West Siberian and Alliance Group sign binding agreement

West Siberian and Alliance Group signed an agreement to create a leading independent, fully integrated oil company operating in Russia and Kazakhstan, listed on the OMX Nordic Exchange Stockholm. The combined group will have proved and probable oil reserves of 484 1) million barrels, production of close to 51,000 barrels per day, refining capacity of 70,000 barrels per day, a network of 255 gas stations and 24 wholesale oil terminals. The transaction will have a substantial positive impact on WSR's revenue, EBITDA and earnings.

A Special General Meeting will be held on March 3, 2008 to approve the transaction.

West Siberian Resources Ltd and the shareholders of OJSC Oil Company Alliance have signed a binding Contribution Agreement as was envisaged by the Memorandum of Understanding (MOU), which was announced on January 15, 2008. Under the Contribution Agreement, Alliance Oil Shareholders will contribute the entire share capital of Alliance Oil to WSR in exchange for WSR issuing to Alliance Oil shareholders 1,783,540,968 ordinary shares (the "Merger"). Warrants to subscribe for 99,682,500 ordinary shares at an exercise price of SEK 6.21 per share shall also be issued as part of the Merger. Accordingly, members of the Bazhaev family, who currently control Alliance Oil, will become the largest shareholders in the combined group ultimately holding 60 per cent of the fully diluted share capital post completion of the Merger.