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Global Synergies

Global Synergies. Investment Highlights. Leading producer of value-added steel pipes for the oil & gas industry 12% global seamless OCTG(1), 60% Russian seamless OCTG and 1 7% of the U.S. OCTG market in 1H 2010. Global market leader.

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Global Synergies

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  1. Global Synergies

  2. Investment Highlights • Leading producer of value-added steel pipes for the oil & gas industry • 12% global seamless OCTG(1), 60% Russian seamless OCTG and 17% of the U.S. OCTG market in 1H 2010 Global market leader • Strong steel pipe industry fundamentals driven by robust demand for oil & gas • Consolidated industry with significant barriers to entry • Demand for seamless OCTG expected to experience significant growth Favourable industry dynamics • Approximately 75% of 1H 2010 shipments went to the oil & gas sector in 1H 2010 • Strategic partnerships with oil & gas majors • Ongoing cooperation with multinational oil & gas companies Strategic supplier to the oil & gas sector • Structural cost advantages over major international competitors • Fully vertically integrated seamless pipe production (upstream and downstream operations) Vertically integrated low cost producer • Strategic Investment Programme (2004-14) aimed at 48% capacity increase • Ability to efficiently integrate acquired businesses and realise synergies • Commitment to maintain and improve credit ratings Growth potential and deleveraging 1H 2010 2009 2006 2007 2008 Key performance figures Revenue, US$ mln 3,402 4,179 2,566 3,461 5,690 920 415 800 1,047 328 EBITDA, US$ mln 1 Notes: (1) OCTG - Oil Country Tubular Goods

  3. Global Operational and Sales Footprint Steel tubular industry leader TMK’s strategic positioning made it the steel tubular industry leader, with nearly 4 million tonnes sold in 2010. Sinarsky Moscow Seversky RosNITI Cologne Calgary Kaztrubprom Volzhsky Resita Tagmet Astana Zurich Chicago Camanche Artrom Baku Ambridge Lecco Geneva Brookfield Koppel Beijing Ashgabat Production & Services Wilder Catoosa Blytheville Houston Odessa Marketing subsidiaries & representative offices Dubai Baytown R&D Singapore Cape Town 2 Note: *Does not include ULTRA Premium connections of 520,000 joints Source: TMK accounts

  4. 1H’10 Cash Cost per tonne (US$) Low gas prices Favorable unit labor cost Low raw materials costs Low regulated energy prices • Gas price, US$/’000 m3 • 88 in Russia • 400 in Europe • Labor cost, US$/’month • 768 TMK • 750 Russia • 4,200 U.S. • 5,900 Germany • Scrap purchase price, US$/’tonne • 350 TMK • 410 Shredded FOB Rotterdam • 545 DRI • Electricity prices, US$/MWh • 80 Russia • 100 China • 90 U.S. • 100 Germany Global Leader in Cost Efficiency Russia is one of the lowest cost regions for steel production Source: TMK data (1H’10 - 2009 estimates) * Cash cost per tonne is calculated as (cost of sales minus depreciation) divided by sales volumes 3 3

  5. TMK Shipments by Industry (2009) World Tube Market Segmentation (2009) Segmenting the Global Pipe Market Consolidated industry with significant barriers to entry World Steel Industry Market Concentration (2009) World Seamless OCTG Market Concentration (2009) Arcelor Mittal 6% TMK (13%) Hebei Iron & Steel 3.3% HighlyConsolidated Pipe Industry Baosteel 3.2% POSCO 2.5% WuhanIron & Steel2.5% Top 6 76% Others 24% Others 82.5% Other 12% LD Welded 17% Machine Building 5% TMK’s product mix is geared to meet the needs of the energy industry OCTG 7% Constructionand PublicUtilities 16% IndustrialWelded 49% Line Pipe 3% Seamless Oil & Gas 67% Industrial 18% Welded Line Pipe 4% Welded OCTG 2% 4 Source: Company data and estimates, industry sources, WSA, World steel in figures

  6. Russian Drilling - Moving East for Growth The increasing complexity of oil and gas production in Russia is expected to increase demand for higher value-added products Meters drilled Arctic offshore Timan Pechora Eastern Siberia WesternSiberia Sakhalin Volga Caspian Conventional Regions Unconventional Regions 5 Source: TMK estimates, VTB Capital

  7. Russian LD Demand Drivers Large-diameter pipe demand to remain robust as regions of production continue to move further away from consumption centres Bovanenkovo Shtokman Yamal Europe Indiga Yamal Barents Sea Kharyiga Urengoy Timan Pechora Murmansk – Volkhov Purpe - Samotlor Ukhta Eastern Siberia Vyborg Western Siberia Yakutsk Altai Project Nord Stream ESPO -2 Pochinki – Gryazovets Oil Pipelines Syzran BTS-2 Tengiz Gas Pipelines Novorossisk Beregovaya Sakhalin – Khabarovsk – Vladivostok Caspian K Tonnes TBP Blue Stream Estimated Russian LD Demand 2011-2015 South Stream TMK 9M’10 Tonnes Type 6 Source: TMK estimates, Gazprom

  8. TMK IPSCO – US Market Penetration Camanche, IA Brookfield, OH Koppel, PA Bakken Geneva, NE Gammon Marcellus Antrim Hilliard-Baxter-Mancos Catoosa, OK New Albany Niobrara Ambridge, PA Blytheville, AR Woodford Fayetteville Barnett-Woodford Barnett Odessa, TX Haynesville Eagle Ford Baytown, TX Houston, TX Wilder, KY Seamless Welded Finishing Steel Major Gas Shale Plays Major Oil Shale Plays Source: TMK, as of September 2010, Energy Information Administration 7

  9. US Drilling – Stronger than Ever (active rigs) (months) Drilling activity brought months of OCTG supply back to normal. Premium tubular content increasing with unconventional drilling activity. Oil drilling and liquids rich gas plays have kept activity levels on the rise Vertical - 32% Horizontal - 55% Directional - 13% Gas Oil 8 8 Source: TMK & industry estimates, Baker Hughes

  10. Lower Break-even Costs Encouraging Drilling The industry has traditionally viewed $5 to $6 as the economic drilling price of gas, but a recent study estimates surprisingly low break-even costs for the major shales. Lower break-even costs will allow the higher rig count to continue despite lower natural gas price forecasts. 9 9 Source: EIA Short Term Energy Outlook November 2101, Reuters News Service, CME Group, Credit Suisse

  11. Shopping Spree Over $60 billion in shale M&A activity over the last twelve months Royal Dutch Shell offers $4.7 billion for Marcellus shale gas specialists, East Resources, Inc. Bakken Major Gas Shale Plays Major Oil Shale Plays Gammon Antrim Marcellus Hilliard-Baxter-Mancos Chevron Corp., agrees to buy Atlas Energy Inc. for $3.2 billion, giving it access to the Marcellus. Q4 2009, ExxonMobil’s $41 billion acquisition of XTO Energy. New Albany Woodford Fayetteville Barnett Haynesville Barnett-Woodford CNOOC offers $1.08 billion for a one-third stake in Chesapeake Energy Corp.’s Eagle Ford project. Reliance Industries commits $2.8 billion gains to access the Marcellus shale in Pennsylvania with Atlas Energy, and the Eagle Ford shale in Texas with Pioneer Natural Resources. Eagle Ford STATOIL of Norway agreed to pay $843 million to set up Eagle Ford JV with Talisman Energy Inc. 10 Source: Price Water House Coopers, Wood Mackenzie, Reuters News Services

  12. Growth and Added Value Production Seamless Threading PremiumConnections Heat Treating Steelmaking Longitudinal large diameter Target/’10, % 2010 ’10/’05, % 2005 Target capacity * 21% 3,670k tonnes 49% 2,040k tonnes 3,035k tonnes 9% 2,103k tonnes 2,300k tonnes 166% 790k tonnes 23% 110% 1,880k tonnes 730k tonnes 1,530k tonnes - - 450k tonnes 37% 330k tonnes - - 650k tonnes - 650k tonnes 2,350k tonnes 3,700k tonnes 10% 43% 3,350k tonnes 11 11 * : TMK estimates

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