Investor Day 2014 · 2000 2005 2010 2015 2020 2025 2030 mln Plants under construction Operating plants Consumption consensus forecast Pessimistic consumption forecast Optimistic consumption
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Investor Day 2014
March, 2014
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Investor Day 2014
Agenda
Export
Alexander Medvedev
Deputy Chairman of Gazprom Management Committee
CEO of Gazprom Export
Strategy
Finance
Dmitry Lyugai
Member of Gazprom Management Committee
Head of the Prospective Development Department
Andrey Kruglov
Deputy Chairman of Gazprom Management Committee
Head of the Department for Finance and Economics
Gazprom Neft Gazprom Power Generation
Denis Fedorov
Head of Gazprom Directorate for Development of Power
and Heat Generation
CEO of Gazprom Energoholding
Alexei Yankevich
Member of the Management Board of Gazprom Neft
Deputy CEO for Economics and Finance
of Gazprom Neft
1
Presentation of gas business
Transportation Oleg Aksyutin
Member of Gazprom Management Committee
Head of the Gas Transportation, Underground Storage
and Utilization Department, CEO & Executive Member
of the BoD of South Stream Transport B.V.
Special sections
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Disclaimer
This presentation has been prepared by OJSC Gazprom (the “Company”), and comprises the slides for a presentation to investors concerning the Company.
This presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any
shares or other securities representing shares in the Company, nor shall it or any part of it nor the fact of its presentation or distribution form the basis of, or be
relied on in connection with, any contract or investment decision.
No reliance may be placed for any purposes whatsoever on the information contained in this presentation, or any other material discussed at any presentation
or on its completeness, accuracy or fairness. The information in this presentation should not be treated as giving investment advice. Care has been taken to
ensure that the facts stated in this presentation are accurate, and that the opinions expressed are fair and reasonable. However, the contents of this
presentation have not been verified by the Company. Accordingly, no representation or warranty, express or implied, is made or given by or on behalf of the
Company or any of its members, directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information or
opinions contained in or discussed at this presentation. None of the Company or any of their respective members, directors, officers or employees nor any
other person accepts any liability whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection
therewith.
The information in this presentation includes forward-looking statements. These forward-looking statements include all matters that are not historical facts,
statements regarding the Company’s intentions, beliefs or current expectations concerning, among other things, the Company’s results of operations, financial
condition, liquidity, prospects, growth, strategies, and the industry in which the Company operates. By their nature, forward-looking statements involve risks
and uncertainties, including, without limitation, the risks and uncertainties to be set forth in the prospectus, because they relate to events and depend on
circumstances that may or may not occur in the future. The Company cautions you that forward looking statements are not guarantees of future performance
and that its actual results of operations, financial condition and liquidity and the development of the industry in which the Company operates may differ
materially from those made in or suggested by the forward-looking statements contained in this presentation. In addition, even if the Company’s results of
operations, financial condition and liquidity and the development of the industry in which the Company operates are consistent with the forward-looking
statements contained in this presentation, those results or developments may not be indicative of results or developments in future periods.
The information and opinions contained in this presentation are provided as at the date of this presentation and are subject to change without notice. No
person is under any obligation to update or keep current the information contained herein.
By attending the presentation you agree to be bound by the foregoing limitations.
The following sources are used in the presentation: BP Statistical Review of World Energy 2013 (June 2013); IEA, World Energy Outlook 2013, New Policies Scenario (November 2013); CEDIGAZ Statistical Database (August 2013);
EIA, International Energy Outlook 2013, Reference case (July 2013); Wood Mackenzie; Platts; FactSet; Bloomberg
Calorific value of natural gas = 8,850 kcal/m3 (20 0С )
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Part 1. Strategy
Dmitry Lyugai
Member of Gazprom Management Committee
Head of Prospective Development Department
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Strategy - Investor Day 2014
World gas demand 2030
24%
33%
30%
4% 9%
23%
28% 26%
6%
17%
Gas OilCoal NuclearRenewables
SHARE OF NATURAL GAS IN WORLD TOTAL PRIMARY ENERGY CONSUMPTION NATURAL GAS CONSUMPTION BY REGION
2030 forecast
2012
26%
5%
15% 20%
12%
3%
19%
North America
Central and SouthAmerica
OECD Europe
Other Europe and Eurasia
Middle East
Africa
Asia Oceania
22%
5%
13%
17%
14%
4%
25%
2012
2030 forecast
3.6 tcm
4.6 tcm
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Strategy - Investor Day 2014
-500-400-300-200-100
0100200300400
NorthAmerica
Centraland SouthAmerica
OECDEurope
OtherEurope
andEurasia
MiddleEast
Africa Asia Australia NorthAmerica
Centraland SouthAmerica
OECDEurope
OtherEurope
andEurasia
MiddleEast
Africa Asia Australia
bcm
Global gas import/export in 2030
Europe, Asia – 2 main gas import regions CIS, Middle East, Africa, Australia – 4 exporting regions North America, Central and South America gas markets are self-sufficient
NATURAL GAS CONSUMPTION AND PRODUCTION BY REGION IN 2012 AND 2030
WORLD NET NATURAL GAS TRADE BY REGION IN 2012 AND 2030
0
200
400
600
800
1000
1200
NorthAmerica
Centraland SouthAmerica
OECDEurope
OtherEurope
andEurasia
MiddleEast
Africa Asia Australia NorthAmerica
Centraland SouthAmerica
OECDEurope
OtherEurope
andEurasia
MiddleEast
Africa Asia Australia
bcm
Consumption Production
2012 actual 2030 forecast
2012 actual 2030 forecast
net
imp
ort
n
et e
xpo
rt
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Strategy - Investor Day 2014
100
200
300
400
500
2010 2015 2020 2025 2030
bcm
78
74 74 73
0%
20%
40%
60%
80%
100%
2010 2015 2020 2025 2030
Gazprom at the Russian domestic market
TOTAL FINAL CONSUMPTION
22%
47%
19% 12% 19%
52%
18% 11%
2012
STRUCTURE OF GAZPROM’S GAS SALES REVENUE(1), 2012
Source: Base Prospectus. 1. Not including custom duties
GAS PRODUCTION STRUCTURE IN RUSSIA
Independent gas producers
Russian Energy Strategy target
GAS DELIVERIES TO RUSSIAN CONSUMERS *
288 290 275
683 795
815 2 373
2 745 2 961
0
500
1 000
1 500
2 000
2 500
3 000
3 500
0
300
600
900
2010 2011 2012
RR
/ 1
000
cm
bcm
; RR
bln
Domestic Market Volumes (bcm)
Revenue (RR bn)
Domestic Average Price (RR / 1 000 cm)
* - incl. gas purchases from other companies
310 350
19%
51%
19% 11%
2008
Gas
Oil Coal
Other
Energy Strategy of Russia Adopted
Gas
Oil Coal
Other
Gas
Oil Coal
Other
Gas
Energy Strategy of Russia
Project
Gas share stabilization in Fuel and Energy Balance
2030
20%
52%
15% 13%
Oil Coal
Other
51%
20%
29%
Europe
FSU Countries
Russia
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Strategy - Investor Day 2014
29%
0
100
200
300
2010 2015 2020 2025 2030
bcm
JSC "Gazprom" Other sources of gas
0
100
200
300
400
500
600
700
800
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
bcm
Europe: Gazprom’s traditional market
SHALE GAS IN EUROPE AND CIS
TURKEY 5*
UKRAINE 0* POLAND
49*
GREAT BRITAIN 4*
FORECAST – GAS PRODUCTION VS. CONSUMPTION IN EUROPE
207 517
GAZPROM’S SHARE AT THE EUROPEAN MARKET
Consumption
Production
2012 2030
■ regasification terminals network development ■ policy approach – diversification of suppliers and supply routes ■ regulatory frameworks in energy sector become tougher ■ policies on energy efficiency ■ renewable sources of energy subsidizing
■ decrease of indigenous gas production in Europe ■ no success in shale gas developments ■ slow down of nuclear energy development ■ increase of gas consumption in transportation sector ■ new sectors of gas consumption
GAZPROM’S PIPELINE GAS DELIVERIES TO EUROPE
Source: Wood Mackenzie, EIA, Platts, ERI RAS, IEA, IHS, Rystad Energy, BP
28% 26%
Production 0 bcm 5-60 bcm
2030
* - number of wells, end 2013
2013
Min
Max
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Strategy - Investor Day 2014
Gazprom: upstream development
Yubileynoye Urengoiskoye
Pestsovoye
Bovanenkovskoye Kharasaveiskoye
Severo-Kamennomysskoye Kamennomysskoye-sea
North of West Siberia and Yamal peninsula Fields
Kirinskoye
«Sakhalin-3»
Kirinskiy licensed section
Key Gazprom gas greenfields Field productivity
in 2014-2030 period, bcm/year
Urengoyskoye (achimov deposits) 24.7 Pestsovoye (neocomian-jurassic) 2 Yubileynoye (apt-albian, senomanian deposits) 1.75 Bovanenkovskoye 115 Kharasaveiskoye 32 Severo-Kamennomysskoye 16.1 Kamennomysskoye -sea 15.1 Kirinskoye 5.5 Kirinskiy licensed section 14.6 – 16.0
Chayandinskoye 25
Kovyktinskoye 35
RUSSIA
Pre-Yamal shelf Pechorskoye Sea shelf
Kovyktinskoye
Chayandinskoye
Eastern Siberia and Far East Fields
522 540 545 555 556 549 550 462 509 513 487
96% 79% 69%
105% 106% 108% 106% 102% 108% 140%
118%
-40
10
60
110
160
0
200
400
600
800
1 000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
%
bcm
Gas production % of gas reserves replenishment
0
200
400
600
800
2012 2020min
2030min
2020max
2030max
bcm
Other new fields
East Siberia and Far East fields
Yamal Megaproject
Operating fields
DYNAMICS OF PRODUCTION AND GAS RESERVES INCREMENT PROSPECTIVE SOURCES OF GAZPROM’S GAS PRODUCTION
Gas field Continental shelf area
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Strategy - Investor Day 2014
0
200
400
600
800
2000
2005
2010
2015
2020
2025
2030
mln
t/ye
ar Plants under construction
Operating plants
Consumption consensus forecast
Pessimistic consumption forecast
Optimistic consumption forecast
Forecast of LNG demand in the world
Gazprom LNG projects
Baltic LNG
Sakhalin-2
Vladivostok LNG
Vladivostok LNG ■ Capacity – 10 mln t/year
■ Date of commissioning – 2018 (1-st line)
■ Project status – feasibility study done (February 2013)
■ Targeted markets – Japan, Korea, China,
Taiwan, Singapore, India
Baltic LNG ■ Capacity – 10 mln t/year
■ Date of commissioning – 2019 (1-st line)
■ Project status – pre-feasibility stage
■ Targeted markets – Spain, Portugal, Great Britain,
Latin America, India, small-scale LNG
Source: IНS CERA, Wood Mackenzie, Pace Global, CEDIGAZ, Poten
Operating LNG plant Prospective LNG plant
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Strategy - Investor Day 2014
Gas infrastructure development
in Eastern Siberia and Far East regions
Trunk pipeline “Power of Siberia”
Transportation site Date of put into
operation (not earlier)
Length, km
Trunk pipeline “Power of Siberia” 2019 4,000
CHINA
Production sites Date of put into
operation (not earlier)
Plateau production, bcm /year
Chayandinskoye 2019 25
Kovyktinskoye (incl. Chikanskoye field) 2021 35
Fields Pipelines: existing under construction possible designed Operating lines of LNG plants LNG plants under construction
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Strategy - Investor Day 2014
Mutual interest in gas export contract conclusion
■ DIVERSIFICATION OF EXPORT MARKETS
■ POSSIBILITY OF GAS SALES AT THE PREMIUM MARKET (APR)
■ WELL DEVELOPED RESERVES BASE RESULTING FROM
EXPLORATION IN THE EAST
■ MONETIZATION OF GAS RESERVES IN THE EAST
■ GASIFICATION OF THE EAST SIBERIA AND FAR EAST
REGIONS IN PARALLEL
CHINA
■ EXPANSION OF TRADE AND ECONOMIC COLLABORATION BETWEEN RUSSIA AND CHINA, STRENGTHING THE COUNTRIES’ POSITIONS IN THE REGION AND WORLDWIDE
■ SWITCH FROM WESTERN TO EASTERN ROUTE OF GAS DELIVERIES DURING THE NEGOTIATIONS
RUSSIA
■ DYNAMIC GAS CONSUMPTION GROWTH IN THE COUNTRY
■ LIMITED RESOURCE BASE AT THE TARGETED RUSSIAN GAS MARKETS
■ DETERIORATION OF ENVIRONMENTAL SITUATION IN THE COUNTRY
■ HIGH CURRENT AND PROSPEKTIVE COST OF GAS IMPORT (PIPELINE AND LNG) FROM OTHER SOURCES
■ SIGNIFICANT PRICE GROWTH ON GAS CONSUMPTION IN THE DOMESTIC MARKET AS A RESULT OF PRICING REFORM IN CHINA
■ NO CONSIDERABLE PROGRESS IN SHALE GAS PRODUCTION
■ DIVERSIFICATION OF IMPORT GAS SOURCES
■ PROVISION OF THE COUNTRY’S ENERGY SECURITY BY FUEL ENERGY BALANCE VIA GAS
Logo “Year of China in Russia 2007” was used in this slide.
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Strategy - Investor Day 2014
35%
20%14%
3%
29%
Yamal Megaproject
Eastern Siberia and the FarEast
Reconstruction in Transport
Reconstruction s inProduction
Other projects within UGSS
Forecast of capital investments
1.UGS is underground gas storage UGSS is unified gas supply system
Structure of CAPEX by gas business segment
EXPLORATION
PRODUCTION
TRANSPORT
(incl. UGS1)
PROCESSING
52 %
34 %
8 %
6 %
Up to 960 bn RR p.a. average annual
Structure of CAPEX by major project
exploration; existing and new
production and transport projects,
processing and LNG projects
GAZPROM
DEVELOPMENT
PROGRAM FOR A
TEN-YEAR
PERIOD
INNOVATIVE
DEVELOPMENT
PROGRAM TO
2020
GAZPROM'S
INVESTMENT
PROGRAM
NPTR – Nadym-Pur-Taz Region
Перерисовать
NPRT Yamal South Stream Eastern Program LNG Projects
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Part 2. Transportation
Oleg Aksyutin
Member of Gazprom Management Committee
Head of the Gas Transportation, Underground Storage and Utilization
Department
CEO, Executive Member of the Board of Directors of South Stream Transport B.V
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Transportation - Investor Day 2014
Gas transportation system
Total pipelines’ length – 168.3 thousand km
Number of compressor stations - 222 units
Number of gas compressor units – 3,738 units
Gross installed capacity – 43,9 million kW
Number of gas distribution stations – 3,945 units
Average length of transportation for domestic market – 2,780 km
Average length of transportation for export – 3,430 km
NORWAY
OSLO
STOCKHOLM
RIGA
HELSINKI
Tallinn
VILNIUS PSKOV
KALININGRAD
SAINT PETERSBURG
MURMANSK
KOTLAS
CHEREPOVETS
GRYAZOVETC
SYKTYVKAR
KIROV
MOSCOW TORZHOK SMOLENSK
BRYANSK
KIEV
KURSK
TULA
YELETS
OSTROGOZHSK
ROSTOV-ON-
DON
KRASNODAR ARMAVIR
NEFTEKUMSK
ASTRAKHAN
MAKHACHKALA
MOZDOK
SUKHUMI
TBILISI
EREVAN
BAKU
Caspian
Sea
ASTANA
ORSK
ORENBURG
SARATOV
PETROVSK
ALGASOVO
RYAZAN
KAZAN
SAMARA UFA
NIZHNEKAMSK
IZHEVSK
EKATERINBURG
CHELYABINSK
TYUMEN
OMSK NOVOSIBIRSK
TOMSK
PROSKOKOVO
ABAKAN
KRASNOYARSK
ULAN-BATOR
NIZHNEVARTOVSK
BOGUCHANY
NIZHNYAYA
POIMA
BALAGANSK
IRKUTSK
CHITA
SKOVORODINO
BLAGOVESHCHENSK
BIROBIDZHAN
KOMSOMOLSK-
ON-AMUR KORSAKOV
KHABAROVSK
VLADIVOSTOK
PETROPAVLOVSK-
KAMCHATSKY
ANADYR
RUSSIA
KAZAKHSTAN
Sea of Japan
CHINA
ARKHANGELSK
NOVOKUZNETSK BARNAUL
URENGOY
UKHTA
MONGOLIA CHINA AZERBAIJAN
ABKHAZIA
GEORGIA
ARMENIA
SWEDEN
FINLAND
MINSK
SOBOLEVO
BIYSK
GORNO-
ALTAYSK
JAPAN
NORTH
KOREA
ESTONIA
UKRAINE
LATVIA
BELORUSSIA
LITHUANIA
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Transportation - Investor Day 2014
Development of gas transportation system
‘Bovanenkovo — Ukhta’ pipeline
length — 1,100 km design capacity — 115 bcm p.a.
first string – 2012 second string — 2017 (plan)
‘Ukhta — Torzhok’ pipeline
length — 1,300 km design capacity — 81.5 bcm p.a.
first string launching is scheduled for 2015
Offshore part of ‘South Stream’
length — 925 km design capacity — 63 bcm p.a.
first gas supplies are scheduled for the end of 2015
Onshore part of ‘South Stream’
length — 2,506 km 10 compressor stations with a
total capacity of 1,516 МW
project to be finalized in 2018
HELSINKI
TALLINN
VYBORG SAINT
PETERSBURG
LITHUANIA VILNIUS
BELORUSSIA
RIGA
MINSK
TORZHOK MOSCOW
VOSKRESENSK
KAZAN UFA ASTANA
KAZAKHSTAN
TYUMEN
PERM
YUGORSK
PEREGREBNOYE
UKHTA
BARENTS SEA
NADYM
SURGUT
URENGOY
RUSSIA
MOLDOVA
UKRAINE
SLOVAKIA
AUSTRIA
GERMANY
SWITZERLAND
MONTENEGRO
SERBIA
MACEDONIA
ALBANIA
GREECE
BULGARIA
ROMANIA
Varna
CS Russkaya
ITALY
FRANCE
South Stream Transport B.V.
Anapa Zvornik
Svobodnica
Tarvizio HUNGARY
TURKEY
CROATIA SLOVENIA
BOSNIA AND
HERZEGOVINA
GRYAZOVETS
TULA
LATVIA
NORWAY
SWEDEN
FINLAND
ESTONIA
Yamal South Stream
‘South Stream’ pipeline route Russia – Bulgaria – Serbia – Hungary – Slovenia – Italy Branches To Croatia from Serbia To Republic of Srpska from Serbia
BOVANENKOVO
CS Pochinki
CS Mokshanskaya
CS Petrovsk
CS Zhirnovskaya
Projected CS
Existing CS
CS Volgogradskaya
CS Russkaya
Ukraine
Sea of Azov
Black Sea
CS Kubanskaya
CS Salskaya
CS Korenovskaya
CS Kazachya
CS Pisarevka
CS Shashtinskaya
RUSSIA
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Transportation - Investor Day 2014
Development of gas transportation systems
in Eastern Siberia and the Far East
Sakhalin – Khabarovsk – Vladivostok Power of Siberia
Length >1,800 km (1st section – 1350) 4,000 km
Capacity 30 bcm p.a. (1st section – 6) 61 bcm p.a.
Date of coming on stream 1st section - 2011 1st section – late 2019
1
2
3
4
Krasnoyarskiy
Irkutskiy
Yakutskiy
Sakhalin
1
2
3
4
Planned GPP and Gas
Chemical Complex
Fields
URENGOY
NIZHNEVARTOVSK
TYUMEN
OMSK
BARNAUL
NOVOSIBIRSK TOMSK
PROSKOKOVO
ABAKAN
KRASNOYARSK
BOGUCHANY
Yurubcheno-
Tokhomskoye Sobinsko-
Paiginskoye Chayandinskoye
Kovyktinskoye
BALAGANSK
IRKUSTK
SKOVORODINO
BLAGOVESHCHENSK
BIROBIDZHAN
OKHA
KOMSOMOLSK-
ON-AMUR KORSAKOV
KHABAROVSK
VLADIVOSTOK
NOVOKUZNETSK
CHINA
KAZAKHSTAN
CHINA
MONGOLIA
Malositinskoye UGS
SAKHALIN
Gas production centers
BIYSK GORNO-ALTAYSK
JAPAN
NORTH
KOREA
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Transportation - Investor Day 2014
Underground gas storage
Current underground gas storage facilities
Under-construction and planned facilities
of underground gas storage
Areas under exploration for underground
gas storage facilities
69.94 73.22 74.78
745.8
811.8
853.6
585.8 616
657.6
2013/2014F 2014/2015F 2015/2016F
Gas storage of Gazprom(1)
Operating reserve at the beginning of thewithdrawal season, bcm
Maximum daily production at the beginning of theseason, mmcm per day
Average daily production in December-February,mmcm per day
Underground gas storage
in Europe
2013F 2014F 2018F
Active volume, bcm 2.29 4.29 4.54
Daily capacity, mmcm per day 23.5 55.6 80.5
Arkhangelsk
Ukhta
Urengoy Moscow
Izhevsk
Kazan Surgut
Tyumen
Volgograd Tomsk
Novosibirsk Orenburg
Khabarovsk
Irkutsk
Saratov
Saint Petersburg Kaliningrad
BELORUSSIA
Minsk
1. Including gas storage in Belorussia
RUSSIA
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Transportation - Investor Day 2014
Gazprom energy efficiency improvement
7,3
7,96
17,6
Fuel and Energy resources
saving
Actually achieved savings in 2011-2013 – 7.3 mln toe
Reduction in specific gas
consumption for own process
needs and losses
Actually achieved reduction in 2011-2013 – 7.96%
Greenhouse gas emissions
reduction
Actually achieved reduction in 2011-2013 – 17.6 mln t
Target savings for the period till 2020 – 28.2 mln toe Target reduction for the period till 2020 – 11.4% Target reduction for the period till 2020 – 48.6 mln t
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Transportation - Investor Day 2014
Gas transportation system efficiency improvement
Increase of operating pressure up to 11.8 mPa
in the onshore of main gas pipelines and up to
22 MPа (at the offshore Nord Stream gas
pipeline)
Use of high-strength large diameter pipes with
flow coating
Use of tie-in pipeline under pressure technology
Gas pumping from linear parts of main gas
pipelines that are withdrawn for repair with the
use of transportable compressor stations
Use of renewable energy sources
Implementation of innovative technologies
31.7 30.9 30.5
29.6 29.4
25.4
27.6 27.9
25.5 25.3
20
25
30
35
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013F
Specific gas consumption for process needs
Technological losses as a percentage of the
transported gas volume
cm/mmcm/km
0.86 0.7
0.51 0.47
0.46
0
0,5
1
2009 2010 2011 2012 2013F
%
20
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Part 3. Export
Alexander Medvedev
Deputy Chairman of Gazprom Management Committee
CEO of Gazprom export
21
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Export - Investor Day 2014
European Natural Gas Market Dynamics
Balance of European Gas Consumption
Source: IEA, Eurostat, Lloyds, GIE, Gazprom Export analysis, Gas calorific value: 1cm = 37 MJ
2012 2013
25.6% 30.0%
121.4 115.4
72.6 81.5
43.8 40.9
0
50
100
150
200
250
2012 2013
Norway Netherlands UK
+8.9
-2.9
-6.0
139.9
162.7
46.5 37.9
31.3 24.8
12.1 7.5
6.7 6.2
14.4 13.6
0
50
100
150
200
250
300
2012 2013
Gazprom Algeria, incl. LNG Qatar, LNGNigeria, LNG Libya, incl. LNG Other import deliveries
+22.9
307.0 311.6 288.4 292.3 288.1
258.2 298.2 267.6 254.5 253.0
565.2 609.8 556.0 546.7 541.0
0
200
400
600
800
2009 2010 2011 2012 2013E
Domestic production Imports (+balance of storage)Consumption
250.9 252.7
-20.9
bcm
Import Deliveries by Sources bcm
Share of Gazprom Deliveries in European Consumption
increased from 25.6% in 2012 to 30% in 2013
bcm Deliveries by Major European Producers
22
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Export - Investor Day 2014
Gazprom Sales to European and CIS Markets
100%
90,4% 90,3 90,2
90,6
88,3 88,5
86,0 86,2
90,8% 91,6%
84
86
88
90
92
94
96
98
100
102
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
%
Actual 2006-12 CERA (2013-01) CERA (2013-07) CERA (2013-11) PIRA (2012-3) PIRA (2013-7) PIRA (2013-10) CEDIGAZ - pessimistic (2013-6)CEDIGAZ - base (2013-6)
Gazprom Gas Deliveries to CIS and Baltics
138.6 150.0 139.9 162.7
9.5 6.6 11.1
11.0
302
383 385 387
250
300
350
400
450
500
0
60
120
180
2010 2011 2012 2013E
Export volumes Other deliveries Average export price
bcm $/mcm
68.0 71.1 64.4
56.1
235
298 308 274
200
250
300
350
400
0
20
40
60
80
2010 2011 2012 2013E
Volumes Average price
* European countries including Turkey except for CIS and Baltics
The Gap is Widening Between European Indigenous Production and Consumption
Under current market conditions
2014-2017 estimate for
gas deliveries to Europe is 155-160 bcma,
depending on weather
Gazprom Gas Deliveries to Europe* $/mcm bcm
148.1 156.6 151.0
173.7
23
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Export - Investor Day 2014
Hybrid Pricing - Cornerstone of the European Market
0
100
200
300
400
500
600MCM/d
0
2
4
6
8
10
12
14
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3
US
D p
er m
mbt
u
BAFA import price, Germany TTF (ENDEX), 1st monthSources: BMWi, Bloomberg
Integration of Contract Prices and Hub prices
Source: IEA
1998-2005
80-100MCM/d seasonal swing
2005-2013
100-220MCM/d seasonal swing
Gazprom is a major provider of supply flexibility to Europe Seasonal swing in Russian gas daily deliveries doubled from 1998 to 2013
• 75% of gas exported to Europe is oil-indexed
• Gas hub prices are not independent from oil-
indexed contract prices. The correlation
coefficient between hub prices and oil prices
moving average equals 0.85
• ACER November 2013 Market Monitoring Report
states that “Oil prices is still the main determinant
of wholesale gas prices in Europe…”(p.180)
Gas Hub and Oil-indexed Prices –
Still Related The correlation coefficient prove dependence
TTF from January 2010 to December 2013 versus: r
Brent 1st month futures 0.69
Brent 1st month futures - 3 months moving average 0.80
Brent 1st month futures - 6 months moving average 0.86
Brent 1st month futures - 9 months moving average 0.85
NBP from January 2010 to December 2013 versus: r
Brent 1st month futures 0.69
Brent 1st month futures - 3 months moving average 0.79
Brent 1st month futures - 6 months moving average 0.84
Brent 1st month futures - 9 months moving average 0.83
24
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Part 4. Finance
Andrey Kruglov Deputy Chairman of Gazprom Management Committee
Head of the Department for Finance and Economics
25
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Finance - Investor Day 2014
Gazprom continues to maintain its strong financial position
among Oil&Gas majors
Comparative Revenue, EBITDA, Net Income CAGR Top-5 Oil&Gas Majors by 2013E Net Profit(2)
USD bln
Source: Companies websites, Factset, Bloomberg as of February 20, 2014
1. Oil & Gas Majors are the top 10 oil and gas companies by market capitalization as of February 20, 2014
2. Based on companies’ data and broker consensus as of February 20, 2014; for Gazprom 9m2013 LTM
USD/boe
10%
8% 8%
12%
6%
4%
0%
2%
4%
6%
8%
10%
12%
14%
Revenue EBITDA Net income
CAGR of Gazprom for 2007-2012
CAGR of oil & gas majors on average for 2007-2012
0
5
10
15
20
25
30
35
40
2 3 4 5
(1)
USD bln
26
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Finance - Investor Day 2014
Revenue diversification: new source of growth
63.3
81.8
87.3 91.0
0
10
20
30
40
50
60
70
80
90
100
2010 2011 2012 9m2013 LTM
Gas transportation Electricity and heat
Crude oil and gas condensate Refined products
Gas sales to Russia
11 12 13 15 15
17 18
8
10
12
14
16
18
20
2010 2011 2012 2013E 2014F 2015F 2016F
Gas Condensate Production(1)
+20%
1. Management estimates; excluding associate companies’ production
Net Sales USD bln
Astrahan
Novy Urengoy
4.7 Yamburg
5.5
3.7 0.3
Tomsk 0.1
Orenburg
Mn tonnes
Gas Condensate Production Sites
Mn tonnes
27
0,051,102
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255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Finance - Investor Day 2014
11% 10%
9%
7%
6%
3%
0%
2%
4%
6%
8%
10%
12%
Gazprom vs Russian Oil & Gas Majors Free Cash Flow Yield, 9m2013 LTM/2014(2)
26.9
43.6 43.1 44.3
7.7
8.3 3.4
10.8
0
10
20
30
40
50
60
2008-2009 2010-2011 2012 9m2013 LTM
Gazprom FCF Generation(1)
Cash Capital Expenditures Free Cash Flow
Sustainable free cash flow generation
USD bln
36.6
51.9
46.5
55.1
1. Period averages. 2013LTM = 9m2013+12m2012-9m2012 2. Five Russian oil and gas majors by capitalization as of 31 January 2014: Rosneft less increase in long term prepayments on oil supply agreements, Novatek, Lukoil, Surgutneftegaz, Tatneft
28
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Finance - Investor Day 2014
Increase of Mineral Extraction Tax (MET) transparency:
transition to gas MET formula
147
237
509
602
693 717
556 590 674
718
0
200
400
600
800
1000
2010 2011 2012 2013 2014F 2015F
MET Rate Calculation*
Natural gas MET, Gazprom (RR/mcm)
Gas condensate MET, Gazprom (RR/1 ton)
RR
* Before 2012 MET rates for gas condensate were set at 17.5% of realization price
Gas MET formula
effective from July 1, 2014
Benefits
• Direct link of tax rates to average realized prices
• Smoothening the effects of gas tariffs growth
deceleration in Russia
• Tax breaks for key greenfields, depleted and
complex fields
• Higher stability of gas taxation
• Transparent rules for gas condensate taxation
700 686
1h2014 2h2014
Key MET tax breaks:
• Greenfields: Yamal and Gydan peninsula,
Irkutsk, Krasnoyarsk regions, Far East
• Depleted fields: depletion ratio over 70%
• Complex fields: Astrakhan region
• Deep layers: over 1,700 m deep
Gas MET = 15% * Price ratio * Complexity ratio + Transportation ratio
Condensate MET = 15% * Price ratio * complexity ratio
29
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Finance - Investor Day 2014
22,1
37,4
43,1 44,3
29,0
34,8
53,0
47,0
127%
118% 108%
124%
0%
20%
40%
60%
80%
100%
120%
140%
0
10
20
30
40
50
60
70
80
2006-2008 2009-2011 2012 9m2013 LTM
GazpromRussian oil majors aggregateGazprom self funding (OpCF/Cash CAPEX)
Capital Expenditures:
Gazprom vs Russian oil majors(1)
8,2
13,0 13,4 13,7
10,4 11,5
16,7
15,5
0
2
4
6
8
10
12
14
16
18
2008-2009 2010-2011 2012 2013E
Gazprom
Russian oil majors
Capex/hydrocarbon production:
Gazprom vs Russian oil majors(1)
USD bln
Source: Companies websites, media sources, Factset, Bloomberg as of February 6, 2014 1. Cash CAPEX; Russian oil & gas majors includes Lukoil, Surgutneftegas, Bashneft, Rosneft, TNK-BP, Tatneft and Transneft
USD/boe
CAPEX efficiency
30
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Finance - Investor Day 2014
0,0
10,0
20,0
30,0
40,0
50,0
2012 2013F 2014F
Gazprom Group CAPEX (1)
Gas Upstream
Gas Midstream
Gas Downstream
Oil
Power Generation
USD bln
42-43 43
1. Source: Management Estimates
Balanced CAPEX
35-42
2014 Priorities
Gas Downstream Gas condensate refining
Gas Midstream Bovanenkovo-Ukhta pipeline GTS Extension – Southern Corridor Long-term financial investments for the construction of the
South Stream pipeline outside Russia The reconstruction of the Petrovsk Pisarevka section of the
Urengoy Novopskov Other reconstruction and technical re-equipment of the GTS
Gas Upstream Bovanenkovo field Brown fields and Nadym-Pur-Taz region Field development projects abroad
Oil Novoportovskoe and Mesoyahinskoe fields
Power generation New capacity investments
31
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Finance - Investor Day 2014
Hard currency(1) denominated revenues
Natural hedging against rouble volatility
Hard currency denominated CAPEX
Hard-currency denominated OPEX
6%
3%
5%
4%
2%
1%
1%
23%
20%
17%
6%
5%
1%
2%
4%
0% 25% 50% 75% 100%
Gas transportation
Gas production
Liquids production
Refining
Electricity
Gas deliveries
Gas storage
Others
Hard currency 22%
Roubles 78%
33%
15%
8%
7%
15%
7%
3%
2%
10%
0% 20% 40% 60% 80% 100%
Gas sales, Europe
Crude exports
Gas sales, ex.USSR
Domestic oil product sales
Gas sales, Russia
Electricity and heat
Transport
Other revenues
Hard currency 66%
Roubles 34%
1. Mainly US Dollars and euro
USD 55%
EUR 30%
Roubles 12%
Others 3%
Debt distribution by currency
1%
1%
2%
1%
1%
8%
7%
22%
10%
14%
2%
5%
6%
3%
15%
2%
0% 25% 50% 75% 100%
Other cash
Staff costs
Goods for resale
Repairs
Materials
Transit of gas and oil products
Taxes other than income
Gas and oil purchased Hard currency 43%
Roubles 57%
32
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Finance - Investor Day 2014
Total and Net Debt(1)
1. Data are converted in USD using exchange rate RR/USD as of the end of the period 30.48 for 2010, 32.2 for 2011, 30.37 for 2012, and 32.35 in 9m2013
2. Excluding promissory notes
6.4%
2.7%
5.8%
1
3
5
7
9
2008 2009 2010 2011 2012 9m2013
Weighted average fixed interest rateWeighted average floating interest rateWeighted average interest rate
Top Russian borrower
Debt Maturity Profile(2)
28.6 32.1 35.2 35.7
14.6 15.7
14.2 17.7
0.6x 0.5x
0.7x 0.6x
-1
-0,5
0
0,5
1
0
20
40
60
80
100
2010 2011 2012 9m2013Total debtCash&Cash equivalents and restricted cashNet Debt/Adj.EBITDA LTM
USD bln
43.2
49.4 47.8
53.4
%
15% 24% 22% 22% 13%
17% 19% 16%
42% 38% 33% 36%
31% 21% 26% 26%
2010 2011 2012 9m2013
Less than 1 year 1-2 years 2-5 years More than 5 years
Cost of Debt Financing(2)
33
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Finance - Investor Day 2014
5.3% 4.8% 4.7% 4.7% 4.7% 4.3%
3.4% 2.6%
0%
2%
4%
6%
8%Dividend Yields of Major Oil & Gas companies, 2013F(2)
Dividend payments’ schedule of OAO Gazprom according to the amendments to the Federal Law on Joint-Stock Companies that are effective from 01.01.2014
3.85
8.97
5.99
6-8
0
3
6
9
12
2010 2011 2012 2013F
Dividend Per Share(1) RR / Share
1. Company operating data estimates
2. Dividend yield is defined as approved dividends for the period divided to the share price as of February 14, 2014; Source: Companies data, FactSet
Dividend payments to
nominees and trustees,
who are registered with
the Register of
Shareholders 10 to 20 days after AGM
June July
AGM (27June 2014)
Approval of Record date
for dividends payout
Dividend payments
to other persons
registered in the
Register of
Shareholders
not later than 10 working days not later than 25 working days
August
Record date
for dividends payout Record date for
AGM (8 March 2014)
May
Dividend payout
34
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Finance - Investor Day 2014
2014 Outlook
Value drivers:
Stellar growth in the European gas market
Improvement of the Russian gas market competitiveness
Outstanding growth of liquids in the production mix
Optimization of costs and financing solutions for upcoming projects
Compliance with best corporate governance standards
Robust financial performance
35
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Part 5. Gazprom neft
Alexei Yankevich Member of the Management Board,
Deputy CEO for Economics and Finance of Gazprom Neft
36
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Gazprom neft - Investor Day 2014
Investor day summary
Record Financial & Operating Results
Large scale deployment of new technologies
First Arctic Offshore Production
Refinery Quality Program Completion
Conversion Program at FEED Stage
Domestic Retail Efficiency Growth
Investments on Track
Dividends at 25% IFRS Payout
First Ever Interim Dividends
Net Debt / EBITDA not to exceed 1.5X
37
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Gazprom neft - Investor Day 2014
Executing Strategic Goals
Increased stake in SeverEnergia to 40.2%
Expanded presence in Iraq (Halabja block acquisition)
Launched production at Prirazlomnoye
Signed a memorandum with Shell on development of liquids-rich
shale
Launched CPF and began deliveries of oil to condensate pipeline
at SeverEnergia
Entered development phase at Yuzhno-Kinyaminskoye field
Launched Yuzhno-Priobskaya gas compressor station
Completed quality program at all refineries
Expanded G-Drive portfolio to include gasoline 98, planning to
expand range of diesel fuels in 2014-2015
Expanded foreign jet fueling network to 125 airports (vs. 88 at
Jan 1, 2013)
Created a JV with Total to produce polymer-modified bitumen
under G-Way Styrelf brand
Acquired Russia's largest polymer modified bitumen plant
Initiated interim dividend program
38
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Gazprom neft - Investor Day 2014
1 200
1 343
61 114
91
1 000
1 050
1 100
1 150
1 200
1 250
1 300
1 350
1 400
YE2012 Groupproduction
Revisions Acquisi-tions(1)
YE2013
57,3 59,7 62,3
100,0
0
20
40
60
80
100
120
2011 2012 2013 2020
Targets on hydrocarbon production, refining, and marketing premium sales expected to be main vehicles for growth
Changes in PRMS (SPE) proved reserves, mmtoe
333% Reserves replacement ratio
Hydrocarbon Production, mmtoe
CAGR
+7%
Refining, mmt Optional
growth outside
Russia
Premium Channel Sales, mmt
1. Acquisitions include increase of share in Sever Energia
40,0
40,5 43,3 42,6
30,0
0
10
20
30
40
50
60
70
80
2011 2012 2013 2020
19,5 22,9 24,0
40,0
0
5
10
15
20
25
30
35
40
45
2011 2012 2013 2020
39
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Gazprom neft - Investor Day 2014
0,70
0,51 0,59
0,00
0,30
0,60
0,90
2011 2012 2013
160 362
176 296 177 917
0
20 000
40 000
60 000
80 000
100 000
120 000
140 000
160 000
180 000
200 000
2011 2012 2013
300 077 323 106
336 752
0
50 000
100 000
150 000
200 000
250 000
300 000
350 000
400 000
2011 2012 2013
1 031 794
1 232 649 1 267 603
0
200 000
400 000
600 000
800 000
1 000 000
1 200 000
1 400 000
2011 2012 2013
Strong record of financial results continued throughout 2013
Revenue, RUB mm Adj. EBITDA(1), RUB mm
Net Income, RUB mm Net Debt / EBITDA
1. EBITDA includes share of EBITDA of associates and joint ventures
Note: In accordance with the transition provisions of IFRS 11 Gazprom Neft has applied the new policy for interests in joint operations occurring on or after 1 January 2012. Gazprom Neft has assessed the nature of its joint
arrangements and determined them to be joint ventures, except for its investments in Tomksneft and Salym Petroleum Development, which were determined to be joint operations. For purposes of this presentation the metrics
Revenue and Net debt/EBITDA for Y2011 were restated to correctly compare data for 2011-2013.
+1%
40
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Gazprom neft - Investor Day 2014
22,8 21,4
14,2
21,6
25,1
18,2
0
5
10
15
20
25
30
Gazprom Neft Lukoil Rosneft*
2013 2012
24,2 23,1
18,8 19,8
23,7
19,6
0
5
10
15
20
25
30
Lukoil Gazprom Neft Rosneft*
2013 2012
17,4
11,7 11,1
19,4
15,3
12,4
0
5
10
15
20
25
Gazprom Neft Lukoil Rosneft
2013 2012
4.2
1.1
0.0
Gazprom Neft Lukoil Rosneft
Operational and financial efficiency backed by industry-leading growth
Adj. EBITDA absolute 2013 Y-o-Y Growth, %
ROACE, % OCF/boe, USD/boe
Source: MD&A of Companies and INFOTEK
*includes TNK-BP
Adj.EBITDA/boe, USD/boe
41
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Gazprom neft - Investor Day 2014
Combination of New Production and Legacy Fields Driving Growth
Orenburg
Traditional and new production centers in Russia
East Siberia:
Chonskiy Project & Kuyumba
Arctic Shelf:
Prirazlomnoye & Dolginsokye
North of YNAO:
SeverEnergia, Messoyakha &
Novoportovskoye
42
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Gazprom neft - Investor Day 2014
Investment Decisions Reached at New Upstream Projects
Peak: 13 MMToe at 2022-2023
Completed first winter oil shipment
C1+C2 reserves: 27 MMtoe
Peak: 2.3 MMToe at 2018
Peak: 12 MMToe at 2029-2030
Drilled 4 horizontal and 1 exploration
well
Peak: 12 MMToe at 2023
Completed first winter oil shipment
Production Profile, MMtoe
0
5
10
15
20
25
30
35
40
2013 2015 2017 2019 2021 2023 2025Kuyumba Novoport Messoyahkha Tsarichanskoye
Novoport Messoyakha Kuyumba Tsarichanskoye
141 140
124
0
20
40
60
80
100
120
140
160
Kuyumba Messoyahkha Novoport
2P reserves (PRMS), MMtoe
43
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Gazprom neft - Investor Day 2014
Upstream Portfolio Expanding
Iraq
2013
February March April May June July August September October November December
Tomsk region
Partnership with Shell (KMPA)
SeverEnergia
Reserves (C1+C2): 1.7 bln toe
Startup: 2012
Peak: 42 MMToe at 2020-2021
Increased stake to 40.2% Acquired
Yuzhno-Pudinskiy Block
Signed a memorandum
confirming the General
Agreement on Partnership in
exploration and development
of liquids-rich shales
Halabja block acquisition
Recoverable reserves: 79 MMToe
Startup: 2016
Peak: 4.5 MMToe at 2024
Reserves (C1+C2): 6 MMToe
Startup: 2016
Peak: 0.3 MMToe at 2019
Area of interest
44
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Gazprom neft - Investor Day 2014
Production Increase Driven by Orenburg, Muravlenkovskoye,
SeverEnergia and Priobskoye
Average daily production Kboe/day
Hydrocarbon production
*Joint operations: proportionally consolidated entities (Tomskneft, SPD). ** Joint Ventures: Equity accounted entities (Slavneft, SeverEnergia)
45
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0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
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Technological Progress Driving Growth
The share of high-tech wells in total drilling in 2012-2013, increased from 4% to 35%
Horizontal wells drilled
Length of horizontal part up to 300m
3 stage hydrofracs
Length of horizontal part up to 800m
5-6 stage hydrofracs
Length of horizontal part up to
1,030m
9-10 stage hydrofracs
2011 2012 2013
2.7х
5.1х 4.8х
Multi-stage well fracking Multilateral wells drilled
46
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
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First Arctic Offshore Production
Key events:
Completed necessary audits ahead of platform launch
Drilled first well with flow rate 1,750 tpd
The government granted export duty for the first oil
2014 plans:
The first oil shipment from Prirazlomnoye is expected in 1Q14
2,7
4,1
5,5
3,6
2,7 2,1
2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
Crude oil production, MMtonnes Recoverable reserves,
MMtonnes
Recoverable reserves (C1+C2): 74 MMTonnes
Startup: 2013
Peak: 5.5 MMTonnes at 2021
Prirazlomnoye Murmansk
Arkhangelsk
Naryan-Mar
Barents Sea
White Sea
Kara Sea
49
25
Crude oil, MMTonnes
С2
С1
47
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Gazprom neft - Investor Day 2014
Refining throughput, MMTonnes
NIS
Slavneft
Moscow
Omsk
Peer comparison – Refining throughput
growth (CAGR) 2013 vs. 2009*
*Source: Company Reports
Gazprom Neft
Rosneft
Lukoil
Bashneft
Surgutneftegaz
18.4 19.0 19.9 20.9 20.2
5.88.9
10.8 10.7 11.16.8
7.2
7.49.6 8.6
2.4
2.92.4
2.1 2.7
33.4
37.940.5
43.3 42.6
2009 2010 2011 2012 2013
+28%
-10%
-2%
+4%
-3%
+7%+7%
+13%
Refining Throughput Levels Remain High Amidst Investment
Program
48
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0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
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Gasoline yield
Diesel yield
Output by products, MMTonnes
Completion of quality program leads to higher value product
mix
49
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0,102,204
153,204,255
153,051,000
255,102,000
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Conversion investments will increase light product yields by about 20% between 2013 and 2020
2013 2014 2015 2016 2017 2018 2019 2020
20
17
3
29
7 2
22
2
15
4
38
12
29
61.3
79.2
36.5
67.1
82.5
36.7
80.6
94.2
37.9
Petroleum product yield structure, %
14
16
3
31
8 1
27
14
16
3
31
8 1
27
2017
Gasoline
Naphtha
Jet fuel
Diesel
Lubricants
Other (Coke, Bitumen,Heating Oil)
Fuel Oil
14
16
3
31
81
27
2017
Gasoline
Naphtha
Jet fuel
Diesel
Lubricants
Other (Coke, Bitumen, Heating Oil)
Fuel Oil
Omsk
Hydrocracking
Coking Unit
Moscow
Hydrocracking
Flexi Coking
YANOS
Hydrocracking
Half of conversion
investment program
expected to come
online between 2013
and 2017
As a result,
conversion rate is
expected to increase
by 15 ppts
Light products will
count for 80% of
total yields by 2020
100 100 100
Light Products Yield, %
Conversion Rate, %
Petroleum Product Output,
mmt
Units to come online
between 2017-2020
50
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2
4
3
Accompanying
goods and services
Loyalty program
Retail metrics
1 Benchmarking
9.1
12.3
14.916.4
2010 2011 2012 2013
21%
Non oil sales,
1,000 RUB/sq.m.
Loyalty program, mln
members 1
x2.4
74% 35%
Retail metrics Benchmarking
(Avg. daily sales/site) 2 3 4
0.8
1.9
3.3
4.2
2010 2011 2012 2013
947 1,043 1,060 1,111
181 202 205 228
10.1 14.2
17.7 19.0
-30.0 -26.0 -22.0 -18.0 -14.0 -10.0 -6.0 -2.0 2.0 6.0 10.0 14.0 18.0
-
200
400
600
800
1,000
1,200
1,400
1,600
2010 2011 2012 2013Russia networkCIS networkAv/ Daily sales per site in Russia
27% 10%
947 1,043 1,060 1,111
181 202 205 228
10.1 14.2
17.7 19.0
-30.0 -26.0 -22.0 -18.0 -14.0 -10.0 -6.0 -2.0 2.0 6.0 10.0 14.0 18.0
-
200
400
600
800
1,000
1,200
1,400
1,600
2010 2011 2012 2013Russia networkCIS networkAv/ Daily sales per site in Russia
Rebranding pushes annual sales growth
51
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Gazprom neft - Investor Day 2014
Investments (RUB mln)
15.6% 32% Y-o-Y growth in brownfield capex due to
increase in use of new technologies in legacy fields
Active development of Novoport field, Orenburg
cluster and offshore projects drove 54% Y-o-Y
increase in greenfield capex
Refining capex decreased 35% Y-o-Y as quality
improvement projects reached completion at all
refineries
8% Y-o-Y increase in marketing capex due to
continued reconstruction of newly acquired retail sites
in Russia and abroad
Investment in new projects* increased 58% as a
result of active development of new projects (mainly
offshore projects and Messoyakha field
M&A includes premium channel network expansion
and increase in shares of subsidiaries
* Projects that are not consolidated under IFRS
Capital Investments support strategic goals
52
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Gazprom neft - Investor Day 2014
5,6
0,8
3,0
0
1
2
3
4
5
6
Gazprom Neft Lukoil Rosneft*
Cash Flow Reconciliation FY2013 RUB million
* Includes TNK-BP
FCF/boe 2013, USD/boe
US $2.1** Billion free cash flow generated in 2013
53
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Gazprom neft - Investor Day 2014
132 534
61 583
98 516
36 869
21 235
91 077
185 922
Debt Fin. assets Net debt
Net debt/EBITDA 0.59x vs. target <1.5x
Increased average debt maturity from 3.81 years in 4Q12 to 5.15 years in 4Q13
Increased average interest rate from 3.48% at December 31, 2012 to 3.68% at December 31, 2013
Diversified debt portfolio: bank loans, bonds, PXF (pre-export finance facility), LPN (loan participation notes)
Debt maturity profile at the end of FY2013
and comparison of profile’s structures 2013 vs. 2012
Debt structure at the end of FY2013, RUB mln
Cash and
cash equivalents
Short-term deposits
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1 year 1 - 2 years 2 - 5 years Over 5 years
Otherborrowings
Bank loans
Bonds
LPN
From 31%
to 15%
13% in-line Y-o-Y
From 31%
to 38%
From 25%
to 34%
Diversified debt portfolio
54
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Gazprom neft - Investor Day 2014
Continued commitment to shareholders via interim dividends
In 2013, the expected amount of annual dividends is 25% of IFRS Net Income
Launched interim dividend program via payment of 6-month interim dividends
Dividends, 2009-2013, RUB bln
0%
1%
2%
3%
4%
5%
6%
7%
2009 2010 2011 2012
Gazprom Neft Lukoil Rosneft
Dividend Yield Benchmarking, %
55
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Gazprom neft - Investor Day 2014
Appendix: 2014 plans for major upstream developments
Chonskiy
Kurdistan
(Iraq)
Kuyumba, Phase 1
Phase 2 and 3
Dolginskoye
Venezuela Partnership with
Shell (KMPA)
Selection Specification Appraisal Exploration Realization Specification Appraisal Exploration Realization
Selection Specification Appraisal Exploration Realization Selection Specification Exploration Realization
Selection Specification Appraisal Exploration Realization
Selection
Appraisal
Selection Specification Exploration Realization Appraisal Specification Appraisal Exploration Realization Selection
Develop a concept for integrated field
infrastructure
Carry out 3D seismic surveying (1100 km2)
and 2D seismic surveying (600 km)
Drill 4 exploration wells
Test production – drill 8 horizontal wells
with horizontal sections from 500 to 900m,
confirm geological hydrodynamic models
“North unit”
Complete 3D seismic field work using UniQ
technology (400km2) and 3D seismic surveying
(200 km2)
Drill 3 exploration wells
Carry out pilot well test - 1 well
“South unit”
Complete 3D seismic surveying (300 km2)
Drill 2 exploration wells
Carry out pilot well test - 1 well
Built a portfolio of license blocks for KMPA
Create a first pass commercial view
Sign the necessary service contracts for
exploratory drilling in 2014 (well 3SD)
Drill well 3SD and test up to 3 productive
zones
Revision of the license obligations
Search for a partner in the project
Preparations for drilling in 2015
Shakal
Complete 3D seismic field work
Drill 2 exploration wells
Garmian
Drill 1 exploration wells
Halabja
Complete interpretation of 2D seismic
surveys
Step-by-step realization of contractual agreement
for supplementary exploration (first stage
completion)
Continue realization of “Early production” project
Pipeline construction as part of “Early production”
Continue construction of roads and bridges
Base engineering of Upgrader and ground-level
infrastructure
56
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Gazprom neft - Investor Day 2014
Appendix: 2014 plans for major upstream developments (cont'd)
Specification Appraisal Exploration Realization
Specification Exploration Realization
Selection Specification Appraisal Exploration Realization
Selection
Orenburg Phase 1-2
Phase 3
Appraisal Exploration
Selection
Specification
Appraisal Exploration Realization Specification
Selection Realization
SeverEnergia
Messoyakha Phase 1
Phase 2
Novoport Phase 1
Phase 2
Prirazlomnoye
Badra 1 (infrustructure)
2 (development)
Appraisal Selection
Selection Specification Appraisal Exploration Realization
Specification Exploration Realization Appraisal Selection
Selection Specification Appraisal Exploration Realization Specification Exploration Realization Appraisal Selection
Appraisal Exploration Specification Selection Realization
Specification Exploration Realization Appraisal Selection
Eastern part of Orenburg field
Tsarichanskoye
Commission high-pressure gas compressor and third
technological line at CPF
Complete well stock metering control project
Commission external transport oil pipeline (2.4
MMTonnes/year) and the first start-up complex of CPF
(1.5 MMTonnes/year)
Begin construction of gas pipeline to Orenburg gas
processing plant, booster compressor station and gas
compressor station
Complete design and survey work for the 3rd
start-up complex
Commission off-shore ice-resistant fixed platform
“Prirazlomnaya”
Commission 3 wells (1 production, 1 injection and
1 absorbing)
Begin oil shipments
Commission field camp and water-supply facilities
Complete setting up a field development plan
Launch:
• Technological line “А” CPF
• In-field pipeline
• Export oil pipeline
• Wells BD4, BD5
Begin construction of Technological line “А” GPF
Commission well Р8
Start commercial production
Start production drilling (5 drilling rigs)
Drill 7 wells and carry out exploration wells test
program (phases 1-2)
Launch CPF (400 MTonnes/year)
Complete oil pipeline construction (oil field to CPF)
Start summer crude shipments (temporary scheme)
Complete phase 1 design and survey work and get
approval from the Directorate-General for State
Environmental Review for the Arctic Terminal and
infrastructure
Carry out preliminary work for construction of gas-
turbine power plant, CPF and pipeline
Complete phase 1 design and survey work of the
key infrastructure
Complete drilling well pads #1,2 and well testing
Drill 2 exploration wells
3D seismic survey,
Phase 2 West (drill and test 1 exploration well), East
(drill well pad #4, 3D seismic – 490 km2, drill 1
exploration well, test 2 objects, model specification)
Drill 62 production wells
Implement test production at oil rims
(Samburgskoye and Yaro-Yakhinskoye fields)
Commission 2 trains of GPF(14 bcm per year total)
at Urengoyskoye field; GPF (7 bcm per year) at
Yaro-Yakhinskoye; 3d train of GPF (2.3 bcm per
year) at Samburgskoye field
Implement program to explore oil part of
achimovsky deposits at Samburgskiy license area
Commission 1st train of CPF at Yaro-Yakhinskoye
57
0,051,102
0,102,204
153,204,255
153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Gazprom neft - Investor Day 2014
Appendix: Gazprom neft balance
Hydrocarbon production abroad
1.25 MMTonnes
49.33 MMTonnes Crude oil production in Russia
4.74 MMTonnes Petroleum products purchase
Russian Federation 1.85 MMTonnes
Crude, MMTonnes
Petroleum products, MMTonnes
Refining abroad
2.75 MMTonnes
45.31MMTonnes
20.6 MMTonnes Export
4.7 MMTonnes Other customers
and state contracts
18.8 MMTonnes Filling stations and tank farms
PRODUCT OUTPUT*** CRUDE OIL SALES**
12.39 MMTonnes Export sales (CIS, NIS a.d, NoviSad, Gazprom Neft Trading Gmbh)0
14.24 MMTonnes
7.10 MMTonnes
Premium business
segments
6.81 MMTonnes
Hydrocarbon purchases
0.4 MMTonnes Condensate
58
Part 6. Gazprom Energoholding
Denis Fedorov Head of Gazprom Directorate for Development of Power and Heat Generation
CEO of Gazprom Energoholding
59 Gazprom Energoholding - Investor Day 2014
Russian power generation
Russia is a Top-6 country
in terms of installed capacity, 2012, GW
Market turnover
2008-2012, $bn
Depreciation in
the generation
sector
Key facts about the market
The largest
generating
companies
in Russia, GW
Private investments in the industry exceed
$40 bn since 2006
The electricity market is completely liberalized Projects within the Capacity Delivery Agreements
(CDA) provide 14% IRR of the players’ investments
Russia is a growing competitive market
37,7
37,5
33,5
25,2
19,5
GEH
RusHydro
Inter RAO
RosAtom
EuroSibEnergo
24 23 30 33 32
16 16 19 23 22
2008 2009 2010 2011 2012
Production Transmission
26%
22%
65%
52%
57%
35%
22%
21%
Thermal
Hydro
Nuclear
< 30 years 31-50 years > 50 years
1 220
1,168*
964
287*
234
223
China
US
EU
Japan
India
Russia №6
Source: companies’ data
Source: GEH analysis
Source: companies’ data
* Data as of 2011. Source: data of power authorities of the countries, EIA
60 Gazprom Energoholding - Investor Day 2014
-7,8%
4,5% 4,4% 3,5%
1,5%
2,9% 3,5% 3,7% 3,9% 3,8%
-9,0%
-6,0%
-3,0%
0,0%
3,0%
6,0%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Electricity consumption in Russia:
Dynamics and drivers
The Russian GDP growth rate
is expected to grow
following the recovery of key industries
Electricity prices in Russia
have potential to grow
Forecast of electricity consumption in
Russia, bn kWh Russia’s GDP growth rates Electricity prices for industrial
customers, EUR/MWh in 2012
Consumption of electricity is
expected to grow at 1% annually
in 2014-2020
GDP growth rates are expected to
recover to 3-4% per year
in 2014-2018
Elimination of cross-subsidization
may become the growth driver
0
30
60
90
120
150
Russia Germany Spain France Poland Italy UK
Source: World Bank, EIA, statistical agencies of the countries Source: EIU forecast 2014
Consumption of electricity in Russia
has been growing at 1.8% annually
in the recent 10 years
1 038 1 049
1 062 1 076
1 091 1 106
1 121 1 134
1 146
1 000
1 050
1 100
1 150
1 200
2012
2013
2014
2015
2016
2017
2018
2019
2020
Sources: fact 2012 – Energy Forecasting Agency,
forecast is evaluated indicatively basing on GDP forecast of MED
61 Gazprom Energoholding - Investor Day 2014
Gazprom Energoholding assets’ profile
1. As of February 25, 2014
Gazprom energoholding owns controlling stakes
in Mosenergo, TGK-1, OGK-2 and MOEK
GEH is the leading thermal generator in Russia
53.5%
51.8%
77.3%
98.9%
As of 2013 Electricity Heat
Installed capacity 37.7 GW 71.3 th. Gcal/h
Production 159.6 bn kWh 124.8 mm Gcal
Electricity Heat
Installed capacity 0.2 GW 17.5 th. Gcal/h
Production 1.0 bn kWh 23.1 mm Gcal
Electricity Heat
Installed capacity 12.3 GW 35,1 th. Gcal/h
Production 58.6 bn kWh 67.6 mm Gcal
MCap $0.96 bn(1)
Free float 15%
Electricity Heat
Installed capacity 7.2 GW 14,2 th. Gcal/h
Production 29.3 bn kWh 27.3 mm Gcal
MCap $0.70 bn(1)
Free float 22.6%
Electricity Heat
Installed capacity 18.0 GW 4.5 th. Gcal/h
Production 70.7 bn kWh 6.8 mm Gcal
MCap 0.77 bn(1)
Free float 22.7%
More than 75% of GEH gas consumption is produced by the
subsidiaries of Gazprom
More than 75% of gas
consumption GEH - gas
produced by companies of
Gazprom
Более 75%
потребления газа ГЭХ
– газ, добываемый
компаниями группы
Газпром
GEH consumes over
75% of natural gas
produced by the
subsidiaries of
Gazprom
62 Gazprom Energoholding - Investor Day 2014
GEH influence area
Operational efficiency
Guaranteed IRR of investments
Availability of debt funds
Strategy and M&A, creation of synergies
Corporate governance and IR
Gas tariff
Heat tariff Climate
1
2
3
4
5
We do not affect
tariffs…
… but we create value
for shareholders
via internal
optimization
Prices for power
Environment
The industry specifics give less space for price and volume maneuver, therefore the company is focused on
efficiency enhancement
The strategic goals of GEH remain the retention of its leading position in the industry, entry into new markets
and social responsibility to its personnel
The management is focused on value creation
63 Gazprom Energoholding - Investor Day 2014
Performance of management on GEH assets optimization
7,8
11,9
15,4 16,5 17,3
2010 2011 2012 2013F 2014F
The company has executed the program of expense reduction:
– Successful operational activities (optimization of load conditions and fuel balance, reduction of worktime for
unprofitable units, effect from new capacities)
– Enhancement of procurement system
– Optimization of organizational structure (personnel down by 795 persons, effect was RR 225 mm)
Gazprom Energoholding completed its acquisition of MOEK :
– MOEK acquisition will allow Mosenergo to eliminate the risk related to the loss of a part of heat loads
(due to the merger of MOEK and MTK)
Commissioning of new effective units results in expense reduction:
– New CHPPs in TEC-21 and TEC-26 commissioned in recent years reduces the fuel consumption
significantly
256 212 217 209
TEC-21 TEC-26
9m2012 9m2013
Fuel rate in electricity production
by new CHPPs, g/kWh
-51%
-13%
-15%
Advisory, legal, auditor services(1)
Transportation expenses (1)
Materials and supplies expenses (1)
EBITDA TGK-1*, RR bn
In 2013 GEH managed to reduce its expenses and strengthen the financial position of its assets
GEH also executed the acquisition of MOEK which is expected to create significant synergies when integrated
with Mosenergo
* IFRS
1. RAS as of December 31, 2013
Cash flow of TGK-1 will grow following the execution of the investment program:
– Completion of CDA projects will allow to increase EBITDA of TGK-1
Program of operational effectiveness improvement:
– The overall effect reached RR 1.4 bn of EBITDA in 2012 and RR 881 mm of EBITDA in 2013
– The key initiatives in 2013 are optimization of procurement and reduction of output by ineffective
capacities
64 Gazprom Energoholding - Investor Day 2014
-25.0%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
-6% -4% -2% 0% 2% 4% 6% 8% 10% 12%
Growth of GEH assets financials
Gazprom Energoholding significantly outperformed the leading European power companies
in terms of growth rates
Revenue CAGR 2009-2013F, IFRS
35.0%
EBITDA CAGR 2009-2013F, IFRS
*
Revenue CAGR in 2009-2013
reached 9%,
EBITDA CAGR– 9%
Source: Bloomberg consensus as of January 27, 2014
* Excluding MOEK
The 2013 results exclude the depreciation tests and potential transactions with the assets of “Khimki Heating Grids”
65 Gazprom Energoholding - Investor Day 2014
Expected effect
on EBITDA
from the costs
optimization activities
Expected effect from the drivers of 2013-2014 EBITDA
Impact from the MOEK acquisition:
Gas savings due to load switching
Optimization of heat management
system
Sale of land
Other*
CDA program finalization
LEAN program
CDA program implementation
Execution of cost reduction program
CDA program finalization
Improvement of corporate management
by means of introducing Fortum
representatives to the Board
+0.5 RR bn
Costs optimization programs implemented by GEH are expected to result in EBITDA increase of over
RR 4 bn in 2013 and over RR 2 bn in 2014
Expected growth
drivers
Some measures/initiatives will also allow the company to increase its value in the future:
+0.8 RR bn
2013 2014 2013 2014 2013 2014
+1.5 RR bn
+1.8 RR bn
+0.8 RR bn
+0.8 RR bn
Management reporting data
* Other effects include the use of equipment from MOEK boilers subject to be closed at other objects and extra income from the rental or sale of office buildings
66 Gazprom Energoholding - Investor Day 2014
Additional growth opportunities for GEH
Projects
in Russia
Projects
abroad
1
2
Service business
GEH acquired a group of power maintenance companies “TeploEnergoRemont” in 2013
GEH holds the blocking stake of power service company “Tekon-Engineering”
Both companies carry out contracting works for GEH generating subsidiaries, as well as for companies
outside the group
3
4
Pancevo project
Construction of a 208 MW CHPP in the town of Pancevo together with NIS
Return on investments is guaranteed by long-term agreements on fuel supplies and sales of heat
and electricity
Potential foreign projects
GEH is permanently monitoring markets which can be potentially interesting for business development.
At the moment the company is evaluating the opportunities in Germany, Serbia and other Balkan
countries, as well as in Japan, China and Vietnam
Power fuel stations
Agreement on power fuel stations was signed with the Government of Moscow
Particularly, GEH reached the preliminary agreements concerning the measures for increasing the
number of electric vehicles and building the required infrastructure in Moscow
Being a part of Gazprom Group, GEH positions itself as an international player
Along with the current work on efficiency improvement, the company continues to seek opportunities for
added value creation both in Russia and abroad
67 Gazprom Energoholding - Investor Day 2014
Appendix:
GEH profile
Gazprom Energoholding is the largest owner of power
generating assets in Russia (controlling stakes in Mosenergo,
TGK-1, OGK-2 and MOEK)
GEH unites 81 power stations with installed capacity of
ca. 37.7 GW (about 17% of the total installed capacity of the
Russian electric power industry), and is one of the Top-10
European power producers
Top-10 European power generating companies by installed capacity,
1H 2013, GW
Installed capacity in Russia
as of 31.12.2012(1)
17%
83%
1. Source for the total installed capacity in Russia (223 GW) – data of the System Operator
2. GdF Suez installed capacity in Europe
GEH fuel balance
as of 30.09.2013
84,5%
14,9% 0,7%
Gas
Coal Fuel oil
General Information
Source: company data
Source: System Operator
139,5
97,8
67,7
52,0
50,7
39,4
37,7
37,4
36,5
33,5
(2)
68 Gazprom Energoholding - Investor Day 2014
Appendix:
Operational and financial results outlook for 2013/2014
kWh bn 2012 2013 2014F Change
Mosenergo 61.3 58.6 62.7 7.0%
TGK-1 27.3 29.3 30.9 5.5%
OGK-2 75.2 70.7 73.9 4.5%
Total 166.9 158.6 167.5 5.6%
166,9 158,6 167,5
+5.6%
Electricity
output
RR bn 2012 2013F 2014F Change
Mosenergo 157.1 156.7 168.0 7.2%
TGK-1 62.5 67.5 73.1 8.3%
OGK-2 104.2 112.0 112.9 0.8%
Total 323.8 336.1 354.0 5.3%
323,8 336,1 354,0
+5.3%
Revenue
(IFRS)
Gcal mm 2012 2013 2014F Change
Mosenergo 68.4 67.6 67.6 0%
TGK-1 24.6 27.3 27.3 +7.9%
OGK-2 6.3 6.8 6.7 -1.5%
Total 101.1 99.7 101.6 1.9%
101,1 99,7 101,6
+1,9% Heat
output
RR bn 2012 2013F 2014F Change
Mosenergo 20.3 24.7 24.6 -0.4%
TGK-1 15.4 16.5 17.3 4.8%
OGK-2 10.6 11.5 11.8 2.6%
Total 46.3 52.7 53.7 1.9%
46,3 52,7 53,7
+1.9% EBITDA
(IFRS)
Source: Companies’ data
Data for Mosenergo and OGK-2 exclude the 2013-2014 depreciation tests. Data for Mosenergo are shown without the potential effects of the transactions with “Khimki Heating Grids” assets
69 Gazprom Energoholding - Investor Day 2014
Appendix:
Investments of GEH companies
guarantee value creation in the future
GEH invests into
CDA projects,
all of which are
profitable
Share of new capacities
in the revenue of the subsidiaries (2013)
Share of new
capacities reached
15.9% in the 2013
revenue, and is still
growing
14,0% 21,2%
15,3%
Mosenergo TGK-1 OGK-2
5,1
2,3
3,8
0,1 0,4
before 2013 2014 2015 2016 2017
Commissioning timeline
according to GEH investment program, GW
499
118
CDA tariffEssential tariff
4.2x
RR ths. per 1 MW/month
Upgraded CDA tariff guarantees return on investments
9,4% 11,1% 15,9%
2011 2012 2013
Share of new capacities
in the revenue of GEH
IRR
13-14%
Basic IRR of investments on
the basis of Capacity Delivery Agreements
In the coming years GEH will continue
to execute the CDA program, and will also
obtain additional income from the
previously commissioned CDA units
In 2014-2017
the company will
continue the CDA
program according
to the accepted
timeline
70 Gazprom Energoholding - Investor Day 2014
Appendix:
MOEK acquisition
Economy due to the switch of loads
from ineffective boiler stations of
MOEK to GEH stations (potential
effect over RR 10 bn)
Up to 3,500 Gcal/h may be switched
to combined cycle generation
In 2013 GEH acquired MOEK – a strategic transaction which is expected to create the following synergy effects:
The measures are expected to
result in the reduction of…
• heat losses by 1 mm Gcal
by the end of 2013
• headcount by 1 thousand
employees
Potential sale of land plots under
the boiler stations to be closed
Obtaining the status of a Unified
Heat Supplying Company in
Moscow and other operational
synergies
Upon acquisition of MOEK, GEH
will control 93% of heat generation
in Moscow
The transaction will also allow
GEH to control 93% of heat
distribution market
Load switch synergies, tons of fuel equivalent
~300
75
~225
Average fuelconsumption by MOEK
boiler stations
Potentialeconomy
Average fuelconsumption of
Mosenergo(co-generation)
70%
23%
7% 18%
75%
7%
Generation Distribution
93% 93%
Mosenergo MOEK Others
Structure of Moscow power market
71 Gazprom Energoholding - Investor Day 2014
Appendix:
Expected effect of tariffs freeze
* Company’s expectations based upon the recent public releases about the potential changes in tariffs and prices
1. Market Council forecast
2. In case the change is 0% starting from 01.01.2014
3. Excluding the Russian Railways tariff
Segments Markets Resolution of the Government
on the tariff change starting from 01.01.2014
2014/2013
average growth rate
Electricity Wholesale market N/A + 6%(1)
Regulated agreements 0% + 6-7%(2)
Capacity
Competitive capacity outtake 0% – 3%
Regulated agreements 0% + 3-4%
CDA no resolution yet same level
Heat Industrial customers + 0-4,2% + 0-4,2%
Households + 4,2% + 4,2%
Fuel Gas 0% + 7%
Coal + 0-1%(3) + 0-1%(3)
The so-called “tariffs freeze” became an important event in power sector regulation in 2013 – The freeze assumes indexation of gas, electricity and capacity tariffs (as well as rail) by 0% in 2014. Further, the Government is planning the
indexation of the above tariffs by rates not higher than the previous year’s inflation
– As only the regulated tariffs, including the gas tariffs, will be frozen, while electricity prices are not fixed on a free market, the effect may not be
negative for the electricity industry
72 Gazprom neft - Investor Day 2014
Section of Investor Relations
Tel: (007) (495) 428-47-83
Alexey KOKOREV
Head of Corporate Finance Department
Phone: (007) (812) 648-3117
E-mail: Kokorev.AS@gazprom-neft.ru
Anna SIDORKINA
Head of Investor Relations
Phone: (007) (812) 385-9548
E-mail: Sidorkina.AV@gazprom-neft.ru
Department of Corporate Finance
Investor Relations
Tel: (007) (812) 385-9548
Contacts for investors
Department for Finance&Economics
Corporate Finance Directorate
Fax: (007) (495) 719-35-41
Oleg NAGOVITSYN
Deputy Head of Corporate Finance Directorate Phone: (007) (495) 719-26-25
E-mail: O.Nagovitsyn@adm.gazprom.ru
Andrey BARANOV
Head of Investor Relations
E-mail: ir@gazprom.ru
Ekaterina PAVLOVA
Head of Investor Relations
Phone: (007) (495) 428-47-83 (ext. 4607)
E-mail: pavlovaea@gazenergocom.ru
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