

3%

1% Exploration andproductionServices

Refining

Sales&Distribution

Energy

Corporate Centre

CAPEX per segments +10%

“The implementation of the adopted Business Plan will make it possible for NIS to maintain its profitability next year and continue implementing key investment projects, which are of considerable importance to the economy of Serbia and the Balkans as a whole. We take pride in the fact that NIS has had a good performance, showing resilience to the influence of the unstable macro environment. In 2017, NIS is going to continue implementing the business strategy whose main objective is – to become the regional energy leader.”

Vadim Yakovlev,

Chairman of the Board of Directors of NIS j.s.c. Novi Sad

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