11

Gazprom’s Financial and

Economic PolicyAndrey KRUGLOV

Deputy Chairman of the Management Committee,

Head of the Finance and Economics Department

129.1 138.1

0

30

60

90

120

150

Janurary-May '09 January-May '10

2

Billion cubic meters

Gas Production

2

Source: Company data

25.617.6

0

20

40

60

80

January-May '09 January-May '10

billion cubic meters

Gas sales in Russia

billion cubic meters

Gas export to Europe

billion cubic meters

Market Environment

Gas Demand Recovery

61.7

49.0

0

20

40

60

80

January-May '09 January-May '10

25

35

45

55

January February March April May June July August September October November December

2009 2010

Gas export to CIS and Baltic states

333

2009 Financial Performance

1 4641 090

2008 2009

3 290 2 999

2008 2009

292343

202 211

334

4Q08 1Q09 2Q09 3Q09 4Q09

37.5103.7

192.6 174.6

308.7

4Q08 1Q09 2Q09 3Q09 4Q09

13% (26%)

(9%)

59%Adjusted EBITDA(2)

(RUB billion)

– An increase in 2009 operating expenses is provoked by higher expenditures for purchased oil and gas, as well as for their transit.

– The growth of these expenditures is caused by an increase in the Central Asian suppliers’ gas purchase prices and in the rates for gas transit across Kazakhstan and Uzbekistan.

– The 2009 decline in the operating profit was offset by non-recurring income and positive financial activity of associated companies.

– As a result the income attributable to the Gazprom shareholders showed a 5% increase in 2009.

Proceeds(1)

(RUB billion)

– Sales fell 9% YoY due to a drop in global gas demand, which resulted in the decreased supply volume and gas price on the key markets in 2009.

– Starting from 2009, the financial result of the trading activity is given separately as net income in the consolidated statement of total income.

723% 5%

Profit (3)

(RUB billion)

77%

743.0 780.0

2008 2009

The exchange rate is applied as of the end of the appropriate period.

1. The proceeds are calculated as a sum of sales proceeds and net trading profit excluding actual deliveries.2. EBITDA is calculated as operating profit plus depreciation and provisions for assets impairment (excluding provisions for accounts receivable and prepayment).3. The profit for the period attributable to the shareholders of Gazprom.

4

Gas Sales Proceeds

Net proceeds from gas sales in and beyond Europe

Net proceeds from gas sales in the former Soviet Union

RUB billion

1 103.01 260.6

0

500

1000

1500

2008 2009

(13%)

RUB billion

309.9356.50

500

1000

1500

2008 2009

(13%)

Proceeds decreased due to a drop in

demand and a significant decline in gas

prices on the European market

Proceeds decreased due to a drop in sales

volume, which was partially offset by an

increase in gas prices within the FSU states

5

Gas Sales in Russia

Net proceeds from gas sales

RUB billion

503.1479.4

0

200

400

600

2008 2009

+ 5%

Proceeds grew due to a rise in the average

regulated gas price, which was partially

evened by the sales drop

0

1 000

2 000

3 000

4 000

5 000

2005 2006 2007 2008 2009 2010E 2011E 2012E 2013E

Industrial consumers Population

+27%

+15%+15%

+15%

+16%+26%

+15%+11%

Annual average gas price for industrial consumers and population (1)

RUB per 1 000 m3

1. Starting from 2009 the gas price growth rates are brought in line with the Scenario Conditions and Forecast for Russia’s Social and Economic Development in 2010–2012 published by the Russian Ministry of Economic Development in June 2010.

2. The actual price was changed by 5% on January 1, 2010; and by 15% on April 1, 2010. It is planned to increase the price by 5% on January 1, 2011 and by 9.5% on April 1, 2011.

+19.2%+15%

+15%+25%+15%+16%

+27%+17%

6

Oil price, USD per barrel

RUB/USD exchange rate

Investment program, RUB billion

Borrowing program, RUB billion

Weighted average price for the gas sold beyond FSU,

USD per 1,000 cubic meters

Net profit, RUB million

61

31.69

803.7

304.9

298.4

624,613 (3)

58

33.90

802.4

90.0

280.0

554,504

2010

Estimated (2)

Gazprom’s Budget (1)

2009

ActualBudget parameters

1. The parent company.2. The plan approved by the resolution of the Gazprom Board of Directors No.1511 dated November 24, 2009.3. With the adjusted amount of financial investment (RUB 301,561 million).

7

Gas Production and Transportation Costs

(Specific Indicators)

Gas production cost Gas transportation cost

RUB per 1,000 cubic meters

516.3528.5535.2459.2

0

150

300

450

600

2008 Actual 2009 Estimated 2009 Actual 2010 Estimated

RUB* per 1,000 cubic meters/100 kilometers

38.738.639.133.6

0

15

30

45

2008 Actual 2009 Estimated 2009 Actual 2010 Estimated

8

BUDGET COST REDUCTION

based on the results of project ranking and cost items

prioritization

including:

operating activity

investment activity

RUB 265.5 billion (1)

RUB 83.5 billion

RUB 182.0 billion

RUB 11.7 billion

1. Compared to the initial draft version of the Budget compiled in conformity with the requests of the Company’s structural subdivisions

8

Cost optimization (reduction) program

The Company is implementing:

Comprehensive Action Plan on the Company’s financial strategy for 2010

Comprehensive Action Plan on the Company’s cost optimization for 2010

Cost Optimization in 2010 (Parent Company)

9

Asset Management and Corporate Relations

Before

revaluation

After

revaluation

RUB 3,293 billion

RUB 3,775 billion

+ RUB 482 billion

Fixed assets revaluation results

(balance sheet value) as of January 1, 2010

Gazprom’s fixed assets revaluation was carried out

as of January 1, 2010:

assets value increased by RUB 482 billion

27 subsidiaries of Gazprom Group simultaneously

carried out revaluation of their fixed assets

2.392.662.54

1.51.19

0.690.4

0.36

0

1

2

3

2002 2003 2004 2005 2006 2007 2008 2009

0

10

20

30

40

50

60

70

Amount of dividends Payouts per share

Payouts per share

RUB billionRUB

The Gazprom Board of Directors proposed RUB 2.39

dividend payout per share

payout grew 664% versus 2008

maximum payout level of 2006-2007 reached

Export financing

Export financing for construction of the Portovaya compressor station – some USD 940 million

Project financing

Phase II financing of Sakhalin II, Gazprom Group cost recovery – up to USD 700 million

Signing documents to raise EUR 3.9 billion in project finance for Phase I of the Nord Stream project

European commercial paper program

Issue I – September 18, 2009 worth USD 600 million with a 3.4% interest rate was repaid on December 18, 2009

Issue II – October 9, 2009 worth USD 600 million with a 3.2% interest rate was repaid on December 18, 2009

10

1.2x

1.5x1.7x

0.9x

1.7x

1.0x

1.3x1.4x

0.7x

1.4x

2007 2008 9M09 2009 2010E

Total debt / Adjusted EBITDA Net debt / Adjusted EBITDA

Relative debt indicators(1)

10

Debt and Liquidity Management

1219 10181469 1372

291348

293254

2007 2008 9M09 2009

Net debt Monetary assets and their equivalents

Total and net debt

1. Calculated as of the end of the respective period.

Financial instruments diversification

RUB billion

11

Shaping Centralized Cash Flow Management System

Centralized cash flow control system

Gazprombank

Current participants:

56 subsidiaries and subdivisions of the

Company

Promising participants:

20 more subsidiaries and subdivisions

of the Company

Capital gain from the temporarily disposable cash assets placed by Gazprom Group on a

short-term basis featured a 40% increase

Liquidity management projects in

foreign subsidiaries

Deutsche Bank AG

Zero Balancing Pool

Companies of Gazprom Germania group

Gazprom E.P. International B.V., Gazprom

Sakhalin Holdings B.V., Gazprom Finance

BNP Paribas

Notional Pool

Benefits:

creating a multi-bank money flow monitoring and management system

improving operational planning in subsidiaries

shaping a common payment position of the Group

increasing capital gains from the Company’s cash assets placement

forming conditions for Gazprom’s short-term concessional lending

Russian notional pool shaping

Gazprom’s Informatization Strategy

• Automated system for development of

management reports on the basis of

key performance indicators (KPI)

CORPORATE DATA STORAGE

Integration platform

Inte

gra

tion

pla

tfo

rm

Corporate

portal

Vertically integrated

Information management systems (IMS)

IMS

MR

MB

IMS

ТG

GC

IMS

HC

RM

AB

MS

IMS

I

AC

RS

AD

CS

UG

SS

AL

MS

AH

RM

S

MR

AC

S

IMS

ME

Typical information management systems of an enterprise

(IMS E) according to the types of activity

Production Gas

transportationUGS Processing Gas

distribution

and sale

Secto

ra

l d

ata

refe

ren

ce

ba

nk

(SD

RB

)

IMS MRMB IMS for replenishment of mineral and raw material base and hydrocarbon production

IMS T IMS for transportation of gas and gas condensate

IMS HCRM IMS for hydrocarbon refining and marketing

ABMS Automated budget management system

IMSI IMS for investments

ACRS Automated consolidated reporting system

ADCS UGSS Automated dispatch control system for UGSS

ALMS Asset and liability management system

AHRMS Automated human resources management system

MRACS Management and repair automated control system

IMS ME IMS for materials and equipment

Gazprom Group

Types of business

Investment projectsSubsidiariesSubsidiaries Investment projects

Investment projects

Business processesTypes of activity

KPI

Corporate Data Bank is Efficient Tool of

Managerial Decision Making

Finance

Production

ManagementInnovation and human resources

Sales markets

• Gazprom Group• Businesses• Activities• Gazprom and subsidiaries• Investment projects• Business processes

14

Conclusion

Carrying on major production projects financing

Ensuring strict cost control

Effective debt management and fund raising

Maintaining a reasonable level of working capital

Continuing a dialogue with the Russian Government on switching to market-based gas pricing principles in Russia

Cooperating with authorities to freeze the tax burden and customs duties

Improving inter-group liquidity management quality

Enhancing transparency and corporate governance

We continue improving the efficiency of our activity