"The company's output will be 32 million tons of oil this year, which is a million tons less than in 2005," said Alexander Ryazanov, who is also a deputy chairman of energy giant Gazprom. "The reason is that the company's profits were already on decline when we bought it."
He said the company had failed to execute its business plan in either 2004 or in 2005, and production levels were lower than expected.
Ryazanov said that output could have plunged by five million tons if it had not been for considerable investment.
Gazprom bought a 72.7% share in Sibneft, previously controlled by tycoon and Chelsea FC owner Roman Abramovich, in September 2005 for $13.1 billion.