2010 02 04 id gazprom website · 2010-02-11 · 2008 2010 2015 2020 bcm 0 200 400 600 2008 2010...

1

Gaining MomentumGazprom Investor Day

February 2010

Moscow, London, New York

2

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.

3

Today’s Speakers

Growth Strategy

Solid Financial Position

Vlada RusakovaMember of Gazprom Management CommitteeHead of Strategic Development Department

Andrey KruglovDeputy Chairman of Gazprom Management Committee

Head of the Department for Finance and Economics

Gazprom Neft: Oil Business Development

Gazprom Energoholding: Power Generation Business Development

Vadim YakovlevDeputy Chairman of the Management Board and CFO of Gazprom Neft

Denis FedorovHead of Gazprom Directorate for Development of Power Generation Sector and

Power Generation Marketing, General Director of Gazprom Energoholding

Strong and Growing Customer BaseAlexander Medvedev

Deputy Chairman of Gazprom Management CommitteeDirector General of Gazprom Export

4

Vlada Rusakova

Member of Gazprom Management Committee

Head of Strategic Development Department

Part 1. Growth Strategy

5

-2 000

-1 000

0

1 000

2 000

2008 2030

Production Import Consumption Export

53.2%

46.8%

95.6%

38.7%

61.3%

96.6%

3,4%

4,4%

0

200

400

600

800

2008 2030

Oil, oil products, coal and other Gas

57%68%

32% 43%

2008 2030

85% 43% 50% 50%

DECREASEDECREASE

19%

14% 22%

45%53%

18% 19%10%

Total Final ConsumptionTotal Final Consumption

GDP Energy IntensityGDP Energy Intensity(1)(1)Primary Energy ResourcesPrimary Energy Resources

20302008

OilOther

GASGAS::

INCREASE IN VOLUME, INCREASE IN VOLUME,

SHARE REDUCTIONSHARE REDUCTION

GasGas

Oil

CoalOther

Coal

Energy Resources ExportEnergy Resources Export

Source: Energy Strategy of Russia 2030 1. Compared to 2005 levels

New Energy Strategy of Russia 2030

Mtoe Mtoe

Growth Strategy

6

Pro

du

ctio

n g

row

th

664 bcm in 2008

885-940 bcm in 2030

33-42 %

Indicators for Russian Gas Industry Development by 2030

23%

3%0%

50%

100%

2008 2030

Share of new pipelines

39%

2%0%

50%

100%

2008 2030

Share of new regions

ProductionProduction ExportExportTransportationTransportation

17%27%

0%

50%

100%

2008 2030

Share of independent producers

4%

26%

0%

50%

100%

2008 2030

Share of reconstructed length

15%

0%

50%

100%

2008 2030

Share of LNG

20%

0%

50%

100%

2008 2030

Share of Asia

Source: Energy Strategy of Russia 2030

Growth Strategy

7

Key highlights:

� Identification of main drivers of gas industry development (production, transportation, refining volumes; investment forecast for reconstruction and new facilities)

� Identification of key factors that will ensure effective development of the gas industry

� Risk assessment and mitigation through administrative decisions

� Recommendations to the State on how best to support the development of the gas industry

General plan specifies the most effective way for gas industry development

General Plan of Russian Gas Industry Development 2030

Growth Strategy

8

0

200

400

600

800

1 000

2008 2010 2015 2020

bcm

0

200

400

600

2008 2010 2015 2020

bcm

RussiaRussia

Europe and FSU CountriesEurope and FSU CountriesUSA USA

Source: Gazprom, CERA, IEA, Cedigaz, EC, IEEJ, MOCIE, EIA

Alternative Forecast

0

200

400

600

800

1 000

2008 2010 2015 2020

bcm

0

200

400

600

2008 2010 2015 2020

bcm

Gas Demand Outlook

Growth Strategy

NorthNorth--East AsiaEast Asia

9

0

200

400

600

2008 2009E 2030E

bcm

Gazprom Independent Gas Producers

0

200

400

2008 2009E 2030E

bcm

Ukraine Other FSU Baltic States

0

200

400

600

2008 2009E 2030E

bcm

Possible growth of supply due to gas demand increase

LNG

New contracts/ volumes to Asia Pacific Region, incl. pipeline gas

Contracted volumes to Europe

Gazprom’s Supply Volumes to Target Markets

FSU countriesFSU countries(1)(1)Europe and other countriesEurope and other countries(1)(1)

160140

85

55

RussiaRussia

402411

320 - 345

90 - 100

500 - 560

1. Net export

Growth Strategy

10

0

100

200

300

400

500

600

700

2008 2009E … 2030E

- Gydan peninsula

- Arctic Shelf

- New fields in Nadym-Pur-Taz

bcm bcm

350

400

450

500

550

600

650

700

2008 2009E 2010E 2015E 2020E 2030E

- Eastern Siberia and Far East

- Yamal peninsula fields

- Currently existing projects

- Production Alternatives

Gazprom mobilises reserves and develops its production and transportation system in response to market demand without creating excess capacity

Gas Production Scenarios

Growth Strategy

11

Major Projects Development

Growth Strategy

12

Volumes of Volumes of GGas Processing Productsas Processing Products(1)(1)

76%

46% 59% 63%24%

54% 41% 37%

0

250

500

750

1 000

2008 2016-2020 2021-2025 2026-2030

Methane gas Gas with high content of ethane, propane, butane

Significant Change in GasSignificant Change in Gas ComponentsComponents

0

10

20

30

40

50

60

2008 2010E 2015E 2020E 2025E 2030E

Expansion of Gas Chemicals Production

bcm

mln ton

1. Excluding Salavatnefteorgsintez

Growth Strategy

13

Planned Capital Expenditure

Planned CAPEX (annual average)Planned CAPEX (annual average)

0

200

400

600

800

2010-2016 2017-2023 2024-2030

Exploration Production Transportation Processing Others

Planned CAPEX (2010Planned CAPEX (2010--2030 in total)2030 in total)

10%

30%

7%11%

16%

5%

21%

Shtokman

Yamal

Eastern Siberia and Far East

Development of Transportation System

Reconstruction in Transportation

Reconstruction in Production

Others

bln RR p.a.

Growth Strategy

14

МостовойжелезнодорожнойМостовойжелезнодорожной

Efficiency of Innovations Exceeds the Efficiency of Any Other Project

Карское море

Обскаягуба

Ямало-Ненецкийавтономный округ

п-ов Ямал

Республика

Коми

Печора

Обь

ст.Бованенково

ст.Сохонто

ст.Паюта

ст.Обская

ст.Ухта

Бованенковское

КС 1 Байдарацкая

КС 2 Ярынская

КС 3 Гагарацкая

КС 4 Воркутинская

КС 5 Усинская

КС 6 Интинская

КС 8 Чикшинская

КС 9 Малоперанская

разъезд

Хралов

КС 7 Сынинская




п-ов Ямал


Коми

Печора

Обь


ст.Сохонто

ст.Паюта

ст.Обская

ст.Ухта










разъезд

Хралов





п-ов Ямал


Коми

Печора

Обь


ст.Сохонто

ст.Паюта

ст.Обская

ст.Ухта










разъезд

Хралов





п-ов Ямал


Коми

Печора

Обь


ст.Сохонто

ст.Паюта

ст.Обская

ст.Ухта










разъезд

Хралов





п-ов Ямал


Коми

Печора

Обь


ст.Сохонто

ст.Паюта

ст.Обская

ст.Ухта










разъезд

Хралов





п-ов Ямал


Коми

Печора

Обь


ст.Сохонто

ст.Паюта

ст.Обская

ст.Ухта










разъезд

Хралов


Trunk Gas Pipeline Network Bovanenkovo-Ukhta

Unique combination of technical specifications:

– 115 Bnm3/ year production capacity

– 11.8 MPa (120 atm.) transportation pressure

– 1100 km length (2 routes), 1420 mm diameter

Baydaratskaya Bay subsea pipeline - 71 km

Cost to Gazprom of developing innovative solutions for the project

– RUR 1.3 bln

Rate of Return – 1526% a year

Creating Transportation Infrastructure on the Yamal peninsula

Obskaya - Bovanenkovo railway bridge crossing the Yuribei river

The world's longest bridge built north of the Arctic Circle

Cost effectiveness as a result of bridge construction – RUR 1.1 bln

Field Development and Infrastructure Construction

Использование парожидкостных

3,0

2,5

2,0

1,5

1,0

0,5

0,0

-0,5

-1,0

-2,5

-1,5

-2,0

-3,5

-4,0

-3,0

-4,5

-5,5

-6,0

-5,0

СистемаИспользованиетрубамимногозабойныхУменьшение

Использование парожидкостных

3,0

2,5

2,0

1,5

1,0

0,5

0,0

-0,5

-1,0

-2,5

-1,5

-2,0

-3,5

-4,0

-3,0

-4,5

-5,5

-6,0

-5,0

СистемаИспользованиетрубамимногозабойныхУменьшение

High-strength and cold-resistant pipes with high steel viscoplasticity. No risk of extended damage to the gas pipeline. There is no world practice of using K 65 strength (Х80) grade pipes for gas pipelines with such characteristics. Concrete-encased pipes with external reinforced-plastic insulation for Baydaratskaya Bay

Multi-zone structure development system. Use of wells with insulated pipes. Use of horizontal and multi-hole wells

Decreasing the spacing beween adjacent production wells from 40 m to12 m to cut infrastructure construction costs

High-Strength 1420 mm 11.8 MPa (120 Atm.) Rated Pipes

Снижениедо 50Двух

Снижениедо 50Двух

Decrease in steel intensity of the foundations by up to 50-60% and costs by 50%. Two to three-fold reduction of construction duration

Ability to control thermal conditions of permafrost soil bases

Use of Permafrost Soil Vapour-Liquid Thermal Stabilisation Systems

New Technologies for Welding High-Strength Thick-Walled Pipes with Strength Grades up to К85 (Х80)

Strength and cold-resistance of welds exceeds parameters of international peers. International standards are at the foundation of the technology. The expected cost effectiveness as a result of construction of one pipeline MG Bovanenkovo–Ukhta exceeds RUR 500 MM

Новые технологии сварки высокопрочных

Трубыс высокимОтсутствиегазопроводакласса

Новые технологии сварки высокопрочных

Трубыс высокимОтсутствиегазопроводакласса

Innovation Megaproject «Yamal»

Growth Strategy

15

Gazprom – A Company Focused on Innovation

R&D Expenditure/ Revenue, 2008R&D Expenditure, 2008

0.0 0.1 0.2 0.3 0.42004006008001,0001,2001,400

Royal Dutch Shell

Total

Exxon Mobil

ENI

Gazprom

GDF Suez

Lukoil

E.ON Rurhgas

Surgutneftegas

Tatneft

Norilsk nikel

Rosneft

Gazprom is a leader in R&D in Russia.

Source: Gazprom, Companies annual reports

$MM

Growth Strategy

16

Development of Gazprom’s Innovation Potential

Growth of Innovation Potential – Increased Competitive Advantage – Foundation for Economic Stability in the Future

Innovative Technological Development GAZPROM Ongoing exploration R&D activities �

Creation of corporate research institutes and venture funds �

Engagement of specialty research teams �

Diversification toward high-tech �

fast-growing market segmentsOngoing active patent and licensing work �

Innovative Technological Development GAZPROM Ongoing exploration R&D activities �

Creation of corporate research institutes and venture funds �

Engagement of specialty research teams �

Diversification toward high-tech �

fast-growing market segmentsOngoing active patent and licensing work �

Only several large Russian companies, one of which is Gazprom, have reached the level of innovative technological development

Innovation Maturity Levels

National report "Innovative development as the basis for accelerated growth of the economy of the Russian Federation", Moscow: The Association of Managers, 2006

Modernisation

Equipment upgrades, creation of new pre-assembled production lines and technologies, creation of research units, ongoing search for new unoccupied market niches, deployment of automated engineering systems

Modernisation

Equipment upgrades, creation of new pre-assembled production lines and technologies, creation of research units, ongoing search for new unoccupied market niches, deployment of automated engineering systems

Market Innovations

Development of marketing and distribution networks, establishing logistics chains and marketing policies, ongoing process of upgrading and extending the product mix

Market Innovations

Development of marketing and distribution networks, establishing logistics chains and marketing policies, ongoing process of upgrading and extending the product mix

Organisational and Management Innovations

Structuring of relationships between divisions, introduction of planning and budgeting, management of human resources, computerisation of management information processes, deployment of ERP systems

Organisational and Management Innovations

Structuring of relationships between divisions, introduction of planning and budgeting, management of human resources, computerisation of management information processes, deployment of ERP systems

Economic sustainability and active government support for innovations are key to accelerating the process

Growth Strategy

17

Russian Gas Industry Experienced Stable Growth Despite Volatile Environment

Length of High Pressure Pipelines, ths km Length of High Pressure Pipelines, ths km

EXPERIENCEEXPERIENCE CONFIDENCECONFIDENCE RELIABILITYRELIABILITY

1973

Break-up of the Soviet Union

August 1991

Russian Parliamentary Crisis

1993

Asian Financial Crisis

2008

World Financial CrisisWorld Oil Crisis

1994 August 1998

Russian Financial Crisis

Gas Production WellsGas Production Wells

Gas Production, bcm Gas Production, bcm GazpromGazprom’’s Gas Export to Europe, bcm s Gas Export to Europe, bcm

Sou

rce:

Com

pany

dat

a

Growth Strategy

020406080

100120140160180

1973 1978 1983 1988 1993 1998 2003 2008 2009E

0

100

200

300

400

500

600

700

1973 1978 1983 1988 1993 1998 2003 2008 2009E

0100020003000400050006000700080009000

1973 1978 1983 1988 1993 1998 2003 2008 2009E

020406080

100120140160180

1973 1978 1983 1988 1993 1998 2003 2008 2009E

18

WELL-DEFINED LONG-TERM STRATEGY CLIENT BASE

GAZPROM’S RESERVESTHE LARGEST GAS SUPPLYSYSTEM IN THE WORLD

Gas Business: Main Factors of Success

STRATEGIC STRATEGIC

PROGRAM PROGRAM

FOR GAS BUSINESS FOR GAS BUSINESS DEVELOPMENTDEVELOPMENT

GLOBAL RUSSIA

18% 69%

165,8 20,4

14,7 47,7

Accumulated production A+B+C1 C2 C3+D

TOTAL RUSSIAN RESOURCES - 248.6 tcm

33.1 tcm

LONG-TERM CONTRACTS

Σ ≥ 3 tcm

LONGLONG--TERM TERM CONTRACTSCONTRACTS

ΣΣ ≥≥ 3 tcm3 tcm

SUSTAINABLE DEVELOPMENT

Growth Strategy

19

Alexander Medvedev

Part 2. Strong and Growing Customer Base

Deputy Chairman of Gazprom Management Committee

Director General of Gazprom Export

20

European Market: Current and Future Prospects for Gazprom’s Business

Gazprom Group Sales to Europebcm

Expected Gazprom’s Share of the European Market

2010

$/mcm – Decline of local gas production and strong demand for natural gas as the cleanest fossil fuel will create ideal conditions for increasing Gazprom’s share in the European market. We estimate company’s share to increase to 32% by 2020

– Minimum Annual Quantities of gas in Gazprom’s portfolio of long term contracts ensure deliveries of 3.1 trillion cm of gas to Europe in 2010-2035. At current contractual prices it guarantees revenues of around $1,000 bln

28%

72%

2015

70%

30%

Gazprom Other Suppliers

2020

32%

68%

Source: International Energy Agency, Eurostat, National Statistics Bodies, Gazprom estimates.

161140

160153156154

190175169162156

184

192262 269

407296 326

0

50

100

150

200

2005 2006 2007 2008 2009E 2010E

0

150

300

450

600

Gazprom Export Volumes Gazprom Trading Volumes

Average European Price

Strong and Growing Customer Base

21

European Gas Demand Forecast

0

200

400

Jan'0

9Fe

b'09

Mar

'09Apr

'09M

ay'09

Jun'0

9Ju

l'09

Aug'09

Sep'09

Oct'09

Nov'09

Dec'09

Jan'1

0

NBP (Fact and Futures) BAFA (Fact and PIRA Forecast)

European Gas Consumption, Production and Imports in 2008 and 2009 (1),(2)

Spot and Long - Term Contract Prices Deviation

$/mcm

117 $/mcm200 $/mcm

100%

90

100

110

2007 2008 2009E 2010E 2011E 2012E 2013E 2014E 2015E

CERA PIRA Wood Mackenzie McKinsey

Medium Term Gas Demand Forecasts (2008 = 100%)

2008 2009EChange,

bcmChange,

%

Consumption (bcm) 600.7 560.0 -40.7 -6.8%

Local Production (bcm) 320.0 302.3 -17.8 -5.6%

Imports (bcm) 280.7 257.8 -22.9 -8.2%

Source: International Energy Agency estimates nominated in TJ, Eurostat, National Statistics Bodies, Gazprom estimates.

601

669713

550

650

750

850Con

s.AVERAGE

IEA

EU Com

mission

CERA

EIA D

OE US

IGA

Eurog

asCed

igaz

Woo

d Mac

kenz

ieAVERAGE

IEA

CERA

EIA D

OE US

IGA

Eurog

as

2008 2020 2030

1. European Non-FSU countries.2. Using conversion factor of 37MJ/cm.

Long-Term Consensus Forecast for European Gas Demand


22

FSU Market and Central Asian Gas

39.635.0

66.264.2

20.3

58.0

0

20

40

60

80

2005 2006 2007 2008 2009E 2010E

6653

979777

101273

111

208159

61 89

0

30

60

90

120

150

2005 2006 2007 2008 2009E 2010E

0

60

120

180

240

300

Volume Average FSU Price

Gazprom Group FSU Sales Prices and Volumes (1)

bcm US$/mcm

Central Asian Gas Purchases

bcm – December 2009 – agreement with AK Uztransgaz and Lukoil Overseas Supply and Trading Ltd. on deliveries in 2010 up to 17.2 bcm of gas from Uzbekistan

– December 2009 – amendment to long-term contract with State Concern Turkmengas to resume in January 2010 purchases of Turkmen gas of up to 30 bcm annually in 2010-2012

– October 2009 –agreement with Azerbaijan for purchasing annually 0.5 bcm of gas in 2010-2015

– May 2007 – 15 year contract for purchasing gas from Kazakhstan. Expected volume in 2010 – 12.6 bcm

Major Cooperation Projects in Central Asia

– Divergence between European and FSU export prices is expected decrease from 30% in 2009 to 16% in 2010

– In 2011 European and FSU export prices will reach parity for Custom Union non-members. Custom Union members are not subject to export duty

Narrowing the Gap between European and FSU Export Prices

1. Source: Factual data – company Annual report, Forecasts – management estimates.


23

Diversifying Transit Risks and Ensuring Reliable Supply

NORWAYSWEDEN

DENMARK

GERMANY POLAND

LITHUANIA

LATVIA

RUSSIA

ESTONIA

FINLANDBaltic

Sea

North

Sea

Nord

Stream

Nord Stream

Nord Stream: Offshore Part

South Stream

ITALY

TURKEYGREECE

ROMANIA

UKRAINEHUNGARY

SLOVAKIA

AUSTRIA

CROATIA

SERBIA

BULGARIAMACEDONIA

MOLDOVA

South

Stream

ParticipantsGazprom (51%), BASF (20%), E.ON (20%), Gasunie (9%)

Length 1,223 km

Capacity55 bcm

(Phase I - 27.5 bcm + Phase II - 27.5 bcm)

Operational Start2011 - Phase I

2012 - Phase II

South Stream: Onshore Part

South Stream: Offshore Part

Agreements Bulgaria, Hungary, Greece, Serbia, Slovenia

Length 1,300 km to Austria + 990 km to Greece

Participants Gazprom (50%), ENI (50%)

Length 902 km

Capacity up to 63 bcm based on FEED


24

LNG Demand in North America and Asia-Pacific


Source : Pace Global, 2009 Source : Energy Information Administration, 2009

Yamal

Sakhalin

Shtokman

LNG LNG LNG

LNG LNG LNG

LNG LNG LNG

USA Gas-Demand Gap

bcm

a

29 102184 235 292

300

400

500

600

700

800

2010 2015 2020 2025 2030

Pipeline ImportsFields in Operation New Gas (Inc. LNG)

Asia-Pacific Gas Demand

bcm

a0

200

400

600

800

1 000

2006 2010 2015 2020 2025 2030

Other Non-OECD Asia South Korea Japan India China

25

Chinese Gas Demand

At the end of 2009 Gazprom and China National

Petroleum Corporation signed basic Heads of

Agreement for gas deliveries and are now

working on the Commercial Agreement.

0

100

200

300

400

2005 2010 2015 2020 2025

Gas demand (bcm)

Source: Wood Mackenzie, 2009

13%

37%

43%

52%

Importdependency

• Expected gas demand growth of 300% by 2030 from 105.8 bcm to c. 330 bcm

• Gas share in Chinese energy demand should grow from current figure of 3.4% to 8-10% in 2030

• Import dependence is inevitable - pipeline and LNG supplies contracted from Australia, Malaysia, Turkmenistan, Qatar, Indonesia, Yemen, and others cannot increase substantially

• Considering its projected market growth, Russian gas is the only long term sustainable solution - Gazprom and Chinese National Petroleum Company are in intensive negotiations over the contract for volumes comparable to current China consumption


26

Environmental Benefit and Cost Competitiveness of Gas-Fired Power Generation

The Investment Costs of Achieving Different Levels of GHG Reductions in Europe by Displacing Coal-Fired Power Generation

0

100

200

300

400

500

600

700

800

900

10

30

50

70

90

110

130

150

170

190

210

230

250

270

290

310

330

350

370

390

410

430

450

470

490

Million tonnes of CO2e saved

Inve

stm

ent in

US$

bn

Total additional

cut in GHG

required to

achieve EU target

solar

nuclear

wind

onsh

gas

GHG saved by replacing

50% of hard coal-fired

plants in the EU27 with gas-

fired CCGT & costs for

equivalent CO2 saving

through use of other

technologies


27

Energy Security and Gas-Fired Power Generation

Comparison of Capital Investment Costs and Reliability In Meeting Peak Load by Technology

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

0% 5% 10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

Availability at winter system peak

Cap

ital i

nves

tmen

t U

S$/

KW solar

nuclear

wind gas

biomass

High reliability

Low cost


28

Andrey Kruglov

Part 3. Solid Financial Position



29

Sales and Production Recovery

2

6

10

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2007 2008 2009

10

20

30

40

50


2007 2008 2009

Monthly Gas Exports to Western Europe

bcm

Monthly Gas Sales in Russia bcm

5

15


2007 2008 2009

Source: Company data

bcmMonthly Gas Exports to FSU(1)

25

35

45

55


2007 2008 2009

Gazprom Monthly Gas Productionbcm


Source: Company dataSource: Company data


1. Including operations of RosUkrEnergo in 2007 and 2008

30

Financial Performance, $ bln

$46

$25

9M08 9M09

$102$80

9M08 9M09

$33 $31 $27 $23 $26

3Q08 4Q08 1Q09 2Q09 3Q09

(21%)

$14$10 $10

$6 $7

3Q08 4Q08 1Q09 2Q09 3Q09

$5,8$6,2

$3,0$1,3

$5,2

3Q08 4Q08 1Q09 2Q09 3Q09

(50%) (46%)

(22%)

17%

13%

Adj. EBITDAAdj. EBITDA(1)(1)

– Increase in 9M09 operating costs is mainly associated with purchased oil and gas costs growth.

– Costs of purchased oil and gas increase in 9M09 primarily relates to the increase in the gas purchase price from Central Asian suppliers

– 3Q09 profit for the period increase mainly relates to decrease of income tax rate from 24% to 20% and to non-taxable profits and losses dynamics.

SalesSales

– Global gas demand drop followed by decrease in volumes of gas sold to main markets in 9M09 resulted in sales down by 22% y-o-y.

– 21% sales decrease in 3Q09 mainly relates to decline in sales of oil and gas condensate since world prices in reporting period were lower then in previous year

Exchange rates applied as for the end of the respective period

1. EBITDA calculated as operating profit plus depreciation and impairment provisions for assets (includes impairment provisions of accounts receivable and prepayments, assets under construction, investments and other long-term assets and inventory obsolescence) except for impairment provisions for accounts receivable and prepayments.

2. Profit for the period attributable to owners of OAO Gazprom.

$28

$16

9M08 9M09

(6)%12% (43%)


Profit for the periodProfit for the period(2)(2)

31

Measures and Results of 2009 Financial Strategy

Strategy GuidelinesStrategy Guidelines

Operating and Investment ActivitiesOperating and Investment Activities Financial ActivitiesFinancial Activities

CapExCapExManagementManagement

FinancialFinancialInvestmentsInvestmentsManagementManagement

OpExOpExManagementManagement

Working CapitalWorking CapitalManagementManagement

Cash PoolingCash PoolingBudgetingBudgetingDebt andDebt and

BorrowingsBorrowingsManagementManagement

Self fundingReduction of

financialinvestments

Reduction ofOpEx

Reduction ofaccountsreceivable

Internal cash management

Budget scenariosbased on

$25, $30 and $41 oil price forecasts

Usage of internal

financial resources

Projects prioritisation

Projectsfeasibility in

crisisenvironment

Optimisation ofgas purchasing

Management ofaccounts payable

Payments monitoring

Cost cutting programRefinancing of

expensive debts

Execution monitoring

Assessment of opportunity

for raising funds

Optimisation ofheadcount

Reduction ofinventories

Reduction ofnon-core assets

Control over Group

borrowings


32

Cost Control Measures (Parent Company)*

Price optimisation for goods, services, construction and assembly works (decreasing coefficient 0.8)

Substitution of domestic supplies for imported materials and equipment

Extension of the gas and energy saving programs

Reduction of production costs (per unit, y-o-y) - 4%

Reduction of transportation costs (per unit, y-o-y) - 1%

2010 net income of OAO Gazprom is expected to increase (y-o-y) 2x

2009 2009 Cost control Cost control goals were goals were

primarily primarily

regarding: regarding:

Materials and equipment purchasing

Repair and maintenance

Capital construction


Labour Cost

20102010Program Program of cost of cost

optimisation: optimisation:

RR 11.7 bln savings

plan

Price Reductions for Materials and Equipment in 2009

Pipes - 22%

Gas pumping equipment - 5%

Processing equipment - 10 - 20%

Shutoff valves - 12%

Spare parts for gas compressor units and stations - 5 - 12%

Maintenance of gas compressor unit drives - 5 - 7%

Airplane and turbine oils - 47%

Labour Cost Management

Reduction of staff hiring (y-o-y) - 90%

RR 14.5 bln (12%)

savings from price reduction

* According to management accounting

33

Working Capital Management

Accounts Receivable Turnover

8.2x9.5x

7.6x8.9x

7.5x

5.9x4.9x

3

6

9

12

2003 2004 2005 2006 2007 2008 9m2009 LTM

times a year

RR 30 bln increase

in Companyturnover

Priority for domestic supplies in materials and equipment purchasing for construction projects

Reduction of advance payments for materials andequipment

Obligatory tendering process for supplies and service purchased contracts

IMPROVEMENT IN WORKING CAPITAL MANAGEMENT

New MeasuresNew Measures

in Working in Working Capital Capital

ManagementManagement


34

OAO Gazprom Investment Program

613.8483.5

699.9

138.8139.6

220.6138.5

0

500

1 000

2009 Initial 2009 Revised 2010

CapEx Long-Term Financial Investments

2009 Investment Program Adjustment and 2010 Investment Program(1)

RR bln

920. 4

761.5 752.6Purchase of 20% of Gazprom Neft

2010 Priority Investments

Sakhalin-Khabarovsk-Vladivostok pipeline,

Gas supply to the Kamchatka Region

Eastern Gas ProgramEastern Gas ProgramOther Major Other Major

Transportation and Production ProjectsTransportation and Production Projects

Shtokmanovskoye and Prirazlomnoye fields,

Nord Stream, Pochinki-Gryazovets,

Dzhubga-Lazorevskoye-Sochi pipe lines

Comprehensive Comprehensive

Development Program in YamalDevelopment Program in Yamal

Cenomanian-Aptian deposits of the Bovanenkovskoye field,

Bovenenkovo-Ukhta pipe line

RR bln

1. Totals may not sum due to rounding


35

Debt and Liquidity Management

BB+

BB

BB-

BBB

BBB-

BBB

BB

BB+

BBB-

Baa1

A3Baa1

Baa2Baa2

Baa3

Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10

S&P Fitch Moody's

Investment Grade

Credit Ratings Credit Metrics(1)

1,7

0.9

1.7

1.1

1.6

1,4

0.7

1.4

0.8

1.4

2005 2006 2007 2008 9m 2009 LTM

Total Debt / Adj. EBITDA Net Debt / Adj. EBITDA

$35 $35 $43 $49

$12 $10$12 $10

2008 1Q09 1H09 9M09

Net Debt Cash&Cash equivalents

Total and Net Debt Debt Management Measures

� Works on interest rates reduction

� Financing with insurance coverage

� Introduction of the new European Commercial Papers (ECP) Program

� Liquidity management: introduction of cash-pooling system

- 41 subsidiaries and 14 branches involved - Earnings from fund allocation in the System increased by 40%- Potential volume of preferential credits accumulated

in the Pool amounts to RR25 bln


1. Calculated as per the end of the respective period

$59$55$47 $45

36

>4 800

1 064 1 180 1 3541 699

1 9702 495 2 870

3 3003 795

2005 2006 2007 2008 2009E 2010E 2011E 2012E 2013E 2014E

Sources of Additional Revenues

43%59%

23%38%

18% 19%

Revenue 2009E Revenue 2014E

Europe Russia FSU

– Price liberalisation principles in gas deliveries to the FSU countries are expected to be implemented by 2011(1)

– Significant price increase expected due to the liberalisation of the Russian market by 2014

– Profit from domestic gas sales is to reach appx. RR70 bln in 2009

Gas Sales Breakdown and Price Liberalisation

Average FSU Export Price Growth

$/mcm

Domestic Wholesale Price Growth for Industrial Consumers

RR/mcm

+11% +15% +25%+16%

“Net Back” to European Sales(3)

+27%

1. Except Armenia2. Pursuant to “General assumptions and forecast of social and economic development in Russia 15% annual price growth for the period from 2010 to 2012” designed by the Russian Ministry of Economic Development in July 20093. According to Ministry of Economic Development oil price forecast of $76 Urals

+15%

Gazprom’s proposal to link domestic prices to European

“Net Back”

273

208

159

1118961

2005 2006 2007 2008 2009E 2010E

+46%+25%

+43%

+31%

+31%

(2)

(2)


37

Enhancement of IT Systems

– Creation of a unified IT environment

– Improvement of information transparency

– Closer monitoring of investment projects

– Reduction of preparation period for financial reports


38

Dividend Policy

1. Company development: 75% of parent company net profit (RAS). No allocation to the reserve fund, as it was formed from allocation of previous years

2. Dividends: 2% of market capitalisation, but not more than 10% of parent company net profit (RAS)

3. Remaining part: 15% of parent company net profit (RAS) is equally distributed between the dividend payment and company development

Dividend Policy

10%

75%15%

10%

7.5%

Dividends

Parent Company Net Profit(Russian Accounting Standards)

Historical Dividends RR per Share

0.36

2.662.54

1.19

0.690.44

1.50

2002 2003 2004 2005 2006 2007 2008

Pursuant to the Russian

Government’s Directive


39

Potential for Further Value Growth

50

100

150

200

250

300

350

400

Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10

MICEX Oil&Gas Index Gazprom share price

Current Share

Price

2010 Consensus

Target Price

Gazprom Share Price Performance vs Russia’s MICEX Oil & Gas Index

Source Bloomberg

RR 190RR 254

2010 Investors’ Concerns Mitigation2009 Investors’ Concerns

Transit conflict with Ukraine and concerns on conflict recurrence in the beginning of 2010

Sharp production decline in the 1H 2009

Speculations on long-term contracts revision

Decrease in export prices due to low oil price

Uncertainty over price liberalisation in Russia

Expensive Central Asian gas to influence revenue

Source: Bloomberg, Interfax

Ukraine paid in full for Russian gas in January 2010Most of the permissions for alternative transport routes have been received

Production rebound in 2H 2009 due to increase in European sales and colder winter

No significant revision of long-term contracts

Improving oil price through-out 2009

From January 1, 2010 the price for industrial consumers was increased by 15%,

implying 26% y-o-y average price growth

Decrease in Central Asian gas purchases and more favorable contract terms withCentral Asian countries

RR

Reb

ased

to G

azpr

om s

hare

pric

e

24 Buy

3 Hold


40

Vadim Yakovlev

Deputy Chairman of the Management Board

CFO of Gazprom Neft

Part 4. Oil Business Development

41

Gazprom Neft at a Glance

UPSTREAM

Combined consolidated production1

47.9 mln tonnes per year(962 kbpd):

33 mln tonnes own subsidiaries

14.9 mln tonnes equityaffiliated units

REFINING

Total Refining – 34.2 mln tonnesper year (687 kbpd):

27.4 mln tonnes own subsidiaries

6.8 mln tonnes equityaffiliated units

MARKETING

1 489 retail outlet stations in Russia, the Balkans and CIS

9 Bunkering facilities in Russia

6 airport filling terminals and

Overseas trading unit in Austria

2009 2009 2009

Source: Company data.

1. Including Gazprom Neft share in equity investees and recently acquired assets

Oil Business Development

42

October 2010-2014February

Oil Business Development within Gazprom Group

Gazprom acquired 75%stake in Sibneft

2005 2006

Gazprom oil strategy isapproved by BOD

2007

Acquired 50% stakein Tomskneft

Start of Gazprom oil assets integration process Special entity “Gazprom Neft –Yamal” is created

J V «Moscow NPZ Holdings B.V.»established to manageMoscow Oil refinery

2008 2009

NIS (51%) acquisition

Sibir Energy (55%) acquisition

Ruble Bond IssueReopening of the domestic

market after the crisis

Gazprom Neft Wins Tenderon Iraqi Badra Oil Field

Development

New retail network rebrandingcampaign launched

September December May June July September December

New blocks development in traditional producing regions

Gazprom oil assets integration: Novy Port, Orenburg fields

Expansion into new producing regions: Messoyaha, Kuyumba

Increasing refining capacity of existing assets (reconstruction)

Expansion of retail network in Russia and abroad

UPSTREAM DOWNSTREAM

Launch of large-scale projects to ensurelong-term development and business

growth

April


43

Gazprom Neft Strategic Goals in Figures:100 - 70 - 40

70 MM tonnes – oil refining

in Russia – up to 40 MM tons

in Europe – up to 30 MM tons

Increase of yield of light HC products up to 77%

Increase of processing depth up to 90%

40 MM tonnes – sales of oil products via premium channels in Russia and

abroad12 MM tons – retail sales at fuel filling stations (8,2 MM tons in Russia and CIS)

18 MM tons – sale of products business units - Aero (jet fuel), lubricants

p (packed oils),bitumen, petrochemistry

10 MM tons – small wholesales to large ultimate users

Share of production fields in the initial stage of

exploration not less than 50%

Reserve life- not less than 20 years

100 MM tonnes of oil equivalent - production

Large scale business development provides for the

highest Total Shareholder Return among Russian oil

companies while maintaining its leading position in business effectiveness among vertical integrated oil companies in

Russia



44

Crude balance 2020, MM tones/year

14-19

25-30

2,2

7,3

15-20

Exports

Refining

NIS

Belorussia

Western Europe Russia

44

6

Refining in Russia

40

90

Russia’s resources

10

– The Company’s target is to refine at least 50 per cent of export oil volumes

– Refining capacity needs to be expanded in Europe as a core oil trade market:

– Eastern Siberia’s oil resources have priority for deliveries via ESPO pipeline. According to the Ministry of Energy, in 2020 production in Eastern Siberia will hit 80 mm tones per year and will fill ESPO

– The resources originating from Western Siberia, Offshore, NAO and YaNAO will be exported to the Western Europe (Primorsk, Novorossiysk, “Druzhba”)

Eastern Siberia

Western Siberia

Shelf, Nenets district, Yamal

605748

270

Overseas oil resources

New refining assets

Crude Oil SalesFrom Eastern Siberia toAsian Pacific Region


Production 2009E Production 2020E

45

$2 375

$5 201

9M08 9M09

Gazprom Neft’s Key Financials, $ mln

RevenuesRevenues(1)(1)

EBITDAEBITDA(2)(2)

Net IncomeNet Income

$10 307$5 998 $4 242 $5 269 $7 087

3Q08 4Q08 1Q09 2Q09 3Q09

(31%)34%

(42%)

$2 752

$416 $957 $1 501 $1 823

3Q08 4Q08 1Q09 2Q09 3Q09

(48%)

$1 593

-$543

$335$1 196 $846

3Q08 4Q08 1Q09 2Q09 3Q09

(54%)

(34%)21%

(47%)(29%)

$8 164

$4 280

9M08 9M09

$28 717

$16 596

9M08 9M09

– Export customs duty, mineral extraction tax and continuing RUR appreciation constrained EBITDA growth

– High refining volume in crude balance supported quarterly EBITDA growth

– FX gain as well as gain from Sibir Energy acquisition in 2Q09 hampered q-o-q net income growth in 3Q09

– Oil price fluctuations drove revenues up q-o-q and down y-o-y


Source: Company data.1. Revenues for 2007 and 1-3Q08 were adjusted for excise tax that was previously excluded (2007 –$ 0.7B; 1Q08 – $0.2B, 2Q08 - $0.3B; 3Q08 - $0.8B)2. EBITDA includes the Company’s share in EBITDA of its equity affiliates (Slavneft , Tomskneft and Salym Petroleum Development)

46

Operational Performance


1. Production figures include 50% of Slavneft and Tomskneft


+ 3.5%

Crude Output (MM Tonnes)

47.9

Crude Oil Sales (MM Tonnes)

Refining (MM Tonnes)

Oil Products Sales (MM Tonnes)

26.7

32.1

43.1

29.0

26.128.5

34.246.3

+ 7.4% + 9.2%

+ 20.0%

19.220.5 19.0

+10.7%

+ 8.6%

+ 6.7% - 7.3%

32.7 30.8 29.9

0.7

10.6 9.8 9.55.42.4

5.7

2007 2008 2009E

Own Production NIS Slavneft(1) Tomskneft(1) Sibir Energy

16.5 18.4 18.4

2.96.3

6.86.83.3

6.13.3

2007 2008 2009E

Omsk NIS Yaroslavl Moscow

15.1 16.3 15.2

2.5 3.61.60.9 0.23.3

2007 2008 2009E

Crude export Crude export to CIS Crude domestic

11.4 11.4 12.3

1.9 1.7

13.4 15.718.1

1.9

2007 2008 2009E

Export Export to CIS Domestic

47

Gazprom Neft has Strong Reserves Upside Potential

Proved*

Probable

3P

Source: Company dataSource: Company data

Possible

0

5 000

10 000

15 000

20 000 1 844

1 525

1 410

115

319

1150

1250

1350

1450

1550

1650

1750

1850

1950

ABC1 Reserves revisions & additions (mln t) as of Dec 31, 2009

As ofDec 31,

2008

RevisionsAnd

Acquisitions

As ofDec 31,

2009

Licenses from

Gazprom

Potential

Resources and Reserves(1)

(MM boe), as of Dec 31, 2008 • 118% 3-year reserve replacement ratioexcluding acquisitions and divestments (PRMS based)

• Proved reserve life maintained at 21 years

• ABC1 reserves figure as of Dec 31, 2009 (Russian classification) suggests substantial improvement in reserves volume

• Gazprom assets to be transferred to Gazprom Neft will increase the Company’s reserves even further


1. Reserves include Gazprom Neft’s share in Reserves of its equity affiliates (Slavneft and Tomskneft)

48

High Refining Cover – Gazprom Neft’s Key Competitive Advantage

1. Source: Company data, IEA, European refining margin states for average Europe NW cracking refineries processing Urals, operating costs are assumed at $2/bbl

50%

55%

60%

65%

70%

75%

80%

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09E

Gazprom Neft’s refining cover evolution

Omsk

Moscow

YANOS

0

5

10

15

20

25

30

35Gazprom Neft’s vs. European refining margin(1),

$/bbl

Europe

• Gazprom Neft’s netbacks at domestic refineries steadily outperform those of crude exports (except for a unique situation in 1H09)

• Given Russia-specific fiscal stimulus for processing, Gazprom Neft has substantially increased its refining exposure (Refining to Production) over the past two years in order to fully exploit the high global crude pricing environment


1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09E-5

49

Gazprom Neft is Accelerating its Downstream Facilities Upgrade Program

2009


Strategic goals by 2020:

• Quality upgrade program (Euro 4,5)

• Substantial improvement in the Company’s downstream facilities sophistication

Omsk

Moscow

Diesel Hydro-TreatingUnit launched; Technological

Condensate-Treating Unit upgraded;

Fuel Dehydration Unit Installed; Isomerization Unit construction

started

Moscow

Yaroslavl Five-year upgradeprogram approved; Diesel

Hydro-Treating Unit upgraded;

Hydrogen Production and Isomerization Units construction started

Mid-term goals by 2012

Installation of:

Diesel Hydro Reforming Unit, Catalytic Cracking and Isomerization Units

Installation of:

Diesel Hydro-Treating,

Gasoline Hydro-Treating andIsomerization Units

+750,000 tpa high-octane gasoline

By 2012 Omsk, Yaroslavl and Moscow refineries should all meet Euro 4 standards

Gain control

Currently Gazprom Neft is actively developing MNPZ’s

upgrade program

Strategic goals by 2020:

• Quality upgrade program (Euro 5)

• Substantial improvement in the sophistication &efficiency of the Company’s downstream facilities

• Refining depth >90%Installation of:

Primary Distillation, Catalytic

Cracking and Isomerization Units

+550,000 tpa high-octane gasoline



50

1 4191 406

858

2008 2009 2010E

– Aero fuelling – Largest jet fueling terminals operator in Russia, new fueling terminals in Bryansk, Tomsk, Chita, new fueling terminal in Moscow (Sheremetievo) – construction-in-progress

– Bunkering – Largest volumes in Russia, expansion into new regions (Black Sea), Ust Luga bunkering

– Lubricants – Acquisition of Lubricants Plant in Italy (Bari) - February 2009, production of new oils: 50 in Russia and 40 in Italy

– Retail network - At the end of September 2009 own retail network (including NIS and Sibir) totaled 1,489 gas stations

Sales region

402

847 807

2008 2009 2010E

Aero fuelling (‘000 tonnes) (2)

Bunkering (‘000 tonnes)

Lubricants (‘000 tonnes)

5063

79

2008 2009 2010

111%

64%

26%

Expansion of Oil Products MarketingNew Products Sales via Premium Channels (1)

Khabarovsk

Kirgizia Chelyabinsk region

+40 gas stations

Kazakhstan

Novorossiysk

Bunkering

Airports

Italy

Serbia

Belorussia

Murmansk

Archangelsk

Ust-Luga

-5%

1%

25%


Source: Company data.1. Premium channels – sales from tank farms, terminals, filling stations, fueling terminals and packed oils sales2. Volume decline as Government bodies impose new regulations with respect to jet fuel pricing which makes this activity less attractive

New asset 2009

51

New Retail Brand: Bringing the Idea to Life

Rebranding Campaign Key Figures

2009 2010E 2011E 2012E Total

Number of rebranded filling stations 208 Full implementation

179 Limited implementation

300 229 200 937

Average volume turnover (th.t/ day) 8.8 9.0 9.6 10.5


52

18%

45%

37%

ST Bridge LT

1. Maturity profile due to refinanced bridge repayments ($857 mln)2. Bridge facility was refinanced under the long term basis in December 2009

Debt Profile: Shifting from Short Term to Long Term Financing; Maintaining Investment Grade Ratings

Net Debt/EBITDA, GearingLong Term Debt Maturity Profile as of

September 30, 2009(1)

% US$MM

0,00

0,30

0,60

0,90

1,20

2006 2007 2008 3Q09

0%

10%

20%

30%

Net Debt/EBITDA (LHS) Gearing (RHS)

1 0561 169

650

311

311

235

166 113

2010 2011 2012 2013 2014

Debt Structure as of September 2009 Credit Ratings

%

87%

13%

Foreign Currency (USD, EUR, RSD) RUR

Investment Grade

S&P Moodys

B-/B3

B/B2

B+/B1

BB-/Ba3

BB/Ba2

BB+/Ba1

BBB-/Baa3

BBB/Baa2

2003 2004 2005 2006 2007 20092008



(2)

53

New Assets NIS Development

• 4.4% Production growth

in 2009 vs.2008

• Euro diesel production launched

Domestic market share increase to 29% from 8%

• Refineries modernization

program launched

• Headcount structure

optimization -

(9.7%) from 2008

• Debt structure optimization:

Decrease of short term debt to 25%

n 2009 from 85% in 2008

Achieved Operating and Financial Results 2009

2009 2014 %

Proved reserves, MM toe 13 14 +8%

Production, MM tones 0.7 1.4 +100%

Refining, MM tones 2.7 4.5 +67%

Euro diesel production, MM tones 0.19 1.7 +795%

Sales through own retail network, MM tones 0.6 1 +67%

Sales through partners’ network, MM tones - 1 + 100%

Export sales, MM tones 0.32 0.7 +119%

Lifting costs,$/boe $13 $9 +44%

Processing costs,$/t $40 $25 -38%

Unit sales, per gas station, tone/day 3.4 6.3 +85%



54

New Assets Sibir Energy Contribution

Sources: Company data, Public sources

5%

95% 92%

8% 7%

93%

Production RefiningProduct

sales

Gazprom Neft Sibir Energy



55

Denis Fedorov

Part 5. Power Generation Business Development

Head of Gazprom Directorate for Development of the

Power Generation Sector and Power Generation Marketing

General Director of Gazprom Energoholding

56

RysHydro

11%RosAtom

10%

Inter RAO

8%

16%

Other

Gazprom Generation Assets: Position in Russiaand Globally

Gazprom share in Russia’s Installed Capacity (1)

1. 2008 data2. 2009 data

414849517591149163180180185

253

395441

610615

0

200

400

600

800

E.O

N

ED

F

Iber

drol

a

KE

PC

O

Ene

l

AE

P

Gaz

prom

RW

E

Duk

e

End

esa

Ten

aga

CE

Z A

S

End

esa

Ene

rgia

s

For

tum

Sco

ttish

&

11

127

9474

6447 43 42 39 39 36 36

13 13 12 12 11

0

50

100

150

ED

F

Ene

l

E.O

N

KE

PC

O

End

esa

Iber

drol

a

Sou

ther

n

AE

P

Duk

e

Gaz

prom

RW

E

End

esa

Ene

rgia

s

CE

Z A

S

Ten

aga

For

tum

Sco

ttish

&

Installed Capacities (1) Power Generation Volumes (1)

Other

17%

Gazprom share in Russia’s Power Generation Volumes

Sources: State Statistics Committee, Company Data, System Operator of UES

(2)

164.6 bln kWh

827.4 bln kWh

(GW) (bln kWh)

36 GW

123 GW

25 GW

23 GW

18 GW

Power Generation Business Development

57

Power

Generation

6%

Role of the Power Generation Business for Gazprom Group

Power

Generation

3%

Gazprom

Group

Gazprom Group 9M09 Revenue,

$mn

Generation companies’ shares in the Group’s9M09 sales revenue, $mn

Power Generation assets share in the Group’smarket capitalisation (2)

Power generation companies’market capitalisation, $mn (2)

1. Mosenergo, OGK-2 and OGK-6 results only. TGC-1 results are not consolidated in the Group’s 9M09 IFRS results2. As of 14 January 20103. Accounting for Gazprom Group share in Mosenergo, TGC-1, OGK-2, OGK-6

(3)

Sources: Company data, Bloomberg

$970

$1 003

$2,587

$4 843

$2 301

$1 087$815

$4,560


(1)

58

Structure of the Group’s Power Assets

ZAO Kaunas TPP

Adler TPP

Kaliningrad TPP-2

OAO FGC UES of Russia

OAO TGK-11

OAO TGK-12

OAO TGK-13

OAO TGK-5

OAO OGK-5

OAO Inter RAO UES

OAO MRSK Holding

OAO RAO Far East Energy Systems

Non-Strategic Assets

53.5%

51.8%

50.3%

3.9%

5.3%

4.4%

4.9%

5.0%

5.3%

10.5%

10.5%

8.5%

50.3%

OAO Mezhregionenergo

sbyt

OOO Gazpromenergo

Core generation Assets


59

Consolidation of the Group’s Strategic Generation Assets as Part of OOO Gazprom Energoholding

In 2009 Gazprom Board of Directors’ decision on consolidation of generation assets as part of OOO Gazprom Energoholding was implemented

– Largest TGK in Russia by installed electricity and thermal power generation capacities

– Services about 70% of the electrical and thermal power market in Moscow region

– Installed capacity – 11,918.3 MW and 34,900 GCal-hr

– Installed capacity utilisation ratio – 65%

– Average year of facilities commissioning – 1985

– Key power generation company in Northwestern Federal District

– Includes 55 power generation stations

– Hydro power stations share in generation volumes – around 50%

– Installed capacity – 6,313 MW and 14,362 GCal-hr

– Installed capacity utilisation ratio – 49%


– Includes 5 State District Power Stations, about 70% of generation capacities located in the Ural Federal District

– №2 among wholesale generation companies by utilisation ratio – 65%

– Installed capacity – 8,695 MW


– Includes 6 State District Power Stations, about 40% of generation capacities located in Central UES

– №2 by power generation capacities and №2 by thermal power generation capacities among wholesale generation companies

– Installed capacity – 9,052 MW

– Utilisation ratio – 49%



60

531

3,6853,227

284

1770

2008 2009E

Revenue EBITDA Net Income

Operational and Financial Results and EstimatesPower,

bln kWhHeat, mln

GCal

$mln (1)Power, bln kWh

Heat, mln GCal


1. Exchange rates used for conversion as of the end of corresponding periods


61.7

64.3

62.4

65.4

2008 Generation Volume 2009E Generation Volume

26.726.9

26.3

26.9


273

1,3681,143

1298635

2008 2009E


47.249.8

2.3 2.4


29.038.9

4.4 4.4


106

1,3481,380

21 28

-132008 2009E


178

1,3841,439

76 80

-282008 2009ERevenue EBITDA Net Income

61

Long-Term Capacity Market

- Currently the formation of the long-term capacity market in Russia is being finalised

- Recently a methodology for determining economic feasibility of generation companies’ bids for sale of capacities has been approved, making the pricing mechanism more transparent

- Introduction of new capacities results in higher operational margins:

� In 2010, average old capacity tariff for Mosenergo is expected to be RR132 thousand/MW per month. Average new capacity tariff is expected to be RR 533 thousand/MW per month

� In 2010, average old capacity tariff for TGC-1 is expected to be RR87 thousand/MW per month. Average new capacity tariff is expected to be RR422 thousand/MW per month

64.4%

88.1%

35.6%

11.9%

0%

20%

40%

60%

80%

100%

Capacity Capacity revenue

Old capacity New capacity

Mosenergo capacity revenues

84.4%96.3%

15.6%3.7%

0%

20%

40%

60%

80%

100%

Capacity Capacity revenue

Old capacity New capacity

TGC-1 capacity revenues



62

Investment Outlook: 2008-2010 Commissioning

– Gazprom Group is #1 in Russia by generation capacity commissioning in 2007-2009

– In 2009, installed capacity of the Group’s generation assets was increased by 215 MW

– In 2010, Gazprom is set to increase its generation capacity by up to 1.8 GW

Capacity Increase, Capacity Increase

MW Total, MW

2008

Mosenergo 875905

TGC-1 30

2009

TGC-1 215 215

2010 (Plan)

TGC-1 823

1,819Mosenergo 436

OGK-6 110

Kaliningrad TPP-2 450

Other91%

Other

22%

215 MW

905 MW

Gazprom Group share in Russian generation capacity commissioning, 2008

Gazprom Group share in Russian generation capacity commissioning, 2009



63

0.8 1.6

10.49.1

10.2

8.7

7.7

6.3

14.9

11.9

Investment Outlook: Commissioning of New Facilities

– Gazprom Group’s adjusted investment program for power generation provides for installed capacity increase from 36.8 to 44.8 GW that will ensure that the Group keeps its leading position in the sector

– The total CAPEX until 2020 is set to amount to RR 315 bln


1. 2009 data2. As of 14 January 2010 adjustments to the investment programmes have not been approved by the government3. Figure does not include decommissioning of capacities

Current Capacity (1) Planned Capacity After Facilities Commissioning by 2020 (2)

44.8 GW (3)

36.8 GW(3)

(3)

(3)

(3)

+17%

+25%

+22%

+15%

+50%


64

Potential for Value Creation

Market values of power generation companies per capacity unit, $/kW (1)

90

127

321

368

414

580

692

863

1 087

1 146

1 160

1 287

1 289

1 649

2 408

0 500 1 000 1 500 2 000 2 500 3 000

CEZ AS

Scottish & Southern Energy

Energias de Portugal

Cia. Paranaense de Energia

Endesa Chile

Iberdrola

E.ON

Tenaga Nasional

EDF

Enel

Mosenergo

TGK-1

KEPCO

OGK-2

OGK-6

Sources: Bloomberg, Company Data

1. As of 18 January 2010

– OOO Gazprom Energoholding is one of the largest energy companies in Russia

– Its large-scale investment program will permit the Company to maintain the leading position in the sector

– The holding’s generation assets are located in the regions with stable energy consumption patterns

– Complete liberalisation of the electricity market in Russia is expected by 2011

– Launch of the long-term capacity market justifies economic viability of Gazprom’s investment program

– OOO Gazprom Energoholding companies are fundamentally undervalued in comparison with the global peers


65

Andrey Kruglov

Conclusions



66

Ready for the Next Step

Financials

Cost controlAccess to capital

Self-funding

Development

ProjectsExport Regions

Business Segments

Consumers

Demand Recovery in Europe Economic Growth Forecast

in Russia

Capacity

Unmatched Reserve BaseUnique Transportation System

GainingGaining

Momentum!Momentum!

Conclusions

2010 02 04 id gazprom website · 2010-02-11 · 2008 2010 2015 2020 bcm 0 200 400 600 2008 2010...

Documents