CRISIS: CHALLENGE AND OPPORTUNITY
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CRISIS:CHALLENGE
AND OPPORTUNITY
DEPUTY HEAD OF STRATEGICDEVELOPMENT DEPARTMENT
S. PANKRATOV
CRISIS: CHALLENGE AND OPPORTUNITY
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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
CRISIS: CHALLENGE AND OPPORTUNITY
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Energy security providing
HUGEHUGEHUGEHUGE
RESOURCERESOURCERESOURCERESOURCE PROFITABILITYPROFITABILITYPROFITABILITYPROFITABILITY
EXISTINGEXISTINGEXISTINGEXISTING
TECHNOLOGY & TECHNOLOGY & TECHNOLOGY & TECHNOLOGY &
ECOSTANDARD ECOSTANDARD ECOSTANDARD ECOSTANDARD
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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
CRISIS: CHALLENGE AND OPPORTUNITY
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%
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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
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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
CRISIS: CHALLENGE AND OPPORTUNITY
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$ 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
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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
CRISIS: CHALLENGE AND OPPORTUNITY
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-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
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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
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2009 2025
Changes in Projects Schedule
- Before Financial Crisis 2008- After
Production fromProduction fromYAMAL MEGAPROJECT YAMAL MEGAPROJECT
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Major Projects Development
- Main production regions- Current directions of supply- Perspective directions of supply- LNG Directions
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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
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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
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GAZPROM provides energy security of Europe by
Huge recourses Branched transporting infrastructureAdequate investmentsDiversified activity and product marketsPartnering
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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.
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THANK YOU FOR YOUR ATTENTION!