CRISIS: CHALLENGE AND OPPORTUNITY · CRISIS: CHALLENGE AND OPPORTUNITY 4 Natural gas reserves of Russian Federation 48 33 Total resources – 250 tcm Proved reserves Proved reserves

CRISIS: CHALLENGE AND OPPORTUNITY

1

CRISIS:CHALLENGE

AND OPPORTUNITY

DEPUTY HEAD OF STRATEGICDEVELOPMENT DEPARTMENT

S. PANKRATOV


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1 9 7 3 1 9 7 8 1 9 8 3 1 9 8 8 1 9 9 3 1 9 9 8 2 0 0 3 2 0 0 8

Russian Gas Industry Experienced Stable Growth Despite Unstable Environment

Length of High Pressure Pipelines, Length of High Pressure Pipelines, thsths km km

Gas Production, Gas Production, bcmbcm Natural Gas Export to Europe, Natural Gas Export to Europe, bcmbcm

EXPERIENCEEXPERIENCE CONFIDENCECONFIDENCE RELIABILITYRELIABILITY

19731973

Break-up of the Soviet Union

August 1991August 1991

Russian Parliamentary Crisis

19931993

Asian Financial Crisis

20082008

World Financial Crisis

World Oil Crisis

19941994 August 1998August 1998

Russian Financial Crisis

Gas Production WellsGas Production Wells


3

Energy security providing

HUGEHUGEHUGEHUGE

RESOURCERESOURCERESOURCERESOURCE PROFITABILITYPROFITABILITYPROFITABILITYPROFITABILITY

EXISTINGEXISTINGEXISTINGEXISTING

TECHNOLOGY & TECHNOLOGY & TECHNOLOGY & TECHNOLOGY &

ECOSTANDARD ECOSTANDARD ECOSTANDARD ECOSTANDARD


4

Natural gas reserves of Russian Federation

48 33

Total resources – 250 tcm

Proved reserves

Proved reserves – 48 tcm

GAZPROM’sproved reserves

26%26%

SHARE RUSSIAN PROVEDRESERVES IN WORLD

RESERVESREPLACEMENTRATIO

NEXT 10 YEARS>1


5

710

414

0

150

300

450

600

750

mto

e

Russian primary energy consumption

Energy effective in Russia: burried reserve

39

29

17161511

28

45 42

54

Transport

Heating

Gas Flaring

Fuel production

State institutions

Agriculture

Services, construction

Apartment houses

Power industry

Industry

Totalenergy saving

potential296 mtoe

240 BCM/Y GAS SAVING

42%


6

Russian Unified Gas Supply System (UGSS)

Gas fields in exploration andproduction - 122Total length of gaspipelines, km - 159 500Compressor stations (CS) - 219Total compressorcapacity, MMkW - 42Underground storage facilities - 25Average distanceof gastransportation throughRussia, km - 2900


7

Fundamentals for Long-term Planning

SCENARIOS FOR PERSPECTIVE

DEVELOPMENT

GAS DEMANDSCENARIOS

CONSERVATIVE PRICE

FORECAST

ReliabilityReliability PerformabilityPerformability Sustainable Sustainable developmentdevelopment

Achievement of Achievement of Strategic GoalsStrategic Goals

STRATEGICSTRATEGIC

PROGRAM PROGRAM

FOR GASFOR GASBUSINESSBUSINESS

DEVELOPMENTDEVELOPMENT


8

$ 45

$ 80

$ 60

$ 35

0

20

40

60

80

100

120

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030

Bre

nt (

$ U

SA

)Conservative Price Forecast

Source: CERA, Gazprom’s data

Optimistic forecast zone

$ 45.5 (average value of real oil prices)

Forecast zone for long-term planning

Nominal oil prices

Real oil prices


9

Global Energy Demand

GLOBAL GAS DEMAND WILL CONTINUE TO GROWGLOBAL GAS DEMAND WILL CONTINUE TO GROW

2008 2030

Energy efficiency and savings

Population growth and rising standards of living

- energy demand;

- changes in energy demand;

- mid-term factors;

- long-term factors.

200620,5 %

Oil Gas Coal Hydro Nuclear Other

203022- 25 %

Advantages of gasLarge reservesDeveloped infrastructureEcologically clean type of fuel


10

-2000

-1500

-1000

-500

0

500

1000

1500

2000

2008 2030

Mto

e

Production Import Consumption Export

53,2 %

46,8 %

95,6 %

38,7 %

61,3 %

96,6 %

3,4 %

4,4 %

0

100

200

300

400

500

600

700

800

2008 2030

Mto

e

Oil, oil products, coal and others Gas

57 % 68 %

32 % 43 %

20082030

* To 2005 year level

85*% 43% DOUBLE DOUBLE DECREASEDECREASE

New Russian Energy Strategy 2030

19%

14% 22%

45%53%

18%19%10%

Total Final ConsumptionTotal Final Consumption

GDP Energy Intensity GDP Energy Intensity Primary Energy ResourcesPrimary Energy Resources

20302008

OilOthers

GASGAS::VOLUME INCREASE,VOLUME INCREASE,SHARE DECREASESHARE DECREASE

GasGas

OilCoal

OthersCoal

Energy Resources ExportEnergy Resources Export


11

Scenarios for Gas Demand

Russia

North-East Asia

Europe, FSU and Baltic Countries

USA

BASIC BASIC SCENARIO SCENARIO FOR GAS FOR GAS DEMANDDEMAND

LONGTERM LONGTERM CONTRACTSCONTRACTS

COMPETITIONCOMPETITION

0

200

400

600

2008 2010 2015 2020

0

200

400

600

2008 2010 2015 2020

300

400

500

600

700

800

900

1000

2008 2010 2015 2020

0

200

400

600

800

1000

2008 2010 2015 2020


12

2009 2025

Changes in Projects Schedule

- Before Financial Crisis 2008- After

Production fromProduction fromYAMAL MEGAPROJECT YAMAL MEGAPROJECT


13

Major Projects Development

- Main production regions- Current directions of supply- Perspective directions of supply- LNG Directions


14

Capital Expenditures Programs*

0%

20%

40%

60%

80%

100%

2009-2012 2013-2016 2017-2020

New projects

Reconstruction

0%

20%

40%

60%

80%

100%

2009-2012 2013-2016 2017-2020

Capital Expenditures (annual average)Capital Expenditures (annual average)* within Unified GasSupply System

ProductionProduction TransportationTransportation

0

250

500

750

1 000

2009-2012 2013-2016 2017-2020

bln

RR

p.a

. Exploration Production TransportationProcessing Others


15

Strategy Overview

DIV

ER

SIF

ICA

TIO

NS

DEVELOPMENT

OILOILOILOILPRODUCTIONPRODUCTIONPRODUCTIONPRODUCTIONINCREASEINCREASEINCREASEINCREASE

GAS PRODUCTION

GAS PRODUCTION

GAS PRODUCTION

GAS PRODUCTIONINCREASEINCREASEINCREASEINCREASE

NEW EXPORTNEW EXPORTNEW EXPORTNEW EXPORTROUTES TOROUTES TOROUTES TOROUTES TOEXISTINGEXISTINGEXISTINGEXISTINGMARKETSMARKETSMARKETSMARKETS

(LNG, PIPELINE)(LNG, PIPELINE)(LNG, PIPELINE)(LNG, PIPELINE)

ELECTRICITYELECTRICITYELECTRICITYELECTRICITYGENERATIONGENERATIONGENERATIONGENERATION

NEW MARKETSNEW MARKETSNEW MARKETSNEW MARKETSIN ASIA ANDIN ASIA ANDIN ASIA ANDIN ASIA ANDN. AMERICAN. AMERICAN. AMERICAN. AMERICA(LNG, PIPELINE)(LNG, PIPELINE)(LNG, PIPELINE)(LNG, PIPELINE)SPOT TRADING SPOT TRADING SPOT TRADING SPOT TRADING

UNIFIED GAS SUPPLY

UNIFIED GAS SUPPLY

UNIFIED GAS SUPPLY

UNIFIED GAS SUPPLY

SYSTEM EXPANSION

SYSTEM EXPANSION

SYSTEM EXPANSION

SYSTEM EXPANSION

HIGHHIGHHIGHHIGH----LEVEL PROCESSING

LEVEL PROCESSING

LEVEL PROCESSING

LEVEL PROCESSING

AND PETROCHEMICALS

AND PETROCHEMICALS

AND PETROCHEMICALS

AND PETROCHEMICALS

DOMESTIC GAS

DOMESTIC GAS

DOMESTIC GAS

DOMESTIC GASMARKET DEVELOPMENT

MARKET DEVELOPMENT

MARKET DEVELOPMENT

MARKET DEVELOPMENTACCESS TO END

ACCESS TO END

ACCESS TO END

ACCESS TO ENDCONSUMERS IN EUROPE

CONSUMERS IN EUROPE

CONSUMERS IN EUROPE

CONSUMERS IN EUROPE

EXPLORATION

EXPLORATION

EXPLORATION

EXPLORATION

EXPLORATION

EXPLORATION

EXPLORATION

EXPLORATION

&&&&&&&&

PRODUCTION

PRODUCTION

PRODUCTION

PRODUCTION

PRODUCTION

PRODUCTION

PRODUCTION

PRODUCTION

TRANS

TRANS

TRANS

TRANS

TRANS

TRANS

TRANS

TRANS--------

PORTATION

PORTATION

PORTATION

PORTATION

PORTATION

PORTATION

PORTATION

PORTATION

PROCESSING

PROCESSING

PROCESSING

PROCESSING

PROCESSING

PROCESSING

PROCESSING

PROCESSING

&&&&&&&&

UTILIZATION

UTILIZATION

UTILIZATION

UTILIZATION

UTILIZATION

UTILIZATION

UTILIZATION

UTILIZATION

MARKETING

MARKETING

MARKETING

MARKETING

MARKETING

MARKETING

MARKETING

MARKETING

&&&&&&&&

SALES

SALES

SALES

SALES

SALES

SALES

SALES

SALES


16

GAZPROM provides energy security of Europe by

Huge recourses Branched transporting infrastructureAdequate investmentsDiversified activity and product marketsPartnering


17

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.


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THANK YOU FOR YOUR ATTENTION!

CRISIS: CHALLENGE AND OPPORTUNITY · CRISIS: CHALLENGE AND OPPORTUNITY 4 Natural gas reserves of Russian Federation 48 33 Total resources – 250 tcm Proved reserves Proved reserves

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