gas for the future - gazprom...2013/02/08 · 3 0,051,102 0,102,204 153,204,255 153,051,000...
TRANSCRIPT
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Gas for the Future
February 2013
Gazprom Investor Day
1234425-001_Gazprom_Investor_Day_combined.pptx
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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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We are Global Energy Major
Investor Day 2013
China
Taiwan
Republic of Korea
Japan
European
Countries
One of the leading energy companies
6 tcm of gas sold on domestic market
11 tcm of gas produced
447mm tons of oil and gas condensate
produced
31 thousand km of new pipelines built
Owner of the largest gas transportation system
The major natural gas supplier to Russian, FSU and
European markets
4 tcm of gas exported
7.2 tcm of new gas reserves discovered
856 mm tons of oil and gas condensate
reserves discovered
Gazprom Activity in Russia and Abroad
Hydrocarbons search and geological exploration
Gas and gas condensate production
Oil production
Projects of methane production from coal beds
Raw hydrocarbons processing
Gas transportation
Gas underground storage
Electric power and heat generation
Spot sales of LNG
Sales of gas, supplied by gas trunk pipelines
Gas sales to end-consumers
Oil and gas condensate sales
Refined products sales
Electricity sales
Oil products distribution through gasoline stations network
FSU countries Russia
Cuba
Venezuela Bolivia Algeria Equatorial
Guinea
Libya Iraq Kuwait UAE
(Dubai)
India Thailand Vietnam
Achievements for 20 years
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Gazprom was established as an Open Joint Stock company
Gazprom acquired Gazprom neft (formerly Sibneft)
Gazprom entered into the energy business (consolidated under Gazprom Energoholding ) 1973
1993
2005
2007-
2009
Gas
100%
Gas(1)
61%
Liquid
hydrocarbons
32%
Energy
7%
1993
Gazprom revenue structure
1. Including gas transportation other revenues
2012 First Russian
gas was
delivered to
Europe
History of Business Diversification
Investor Day 2013
The largest natural gas exporter to the
European market
A major player in the international oil trade
The leader in the installed capacity and
electric power generation in Russia
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Agenda
Investor Day 2013
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
Generation Sector and Power Generation Marketing
General Director of Gazprom Energoholding
Alexei Yankevich
Member of the Management Board of Gazprom Neft
Deputy CEO for Economics and Finance
of Gazprom Neft
4
Presentation of gas business
Upstream
Vsevolod Cherepanov
Member of Gazprom Management Committee
Head of the Gas, Gas Condensate
and Oil Production Department
Special sections
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5 Investor Day 2013
Part 1. Strategy
Dmitry Lyugai
Member of Gazprom Management Committee
Head of Prospective Development Department
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Gas Demand 2030
Share of gas in global energy consumption
0%
20%
40%
60%
80%
100%
1970 2000 2030F
16% 21%
26%
1.3
1.1
0.7
0.7
0.6
0.2 0.2
2010 2030F
– Asia/Oceania
– North America
4.8 tcm
– Latin America
– Europe(2)
– FSU(3)
– Africa
– Middle East
3.2 tcm
1. Cubic meter 8,850 kcal
2. Including Baltic States
3. Excluding Baltic States
Gas consumption by region(1)
Strategy - Investor Day 2013
Source: International Energy Agency, Company’s estimates
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Strategy - Investor Day 2013
Gas import/export in 2030
Growth of gas consumption and production in 2010/2030
(600)
(300)
0
300
600
900
North America Europe CIS Asia Middle East Africa Latin AmericaConsumption Production
bcm
Import
(600)
(300)
0
300
600
900
North America Europe CIS Asia Middle East Africa Latin America
bcm
5.5
Global Gas Import/Export in 2030
Source: Company’s estimates
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0
100
200
300
400
500
600
700
2008-2013/15 2013/15-2020/22 2020/22-2030
Energy efficiency
Energy savings
Russian Gas Market
Strategy - Investor Day 2013
– Russian Energy Strategy 2030 forecast (Nov. 2009)
– Current estimates
Annual economic growth of Russia 3-5%
Gasification of European part of Russia
New infrastructure and market development
in Eastern Siberia and the Far East
Gas Consumption Factors
bcm
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0
100
200
300
2010 2020F 2030F0
100
200
300
2010 2020F 2030F
0
100
200
300
2010 2020F 2030F
0
100
200
300
2010 2020F 2030F
Prospective Sources of Gazprom’s Gas Production
Strategy - Investor Day 2013
Share of Gazprom’s reserves ~18%
in the world gas reserves,
production ~ 15%(1)
Gazprom’s share in Russian
gas reserves ~72%, in production ~ 78%(1)
Gazprom’s gas reserves
of categories А+В+С1 35.1 tcm(1)
Shtokman Eastern Siberia and the Far East
New fields in Nadym-Pur-Taz
Yamal
bcm
High case
1. As for YE2011
0
100
200
300
400
500
600
700
800
2010 2020F 2030F
Shtokman Project
Eastern Siberia and the FarEastYamal Megaproject
New fields in Nadym-Pur-Taz
Currently producing projects
high case
2030F
Source: Company’s estimates
800
700
600
500
400
300
200
100
0 2010 2020F 2030F 2030F
Shtokman project
Eastern Siberia and the Far East
Yamal megaproject
New field in Nadym-Pur-Taz
Currently producing projects
High case
High case
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Existing Under construction Planned
Gazprom’s Priority Projects in Transportation
Project Length,
km
Linear part Compressor
station Capacity, bcmpa
km Ø,
mm P,
MPa unit MW
Gryazovets – Vyborg
917 1,596 (incl.
looping) 1,420/1,220 9.8 6+1 947+208 59
Bovanenkovo – Ukhta
1,110 1,266 1,420 11.8 2+7 224+884 115
(2 lines)
Ukhta – Torzhok 1,362 972+390 1,420 9.8 2+9 100+769 35/45
South Stream 930 930 813 27.5 - - 63
(4 lines)
GTS expansion to ensure gas supplies to the South Stream
2,956 2,481 1,400/700 7.4/11.8 10 1,549 63
XXXX – already built, XXXX – under construction/planned
Strategy - Investor Day 2013
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Development of Gazprom’s Business
in East Siberia and the Far East
Strategy - Investor Day 2013
GAS RESERVES
AND RESOURCES
~ 60 tcm
Eastern Gas Program was approved by the Russian Government in 2007
Surgut
Balagansk
Irkutsk Ulan-Ude
Chita
Zabaykalsk
Skovorodino
Tinda
Blagoveshensk
Daqing
Komsomolsk-
na-Amyre
Habarovsk Sovgavan
Vladivostok
Uzhno-Sakhalinsk
Oha
SAKHALIN
CENTER
Udachmiy
Mirniy RUSSIA YAKUTSK
CENTER KRASNOYARSK
CENTER
NORTH OF THE
TYUMEN
REGION
KAZAKHSTAN
MONGOLIA
CHINA
Lanzhou
Xian
Xinyang Shanghai
Kitakyusyu
Osaka
JAPAN
N. KOREA
S. KOREA Busan
Dalian
Shenyang
Beijing
Pyongyang Seoul
Tokyo Ulan-Bator
Pipeline gas
Yakutsk
Tyumen CS Bogandinskay
Chelabinsk Proskokovo Tomsk
Novokyznetsk
Abakan Barnayl
Biysk Gorno-Altaisk
Boguchani Krasnojarsk
Omsk Kemerovo Novosibirsk Taishet
Gas-production centre
LNG
LNG plant
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1%
25%
22%
14%
8%
14%
16%
2013-2020
Gas CAPEX 2013-2030F
Strategy - Investor Day 2013
1.UGS is underground gas storage UGSS is unified gas supply system
7%
28%
19%10%
8%
11%
16%
Shtokman project
Yamal Megaproject
Eastern Siberia and the Far East
Transport System Development (incl. UGS)
Reconstruction in Transport
Currently existing projects in Production
Other projects within UGSS
2013-2030
Structure of CAPEX by business segment
EXPLORATION
PRODUCTION
TRANSPORT
(incl. UGS(1))
PROCESSING
OTHER
47 %
31 %
6 %
8 %
8 %
700-900 bn RR p.a.
(exploration; new production and
drilling)
(average annual)
Structure of CAPEX by major project
I
Gas Industry Mineral Resource Base Development Program until 2035
II
Work program aimed at hydrocarbon resources development on the Russian Federation shelf until 2030
III
Eastern Gas Program
IV
Strategic target indicators of Gazprom’s development approved by the Board of Directors
Gazprom’s base documents in the area of mineral-resource base and HC production
Dynamics of production and gas reserves increment
NPTR Yamal Nord Stream
Eastern Program
Shtockman South Stream
522.0 540.2 545.1 555.0 556.0 546.8 547.5 459.4 505.6 513.2
95.6
79.0 69.4
104.8 105.7 107.9 106.2 102.0 108.2
133.8
0
20
40
60
80
100
120
140
0
200
400
600
800
1,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Gas production % of gas reserves replenishmentbcm
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Investor Day 2013
Part 2. Upstream
Vsevolod Cherepanov Member of Gazprom Management Committee
Head of the Gas, Gas Condensate and Oil Production Department
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2012 Geological Exploration Results
Upstream - Investor Day 2013
Gazprom72%
Gazprom18%
Discovery of 3 new fields discovered and 10 new deposits within previously
discovered fields
Natural Gas, tcm Gas Condensate, extracted, mm tons Crude Oil, extracted, mm tons
АВС1(1) С2
(2) АВС1(1) С2
(2) АВС1(1) С2
(2)
35.1 8.6 1,382.2 772.9 1,763.7 1,592.1
1. ABC1 reserves - explored reserves according to the Russian standards of classification. Explored gas reserves (categories ABC1) are considered fully recoverable. For oil and gas condensate reserves special index of
extraction is used. This index is calculated taking into account geological and technical factors
2. C2 reserves belong to the estimated ones and serve as a basis for setting up exploration work at a specific field
2012 Reserves Summary
Reserves increase:
Change in : Natural Gas,
bcm
Gas Condensate
& Crude Oil, mm tons
АВС1 reserves as result of geological Exploration 572.6 27.9
С2 reserves as result of geological Exploration 100.1 22.9
44 exploration wells drilled – 74.8 thousand meters of earth material (drilled)
Reserves replacement ratio – 118%
Geological exploration activities:
8%
Unallocated
fund
Independent
Producers
20%
Global gas reserves
Russian gas reserves
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Summary Gas Reserves Information
Upstream - Investor Day 2013
29.9 29.8
33.1 33.6 33.1 35.1
27.9 28.4 29.2 29.9 30.6
31.7
20.8 20.8 21.3 21.9 22.5 22.8
208.6
230.3 230.1 241.4
269.6
299.2
0
40
80
120
160
200
240
280
320
0.0
10.0
20.0
30.0
40.0
50.0
60.0
31-12-06 31-12-07 31-12-08 31-12-09 31-12-10 31-12-11
Gazprom Group gas reserves (ABC1) Audited АВС1 reserves
Proved + probable reserves (PRMS) Present Value (incl. liquid hydrocarbons, sulfur and helium)
tcm USD bn
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1,690 1,690 1,690
1,400
1,450
1,500
1,550
1,600
1,650
1,700
0
100
200
300
400
500
600
700
2012 est. 2013 plan 2014F 2015F
Yamal
Zapolyarnoye field (Cenomanian+ Valanginian)
Medvezhye field - Cenomanian
Yamburgskoye field - Cenomanian
Urengoyskoye field - Cenomanian
Other fields of Nadym-Pur-Taz region
Other regions
Max av. daily production per annum
bcm mmcm/day
487.0 495.7 518.0 518.0
Gazprom production 2012-2015
Gazprom main production regions
Yamal
Nadym-Pur-
Taz Yakutsk
gas
production
center
Sakhalin
gas
production
center
Irkutsk gas
production
center
Comprehensive gas
processing units/
total designed capacity
Gas pumping units/
total designed capacity Wells
2013
2 units /6.0 bcm p.a. 2 units / 50.0 MWh 73 wells
2014
2 units / 30.0 bcm p.a. 5 units / 401.0 MWh 168 wells
2015
2 units / 2.3 bcm p.a. 11 units / 579.8 MWh 138 wells
Capacities commissioning forecast
Production Strategy
Upstream - Investor Day 2013
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Yamal Megaproject
Upstream - Investor Day 2013
Bovanenkovskoye field
0
20
40
60
80
100
2012 est. 2013 plan 2014F 2015F
Production forecast
С1+С2 Reserves 8.6 tcm of gas 1530 mln bbl of condensate
Peak annual production 220 bcm of gas 30 mln bbl of condensate
Tambeyskoye industrial zone
С1+С2 Reserves 3.9 tcm of gas 1430 mln bbl of condensate
Peak annual production 65 bcm of gas 21 mln bbl of condensate
Yuzhnaya industrial zone
С1+С2 Reserves 1.4 tcm of gas 4300 mln bbl of oil
Peak annual production 30 bcm of gas 50.4 mln bbl of oil
Bovanenkovskoye industrial zone
bcm
Combined CAPEX for Yamal Program development(1)
2013 F 2014 F
USD 5.9 bn USD 9.3 bn
KARA SEA Rusanovskoye
Leningradskoye Malyginskoye
Taslyskoye
Syadorskoye
Kharasaveyskoye
Kruzenshternovskoye
Bovanenkovskoye
Verhne-
Tiuteyskoye
Vostochno-
Bovanenkovskoye Nerstinskoye
Neytinskoye
Arcticheskoye
Baidarata
Bay
YAMAL PENINSULA
Sredneyamalskoye
Nurminskoye
Khambateyskoye
Novoportovskoye
Kamennomysskoye
more Obskoye
Parusovoye
OB BAY
TAZ BAY
Semakovskoye
Teta-Yakinskoye
Antipayutinskoye
Severo-Urengoyskoye YAMBURG
TAZOVSKIY
Tchugoriakhinskoye Severo-
Kamenomysskoye
GYDAN BAY
Severo-Tambeyskoye
Zapadno-Tambeyskoye
Yuzhno-Tambeyskoye
Zapadno-
Seykhinskoye
Operating gas pipelines
Projected gas pipelines and gas pipelines under construction Continental fields Shell fields
Wells, well clusters
Comprehensive gas processing unit
1. Data are converted using USD/RR forward exchange rates for Dec 31, 2013 (31.60) and Dec 31, 2014 (33.17) as of Feb 06, 2013
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0
2
4
2013 plan 2014F 2015F
Kirinskoye field
Production forecast bcm
Eastern Gas Program
Upstream - Investor Day 2013
Yakutsk gas production center - Chayandinskoye field
С1+С2 Reserves 1.4 tcm of gas 160 mln bbl of condensate
Peak annual production 25 bcm of gas 3 mln bbl of condensate
С1+С2 Reserves 746.3 bcm of gas 700 mln bbl of condensate
Peak annual production 13 bcm of gas n/a
Krasnoyarsk gas production center - Sobinskoye field
С1+С2 Reserves 154.9 bcm of gas 63 mln bbl of condensate
Peak annual production 5.0 bcm of gas 3 mln bbl of condensate
С1+С2 Reserves 1.5 tcm of gas 575.3 mln bbl of condensate
Peak annual production 35.3 bcm of gas 17 mln bbl of condensate
Irkutsk gas production center - Kovyktinskoye field
Sakhalin gas production center
Combined CAPEX for Eastern Program development(1)
2013 F 2014 F
USD 1.7 bn USD 0.2 bn
SAKHALIN
CENTER
IRKUTSK
CENTER
KRASNOYARSK
CENTER
NORTH OF
THE
TYUMEN
REGION
MONGOLIA
CHINA
KAZAKHSTAN
JAPAN NORTH
KOREA SOUTH
KOREA
BEIJING
PYONGYANG
TOKYO ULAN-BATOR
Operating LNG plants
Pipelines under construction
Operating gas pipeline
LNG plants under construction in Vladivostok
Projected gas processing plants
Gas production center
Blagoveshensk
Khabarovsk
Oha
Uzhno-Sakhalinsk
YAKUTSK
CENTER
Tomsk CS Bogandinskaya
Tyumen
Chelabinsk
Surgut
Omsk
Proskokovo
Barnaul Novokyznetsk
Taishet
Boguchani
Irkutsk
Ulan-Ude
Skovorodino
Tinda
Zabaykalsk
Chita
Shanghai Xinyang Xian
Lanzhou
Kitakyusyu Busan
Osaka
Shenyang
Daqing
Sovgavan
Komsomolsk-na-
Amyre
KAMCHATSK
CENTER
Petropavlovsk-
Kamchatsky Udachniy Yakutsk
Novoisbirsk Kemerovo Achinsk
Krasnoyarsk
Abakan
Kansk
Sayansk
Mirniy
Biysk Gorno-Altaisk
Balagansk
1. Data are converted using USD/RR forward exchange rates for Dec 31, 2013 (31.60) and Dec 31, 2014 (33.17) as of Feb 06, 2013
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Investor Day 2013
Part 3. Export
Alexander Medvedev Deputy Chairman of Gazprom Management Committee
CEO of Gazprom export
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2009 2010 2011 2012E 2012/11, %
Consumption (bcm) 565.2 609.8 556.0 542.9 (2.4)%
Indigenous production (bcm) 307.0 311.6 288.4 291.5 1.1%
Imports(1) (bcm) 258.2 298.2 267.6 251.5 (6.0)%
(10)%
(5)%
0%
5%
10%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
European Natural Gas Market Dynamics
Export - Investor Day 2013
European Gas Consumption and Imports in 2012
Source: International Energy Agency, Eurostat, Gazprom Export. Gas calorific value: 1cm = 37 MJ
Gas burned
for electricity
~ (11)%
Industrial
production
(2)%
Weather index
3%
Industrial Production Index on Key Markets
Source: National Statistics Authorities
Net Heating & Cooling Degree Days(2)
1. Including balance of gas storage
2. Relation to 12-year average
(15)
(10)
(5)
0
5
10
15
20
Jan-
11
Apr
-11
Jul-1
1
Sep
-11
Dec
-11
Mar
-12
May
-12
Aug
-12
Nov
-12
Germany UK Italy France Turkey
Source: Gazprom Export (based upon annualized HDD/CDD for Europe)
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100
200
300
400
500
600
700
800
900
20
09
20
10
20
11
20
12
20
13
20
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20
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20
35
Produstion consensus forecast Consumption consensus forecast
+110 bcma +115 bcma
Projected Gazprom European Market Share
Source: Consensus projections derived from consultants, companies and governmental bodies
Gazprom Sales in European and CIS Markets
Export - Investor Day 2013
2012
1. European countries including Turkey except for CIS and Baltics
2020F
30%
70%
Gazprom Other Suppliers
2030F
The Gap is Widening Between European Indigenous Production and Consumption
26%
74%
32%
68%
138.6 .150.0
138.8 151.8
2010 2011 2012E 2013F
Gazprom Gas Deliveries to Europe(1) Gazprom Gas Deliveries to CIS and Baltics
bcm
USD/mcm $302
$383
$402
68.0 71.1
64.4
74.8
2010 2011 2012E 2013F
$308 $298
$235
bcm
USD/mcm
bcm
Source: Gazprom estimates
22
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255,204,153
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102,163,224
Hubs Liquidity
Hybrid Pricing - Cornerstone of the European Market
Hubs in Continental Europe are not ready
to take over for oil-indexed contracts
A large portion of natural gas traded on
hubs comes from long-term oil-indexed
contracts
Hubs do not reflect total supply and
demand on the market
Long-term difference between hubs and
long-term contracts prices is combined
value of flexibility and security
TTF and even NBP have strong correlation
with Gazprom Prices (with coefficients of
0.79 and 0.75, respectively)
The Hybrid model, which has been in
existence for a number of years, fully
reflects the reality and needs of the
European market
Source: BMWi, Bloomberg
Differentials of Hub and Contract Prices
0
5
10
15
20
25
NBP (UK) Zeebrugge(Belgium)
TTF(Netherlands)
PSV (Italy) PEG (France) GASPOOL(Germany)
CEGH(Austria)
NCG(Germany)
2007 2008 2009 2010 2011 Q1-3 2012
Source: CERA based on data provided by TSOs
0
2
4
6
8
10
12
14
Jan-
08
Apr
-08
Jul-0
8
Oct
-08
Jan-
09
Apr
-09
Jul-0
9
Oct
-09
Jan-
10
Apr
-10
Jul-1
0
Oct
-10
Jan-
11
Apr
-11
Jul-1
1
Oct
-11
Jan-
12
Apr
-12
Jul-1
2
Oct
-12
Jan-
13
BAFA import price, Germany TTF (ENDEX), 1st month
USD per mmbtu
Export - Investor Day 2013
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European Regulators Policy in Gas Price Setting
Export - Investor Day 2013
Promotion of unfair competition
(“free-riding”)
Governments or regulators artificially setting spot
indexation
USD per mcm
Hub Prices
Contract Prices
National regulators
Importers End-users
Introduction
of spot
component in
end-user price
Obligation
to sell gas at
hub-based price
“Free riders” produce no gas and have no import contracts.
They do not pay full cost for gas storage and structuring
of deliveries
Low price
24
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Gas is the Best Fossil Fuel and the Cheapest Pathway
to Reach CO2 Reduction Targets in the EU
Export - Investor Day 2013
Cost Savings 2010-2030 (2010€)
‘Optimised’ pathways offer cost savings of about €500 billion in period
2010 to 2030 (under a high gas price scenario)
Even higher savings under low gas price scenario about €700 billion
Source: European Gas Advocacy Forum
1. High gas price scenario, 14 euro/mmbtu in 2030
2. Low gas price scenario, 9 euro/mmbtu in 2030
0
200
400
600
800
CPI fuel price/high gas price Low fossil fuels/low gas price
Transport Residential Power sector
€bn
(1) (2)
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Gazprom Group LNG
Fleet:
3 LNG Vessels
on charter
4 newbuilds on term
charters currently
under construction
(delivery in
2013-2014)
6 out of 7 vessels are
Ice Class - as of
today, Gazprom
Group controls the
largest Ice Class LNG
fleet in the world
Gazprom Group LNG Portfolio Diversification
Export - Investor Day 2013
up to 25
mtpa
Gazprom Group LNG portfolio origin
Loading sites
Gazprom Group LNG supply destinations
New Russian supply
30 + mtpa
Shipping Highlights
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Target markets
CNG light and medium duty vehicles
LNG heavy duty road transport
LNG bunkering
NGV markets
LNG bunkering
Demand expectations in Europe (2030)
CNG 14-27 bcm for light and heavy duty transport + buses
LNG 12-18 bcm for buses + heavy duty transport
LNG 9-11 bcm for bunkering
Aims to 2030 for Gazprom
10% share of the LNG for transport market
10% share of the developed CNG markets
25% share of the developing CNG markets
Russian production plants,
European SSLNG Hubs
Strategy in Small Scale LNG Market
Export - Investor Day 2013
Kalinigrad
Portovaya
NE-Europe
Hub
Dzhugba
NW-Europe
CNG 1-7 bcm
LNG 3-4 bcm
SE-Europe
CNG 3-5 bcm
LNG 3 bcm
LNG bunkering Mediterranean 3 bcm
Bunkering
3-4 bcm
NE-Europe
CNG 5-8 bcm
LNG 3-5 bcm
SW-E Hub
0.5 mtpa
3-4 bcm
SW-Europe
CNG 5-7 bcm
LNG 3-6 bcm
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Investor Day 2013
Part 4. Finance
Andrey Kruglov Deputy Chairman of Gazprom Management Committee
Head of the Department for Finance and Economics
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1. Converted using the annual average exchange rate as of the respecting period 2. Adjusted EBITDA is defined as operating profit before depreciation and changes in assets, impairment provision (impairment of accounts receivable and prepayments, assets under construction, investments and
other long-term assets, inventory) 3. Data are converted in USD using exchange rate as of the end of the respecting period 4. Net of custom duties and VAT 5. Excluding capitalized interest 6. Oil & Gas Majors are the top 10 oil and gas companies by market capitalization as of the beginning of 2013, excluding Gazprom
2010 2011 9m’11 9m’12 2012E
Total sales revenue(1)(4) USD bn 118.4 158.0 114.7 107.9 150
Adj. EBITDA(1)(2), USD bn 44.9 65.8 47.9 35.6 53
Adj. EBITDA margin 38% 42% 42% 33% 36%
Net income(1), USD bn 31.9 44.5 32.1 26.2 38
Total debt(3), USD bn 43.2 47.8 44.9 52.8 49.5
Free cash flow(1)(5), USD bn 13.7 2.9 0.1 0.9 1.0
KPI 2010 2011 2012E
Total reserves of natural gas, tcm ≥29 33.1 35.1 >35
Reserves replacement ratio ≥100% 124% 149% 118%
Debt to Capital ratio ≤40% 20% 17% 19%
T. Debt / Adj. EBITDA (LTM) ≤1.6x 1.0x 0.8x 0.9x
Volume of gas produced, bcm 509 513 487
Key operational and financial indicators
High profitability and stable operating cash flow assure robust dividend payout
15%
13%
15% 14%
10% 9%
5%
10%
15%
Revenue EBITDA Net income
CAGR of Gazprom for 2006-2011 CAGR of oil & gas majors’ on average for 2006-2011
Comparative 5Y CAGR
20 23
41
28
48 56
0
20
40
60
80
2006 2007 2008 2009 2010 2011
Operating cash flow(1)
USD bn
Strong Financials: Potential for Future Growth
Finance - Investor Day 2013
(6)
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217 201 206
217 211
106 114 130
150 166
50
100
150
200
250
2012E 2013F 2014F 2015F 2016F
Export netback parity Prices for industrial consumers
Growth of domestic gas transportation tariff Domestic market liberalization
Gas sales to Russian market(1) Structure of Gazprom’s gas sales revenue(1), 2012E
USD/mcm
1. Net-back parity price is calculated based on Company’s export gas prices estimates
0
10
20
30
40
50
60
70
2006 2007 2008 2009 2010 2011 2012 2013F 2014F
+18% +21%
+22% +15.7%
+22.9% +9.3% +3.5% +8.5% +6.7%
RR/ 1000 cm/100km
RR/mcm
(1)
bcm; RR bn
Revenue growth due to price increase and volume recovery
51%
26%
24%
Europe
FSU Countries
Russia 292 274 277 281 266
479 503
637 739
800 1,641 1,840
2,297 2,632
3,005
- 500 1,000 1,500 2,000 2,500 3,000 3,500
100
300
500
700
900
2008 2009 2010 2011 2012E
Domestic Market Volumes (bcm) Revenue (RR bn)
Domestic Average Price (RR/mcm)
Development of Russian Gas Market
Finance - Investor Day 2013
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381.5 385.5 427.0 485.9
566.3
147.0 147.0
237.0
509.0
602.0
+ 1% +11% + 14%
+17%
0
200
400
600
800
1,000
1,200
2009 2010 2011 2012E 2013F
Mineral Extraction Tax (MET)
Unit cost of gas production
Growth rate of unit cost of gas production
Comprehensive Cost Optimization Plan for 2013 — RR 50 bn savings
1. Unit cost of gas production per 1000 cm of sale gas among 7 majors Gazprom ‘s subsidiaries. Excludes cost of OAO Gazprom 2. Unit cost of gas transportation includes cost per1000 cm of gas transported 100 km by Gazprom’s gas transportation subsidiaries. Excludes cost of OAO Gazprom
RR/1000 cm
38.6 40.2 43.0 47.4
50.5
+4 % +7 %
+10% +7 %
0
10
20
30
40
50
60
2009 2010 2011 2012E 2013F
Unit cost of gas transportation
Growth rate of unit cost of gas transportation
Cost of gas transportation(2)
994.9
1,168.3
Cost of gas production(1)
RR/ 1000 cm/100km
Reduction and rigid control over investment, operational and administrative costs
Effective Cost Management
Finance - Investor Day 2013
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1. Data are converted in USD using exchange rate USD 1 = 30.36 RR in 2010; USD 1 = 28.3 RR in 2011, USD 1 = 31.07 RR in 2012, and Gazprom’s budget exchange rate forecast for 2013 (USD 1 = 29.70RR in 2013)
0
10
20
30
40
50
60
2010 2011 2012E 2013F
34 USD bn
44 USD bn
53 USD bn
USD bn
Transportation Production Other segments
(Including gas storage,
gas processing and
gas distribution)
Power & heat
generation Gazprom Neft
Gazprom Group cash CAPEX breakdown(1) 2013 top priorities in gas business
40 USD bn
Timely CAPEX revision gives Gazprom flexibility for optimal resource allocation
Balanced CAPEX
Finance - Investor Day 2013
Transportation CAPEX , USD bn 2012 2013
Bovanenkovo-Ukhta gas pipeline 6.5 3.5
Ukhta-Torzhok gas pipeline 3.4 0.7
Gryazovets-Vyborg twin gas pipeline 2.1 0.5
Kirinskoye onshore processing facility to Sakhalin
CS gas pipeline 0.6 0.4
GTS extension and reconstruction - Southern
Corridor 0.3 3.1
Long-term financial investments for the
construction of the South Stream pipeline outside
Russia
0.2 0.5
Long-term financial investments for the
construction of the Nord Stream pipeline 0.1 —
Sakhalin-Khabarosk-Vladivostok pipeline 1.0 —
Production CAPEX, USD bn 2012 2013
Bovanenkovo field 2.9 2.0
Medvezhye, Urengoyskoye, Yamburgskoye
fields 1.2 1.2
Kirinskoye field 0.6 1.2
Zapolyarnoye field 0.3 0.1
Yubileynoye field 0.2 0.1
Field development projects abroad 0.2 0.5
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02/2
002
02/2
003
02/2
004
02/2
005
02/2
006
02/2
007
02/2
008
02/2
009
02/2
010
02/2
011
02/2
012
02/2
013
S&P Moody's Fitch Investment grade
Total and net debt(1)
Cost of debt financing
1. Data are converted in USD using exchange rate USD 1 = 30.24 RR at the end of 2009, USD 1 = 30.48 RR at the end of 2010, USD 1 = 32.2 at the end of 2011, USD 1 = 30.9 at the end of 9m2012, USD 1 = 31.07 RR in 2012, and Gazprom’s budget exchange rate forecast for 2013 (USD 1 = 29.70RR in 2013)
2. Excluding promissory notes
%
26% 15% 24% 24%
10% 13%
17% 17%
33% 42% 38% 33%
31% 31% 21% 27%
2009 2010 2011 3Q2012
Less than 1 year 1-2 years 2-5 years More than 5 years
Debt maturity profile(2)
53.8
43.2 47.8 52.8
Gazprom credit ratings
We maintain conservative debt ratios
Impeccable Credit History
Finance - Investor Day 2013
Moody’s
A3
Baa1
Baa2
Baa3
Ba1
Ba2
Ba3
B1
S&P,
Fitch
AAA-
BBB+
BBB
BBB-
BB+
BB
BB-
B+
1
3
5
7
9
2004 2005 2006 2007 2008 2009 2010 2011 2012E 2013F
Weighted average fixed interest rateWeighted average floating interest rateWeighted average interest rate
45.4 28.6 32.1 37.4
8.4 14.6 15.7 15.4
49.5
1.5
1.0 0.8
1.0 0.9
0
0.5
1
1.5
0
20
40
60
80
100
120
2009 2010 2011 9m2012 2012E
Net debt Cash and equivalents Total debt/adj.EBITDA LTM
USD bn times
1.5
1
0.5
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Significant improvement of corporate governance over the past year
English versions of documents uploaded
Code of Corporate Ethics is approved
– Principles of the Code are being introduced
across Gazprom’s subsidiaries (100+
entities)
Corporate documents are now available on the
website in English
Regulation on Access to Insider Information and
its Protection is approved
– Insider dealing compliance division is
appointed
The minimum period for providing shareholders
with an AGM information package is extended
from 20 to 30 days prior to the meeting
Code of Corporate ethics approved
www.gazprom.com
www.gazprom.com www.gazprom.com
www.gazprom.com
Corporate Governance
Finance - Investor Day 2013
34
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Dividend payouts have been approved at the level of 25% of net income (RAS)(1)
A switch to dividend payout based on consolidated net income under IFRS is under consideration
1. Company operating data estimates 2. Dividend yield is calculated using share prices as of February 1st 2013
0.36
2.39
3.85
8.97
7 – 8
8 – 9
0
2
4
6
8
10
2008 2009 2010 2011 2012E 2013F
Dividend Per Share(1) Dividend Yield(1)
RR
0.3%
1.3%
2.0%
5.2% 5-5.6%
5.6-6%
0%
1%
2%
3%
4%
5%
6%
7%
2008 2009 2010 2011 2012E 2013F
Increase of Dividend Payouts up to 25% of Net Income
Finance - Investor Day 2013
Strong commitment to return cash to shareholders
(2)
(2)
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Gazification of regions Social and cultural support projects Gazprom for
children
Emissions Reduction Program 2013 – Year of Ecology Energy saving Program
Social and environmental activities provide for sustainable long-term development of Gazprom and Russia
Social and Environmental Responsibility
Finance - Investor Day 2013
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Our underlying fundamentals point to the potential we offer as an investment
15%
3%
14%
2%
0%
5%
10%
15%
2006-2011 2012E-2015E
Gazprom Oil & Gas Majors
1. Oil & Gas Majors are the top 10 oil and gas companies by market capitalization as of the beginning of 2013,excluding Gazprom 2. Average 1-year forward multiples
Revenue CAGR, %(1) ROE, %(1)
Source: Companies data, FactSet
19%
15%
18% 16%
0%
5%
10%
15%
20%
2011 2013E
Gazprom Oil & Gas Majors
Source: FactSet
EV/Reserves P/E multiple(1)(2) EV/EBITDA multiple(1)(2)
Source: Companies data, FactSet, Wood Mackenzie Source: Companies data , FactSet
8.0x
2.7x
5.0x 4.4x
0.0x
3.0x
6.0x
9.0x
12.0x
2006 2012E
Gazprom Oil & Gas Majors
Gazprom: Safe Investment
Finance - Investor Day 2013
12.5x 11.3x
8.3x 7.7x 6.9x 6.4x 5.5x 5.0x
1.4x
0.0x
3.0x
6.0x
9.0x
12.0x
15.0x15.0x
12.0x
9.0x
6.0x
3.0x
0.0x
11.8x
3.1x
10.2x 7.9x
0.0x
5.0x
10.0x
15.0x
20.0x
2006 2012E
Gazprom Oil & Gas Majors
15.0x
20.0x
10.0x
5.0x
0.0x
12.0x
9.0x
6.0x
3.0x
0.0x
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Our Value Drivers
Finance - Investor Day 2013
Unparalleled Fundamentals
Sound Strategy & Strong
Market Position
Improving Corporate
Governance
Conservative Financial Policy
18% of global gas reserves
72% of Russian gas reserves
>115% reserve replacement ratio
15% of global gas production
77% of Russian gas production
Focus on shareholders value
Solid dividend policy
Improvement of CG Codes
Commitment to sustainable
development
Natural gas is the future of world
energy
Gazprom is the global energy major:
Over 70% share in the Russian gas
market
27% share in the European gas
market
Diversification of products and export
markets is key to our business
continuity
Impressive profitability
Sensible CAPEX management
Efficient system of OPEX
management
Strong liquidity ratios
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OLEG NAGOVITSYN
Deputy Head of Corporate Finance Directorate
Phone: (007) (495) 719-26-25
E-mail: [email protected]
ANDREY BARANOV
Investor Relations
Phone: (007) (495) 719-25-89
E-mail: [email protected]
Contacts for Investors
Investor Day 2013
Department for Finance & Economics
Corporate Finance Directorate
Fax: (007) (495) 719-35-41
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Part 5. Gazprom Neft
Investor Day 2013
Alexei Yankevich Member of the Management Board
Deputy CEO for Economics and Finance of Gazprom Neft
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Gazprom Neft - Investor Day 2013
This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Gazprom Neft and its consolidated subsidiaries. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements.
Forward-looking statements include, among other things, statements concerning the potential exposure of Gazprom Neft to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘probably’’, ‘‘project’’, ‘‘will’’, ‘‘seek’’, ‘‘target’’, ‘‘risks’’, ‘‘goals’’, ‘‘should’’ and similar terms and phrases. There are a number of factors that could affect the future operations of Gazprom Neft and could cause those results to differ materially from those expressed in the forward-looking statements included in this presentation, inclusively (without limitation): (a) price fluctuations in crude oil and oil products; (b) changes in demand for the Company’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserve estimates; (f) loss of market and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) economic and financial market conditions in various countries and regions; (j) political risks, project delay or advancement, approvals and cost estimates; and (k) changes in trading conditions.
All forward-looking statements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on these forward-looking statements. Each forward-looking statement speaks only as of the date of this presentation. Neither Gazprom Neft nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information.
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Investor Day Summary
Gazprom Neft - Investor Day 2013
Record Financial & Operating Results
Gazprom Oil Licenses Transfer on Track
Technological Progress
Certainty on Major Tax Breaks
Refineries Well Positioned for Upgrade
Domestic Market Outstanding Growth
New Phase for Greenfield Development
Investments Nearing Peak
Dividends remain at 22%IFRS payout
Net Debt / EBITDA not to exceed 1.5X
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40.0
37.9 40.5 43.3
30.0
0
10
20
30
40
50
60
70
80
2010 2011 2012 2020
Operational CAGR Growth Justifies Strategic Targets
1,130
1,200
58
128 0
1,000
1,050
1,100
1,150
1,200
1,250
YE2011 Groupproduction
Revisions Acquisitions* YE2012
Changes in PRMS (SPE) proved reserves, mmtoe
221% Reserves replacement ratio
Hydrocarbon Production, mmtoe
CAGR
+7%
Refining, mmt Optional
growth outside
Russia
Premium Channel Sales, mmt
1. Acquisitions include reserves of Novoport and Baleykinsky fields
14.2
19.5
22.9
40.0
0
5
10
15
20
25
30
35
40
45
2010 2011 2012 2020
52.8 57.3 59.7
100.0
0
20
40
60
80
100
120
2010 2011 2012 2020
Gazprom Neft - Investor Day 2013
Acquisitions(1)
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3,151
5,457 5,682
0
1,000
2,000
3,000
4,000
5,000
6,000
2010 2011 2012
7,271
10,211 10,407
0
2,000
4,000
6,000
8,000
10,000
12,000
2010 2011 2012
Strong Financial Results Continue Growth Trend
Gazprom Neft - Investor Day 2013
Revenue(1), USD mm Adj. EBITDA(2), USD mm
Net Income, USD mm Net Debt / EBITDA
1. Until January 2012 Gazprom Neft reported in USD under US GAAP. Gazprom Neft now reports in RR under IFRS. Due to the change in accounting standards, revenues for 2011 and 2012 are represented net of export
duties. Revenue for 2010 is represented as revenue minus export duties and excise of NIS under US GAAP.
2. EBITDA includes share of affiliates’ EBITDA
Note: The presentation currency for Gazprom neft is the Russian Ruble. For purposes of this presentation data for periods 2011/2012 were converted at average exchange rates 29.39 RR / USD in Y2011 and 31.09 RR /
USD in Y2012, accordingly.
25,542
35,042
39,567
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2010 2011 2012
0.82
0.71
0.53
0.00
0.30
0.60
0.90
2010 2011 2012
0.90
0.60
0.30
0.00
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
1.7 1.0
(5.9 )
(15.6 ) (18.0)
(16.0)
(14.0)
(12.0)
(10.0)
(8.0)
(6.0)
(4.0)
(2.0)
0.0
2.0
4.0
Gazprom Neft TNK-BP Lukoil Rosneft
Operational and Financial Efficiency Backed by Industry-Leading Growth
EBITDA/boe, USD/boe Adj. EBITDA absolute 9M12 Y-o-Y Growth, %
ROACE, % Production & Refining 9M12 Y-o-Y Growth, %
Source: MD&A of Companies and INFOTEK
34.3 30.8
27.4
21.9
32.1 29.4
22.6 21.1
0
5
10
15
20
25
30
35
40
Gazprom Neft Lukoil Rosneft TNK-BP9M11 9M12
37.8
22.1
17.8 13.7
34.1
20.6
11.8 10.6
0
5
10
15
20
25
30
35
40
TNK-BP Gazprom Neft Rosneft Lukoil
9M11 9M12
4.8 3.8 3.6
0.3
5.9 8.6
(12.1)
3.6
(15.0)
(10.0)
(5.0)
0.0
5.0
10.0
Gazprom Neft Rosneft TNK-BP Lukoil
Production Refining
Gazprom Neft - Investor Day 2013
45
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255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
2020 Strategy
Gazprom Neft - Investor Day 2013
2020
19.5 mmt
40 mmt
Premium sales:
40 mmt
2020
40.5 mmt
70 mmt
Refining:
70 mmt
57.3 mmtoe
100 mmtoe
Production:
100 mmtoe
Reserves / production ratio – 20 years
Share of greenfields in total production
> 50%
Share of international project in total
production – 10%
2011 2020 2011 2011
In Russia – up to 40 mmt
International – up to 30 mmt
Depth of refining in Russia – 90%
Light product yield in Russia – 77%
12 mmt – Retail sales
8.2 – In Russia
18 mmt – Premium sales
10 mmt – Small wholesale sales
46
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255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
60
100
0
20
40
60
80
100
120
2012 2020
Upstream Strategy
Gazprom Neft - Investor Day 2013
Hydrocarbon production:
Curent vs. 2020 Target, mmtoe
...
Technology
Assets
Macro environment
47
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Upstream Growth Opportunities in Russia
Gazprom Neft - Investor Day 2013
Orenburg region: an example of successful regional expansion
SeverEnergia
Messoyakha
Novoportovskoe
Prirazlomnoye
Dolginskoye
Chonskiy project Recoverable reserves (C1+C2),
Jan 1, 2012
Crude oil, 130 mmt
Gas, 1,643 bcm
Interest of GPN: 100%
Kuyumba Recoverable reserves (C1+C2),
Jan 1, 2012
Crude oil, 473 mmt
Gas, 246 bcm
Condensate, 25 mmt
Interest of GPN: 50%
North of YNAO
Arctic Shelf
East Siberia
Traditional and new production centers in Russia
Traditional production centers
New growth opportunities
Autumn 2011 – Control over the Eastern part
of the Orenburg field acquired
Autumn 2011 – Tsarichanskoye and
Kapitonovskoye fields acquired
Autumn 2012 – Baleykinskoye field acquired
Production in Orenburg regions
exceeded 2 mmtoe in 2012
Within five years production is
targeted to amount 6 mmtoe
48
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255,102,000
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North of YANAO
Gazprom Neft - Investor Day 2013
SeverEnergia
Recoverable reserves (C1+C2),
Jan 1, 2012 Crude oil, 1,309 mmt
Gas, 145 bcm
Condensate, 129 mmt
Interest of GPN: 25.5%
Status: 1 train of GPF Samburg launched
Active works on 21 wells (assembling of five
drilling rigs, drilling of ten wells and
production testing of six wells)
Continued construction of second train of
gas processing facility
Messoykha Novoportovskoye
Recoverable reserves (C1+C2),
Jan 1, 2012 Crude oil, 233 mmt
Gas, 274 bcm
Condensate, 19 mmt
Interest of GPN: 90%
Status: 4 exploration wells tested. Results
significantly exceed expectations.
Construction tank battery started
Launched 2 wells (1 in testing, 1 in drilling).
The contractor for the Arctic terminal
construction approved
Recoverable reserves (C1+C2),
Jan 1, 2012 Crude oil, 622 mmt
Gas, 219 bcm
Condensate, 9 mmt
Interest of GPN: 50%
Status: Began test production
Continued pilot project of production well
drilling
In progress the design and survey work of
field facilities
49
0,051,102
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255,102,000
255,204,000
255,204,153
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102,163,224
Arctic Shelf
Gazprom Neft - Investor Day 2013
Key results for 2012
Prepared project documentation for construction of 3-SD exploration well Completed complex
engineering surveys at drilling area
Completed HAZID session, HAZOP in process
Continued preparation to 3-SD exploration well drilling (selection of jack-up rig, supply vessels,
tender process for outsourcing services, etc.)
Plans for 2013
Contracting for self-elevating floating drilling rig, HAZOP supply vessels
Contracting of services
Start of project documentation preparation for 4-SD exploration well
Start of self-elevating floating drilling rig and supply vessels mobilization
Start of 3-SD exploration well drilling
Complex engineering surveys at 4-SD well and project documentation
Completion of 3-SD exploration well works and drilling results
Key results for 2012
Project audit completed
Project appraisal under way
Plans for 2013
Platform completion, pre-commissioning, HAZOP, platform diverter assembly
Offshore ice-resistant fixed platform launch
Production start-up
First 3 wells drilling results
Prirazlomnoye
Dolginskoye
50
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255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Gazprom Neft Sever Energia Orenburg Novoport Prirazlomnoye(1) Dolginskoye(1) Gazprom Neft + Gazpromoil licences
Gazprom Oil License Transfer on Track
Gazprom Neft - Investor Day 2013
Outstanding Oil license transfers
178 mmtoe ABC1+1/2C2
Reserves
License transfers complete
1,366 mmtoe ABC1 Reserves
1. ABC1+1/2C2 reserves
(1) (1)
51
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255,102,000
255,204,000
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International Growth in Four Regions
Gazprom Neft - Investor Day 2013
Iraq (Badra)
Reserves (mm tonnes)
Geological – 410
Start production: 2013
Status:
11 production well pads
constructed
3D seismic obtained and
interpreted
Reserves (bn tonnes)
Geological – 7.2
Recoverable – 1.8
Interest of GPN: 8%
Status:
Test production, 2 wells drilled
Construction 3 production well
pads
Kurdistan
Reserves (bn tonnes)
Geological – 1.5
Start production: 2014
Interest of GPN:
Block Garmian - 40%, Block Shakal – 80%
Status:
2D seismic
Drilled 3 exploration wells
Balkans
Latin America
West Africa
North Africa
Middle East
South-East Asia
North-Western Europe
Current production regions
Regions for further exploration
Potential targets
Venezuela (Junin-6)
52
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30
150
0
40
80
120
160
Technology-Driven Production Growth
Gazprom Neft - Investor Day 2013
Key technology projects
High-density seismic studies
Horizontal wells with multi-stage hydrofracturing and multilateral well technologies
Center for geological assistance to drilling
Development of high-viscosity oil in gas-caped layers
Arctic shelf and on shore production technology
Smart field technology to improve ultimate recovery and production rate
Energy efficiency programs
1. Developing hard-to-recover reserves and improving current asset production Effective:
Development of additional 500 mmt of low-production
reserves
Securing profitability at the new fields
Base production decline slowed by 10%
Production increase by 30%
Intelligent (selective) completion
Well reconstruction (side-tracks) by coiled tubing unit
Implying new types of oil-cut muds
Geosteering with the innovative logging equipment while drilling
Multilateral well drilling
Horizontal wells with multi-stage hydrofrac
Multi-stage hydrofracs, wells Horizontal drilling, wells Cumulative production for 3 years,
ths. tonnes
Vertical well with
hydrofrac
Horizontal well with
multistage hydrofrac
The most effective New technologies: from field test to industrial scale
1
35
89
0
20
40
60
80
100
2011 2012 2013
27
81
121
0
40
80
120
160
2011 2012 2013
Key technology projects
53
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255,102,000
255,204,000
255,204,153
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102,163,224
Technology-Driven Production Growth
Gazprom Neft - Investor Day 2013
2. EOR technology Effective:
ASP flooding technology
In-situ controlled burning technology
Steam, CO2 injection and miscible drive
Tight oil extraction technology
Additional 170 mmt production potential due to recovery
enhancement
Development of additional 150 mmt of reserves
Chemical flooding technique of Alkaline-Surfactant-Polymer (ASP) The ASP flooding technique is the one of the most promising enhanced oil recovery methods for mature fields
The ASP field pilot will be undertaken at the West-Salym field in 2010-2016
Key technology projects
Chemicals
Pump
Injection well
Producer well
Crude oil
Oil release by alcaline+
surfactant
Full displacement by
polymer solution
Water displacement of
chemicals
Additionally
released oil
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Tax Breaks for New Upstream Projects
Gazprom Neft - Investor Day 2013
Dolginskoye and
Prirazlomnoye(3)
Yamal peninsula in YANAO: Novoport
North of 65° n.l. in YANAO: Messoyakha
Irkutsk Region: Chonskiy (Vakunaiskoye, Ignyalinskoye)
Sakha Republic (Yakutia): Timpuchikanskoye
Krasnoyarsk Krai: Kuyumba, Tersko-Kamovskiy
Continental shelf : Prirazlomnoye
Unified methodology for granting tax breaks for new projects(1) (takes effect from April 1, 2013)
Offshore Projects(2)
Tight Oil(4) Kraineye, Vingayakhinskoye
and Sutorminskoye fields
Tax holidays extension for East Siberia(5) Kuyumba, Tersko-Kamovskiy
and Timpuchikanskoye fields
Conditions:
Reserves depletion rate < 5%
Initial recoverable crude oil reserves ≥10 mmt (if applied before 31.12.2013) or ≥ 5 mmt (if applied after 31.12.2013)
Segregated metering for crude oil produced at field
Term of the break is set so the project would achieve 16.3% IRR over its lifetime
Reduced export duty = 45% × (Urals-365USD/Tonne)
Decree assumes introduction of tax breaks for:
MET for 5-15 years according to complexity of a project
Export duty (0%)
Bill assumes introduction of new coefficients “Кд” and “Кдв” for MET formula:
Oil MET = 470 × Кц× Кв × Кз × Кд × Кдв
Кд (0; 0.2; 0.4; 1) – depending on reservoir category for 10 - 15 years
Кдв (for depleted reservoirs similarly to “Кв” for depleted deposits)
Bill introduced to Duma proposes prolongation of zero MET for production volumes up to 25 mmt up to December 31,
2021 in case the following provisions are met:
License issued before January 1, 2007
Reserves depletion rate as of January 1, 2013 is < 5%
Sakha Republic (Yakutia), Irkutsk Region, Krasnoyarsk Krai
1. Federal law as of 03.12.2012 № 273-FZ «About introduction of alterations to the Law of Russian Federation «About Customs Tariff» 2. Decree of the Government of Russian Federation №443-р as of April 12, 2012 3. In case that the 2016 and onwards production start-up condition to use the tax break will be omitted 4. Decree of the Government of Russian Federation №700-р as of May 03, 2012 5. Project for Federal Law № 163349-6 «About introduction of alterations to article 342 section two of the Tax Code of Russian Federation»
Property tax
VAT and import duty for equipment
Adopted
Expected
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
2012 20152012 2015
Focus on Quality Driving Modernization Projects in 2013
Gazprom Neft - Investor Day 2013
Generate additional margin from higher-quality
product sales
Benefits from lowered excise rates on higher-
class fuels
Improve environmental characteristics (quality
classes) to comply with technical regulations
Improve quality of consumer products (increase
octane value, introduce winter-grade diesel)
primarily completed by 2013
Quality improvement program
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Quality of motor fuels
Gasoline, mmt Diesel fuel, mmt
Below
Class 4
Class 4
Class 5
Below
Class 4
Class 4
Class 5
9.0 8.6 11.5 11.2
56
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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
Stable Growth for Light Product Demand in Russia, with Minimal Decline for Heavy Products
Gasoline consumption forecast, mmt Diesel consumption forecast, mmt
Jet fuel consumption forecast, mmt Fuel oil consumption forecast, mmt
Source: EIU; Global Insights; Economic Development Ministry; Ministry of Agriculture; Federal State Statistics Service
Gazprom Neft - Investor Day 2013
0
10
20
30
40
50
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
0
10
20
30
40
50
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
0
5
10
15
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
0
5
10
15
20
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Annual growth rate
= 2.7%
Annual growth rate
= 2.7%
Annual growth rate
= 4.0%
Annual decline rate
= 0.7%
1234722-001
57
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153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
20 14 2
17 16
15
3 3
4
29 31
38
7 8
12
2 1
22 27 29
2013 2017 2020
Conversion Investments will Result in Additional 8 mmt/y of Light Products
Gazprom Neft - Investor Day 2013
Increase in light product yields
Increase of refining depth
Conversion rate increase program
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
primarily completed by 2017
Diesel
Lubricants Other
(Coke, Bitumen,
Heating oil)
Fuel oil
Naphtha
Gasoline
Jet fuel
Petroleum products structure, % 100 100 100
2013 2017 2020
Light Products Yield, % 61.3 67.1 80.6
Conversion Rate, % 79.2 82.5 94.2
Petroleum Products Output, mmt 36.5 36.7 37.9
ONPZ
YANOS
Hydrocracking unit
Coking unit
Coking unit
FCC unit
-1/1 (stage 1)
С-001, С-200
FCC unit
-1/1 (stage 2) С-100, С-
300
Hydrocracking and Flexicoking
units
FCC unit
(Г-43/107)
FCC unit
(1А/1М)
Hydrocracking unit
2010 Jan 2013 2015 2017 2020
MNPZ
YANOS
58
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255,102,000
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Strategic Summary
Gazprom Neft - Investor Day 2013
Upstream Downstream
Assets
Gazprom license transfer
M&A
Technology
Technology testing
Macro environment
Certainty with major tax breaks
Full-scale development start-up
2007
-201
2 20
13-2
015 Fast refinery
modernization
Growing market
High margins
Future tax changes
59
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4.3
10.2
4.8
2.1
1.9
23.3
CAPEX and Investments Support Strategic Goals
Gazprom Neft - Investor Day 2013
2013-2015
CAPEX outlook 2013-2015, USD bn
Upstream
brownfield
Upstream
greenfield(1)
Refining
Marketing&
distribution
Other
Badrah Novoport
Messoyakha Orenburg
Omsk Moscow Moscow
Junin 6
Retail Avia Bunkering Lubricants
Kuymba
1. Including investments in JV projects
Noyabrsk Vostok Zapolyarneft
44% of three-year cycle capex will be spent on new upstream
projects
21% will be invested in refinery upgrade
Remaining investment will focus on expanding marketing segment
and business improvement projects
1.6 1.4 1.5 1.4
1.7 3.2
3.8 3.2
1.2
0.9
1.5
1.3 0.7
0.8
0.7
0.6
0.3
0.4
0.8
0.8
0.5
0.8 6.1
7.4
8.3
7.3
0
1
2
3
4
5
6
7
8
9
2012 2013 2014 2015
Upstream brownfield Upstream greenfield(1)
Refining Marketing and distribution
Other M&A
(1)
60
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255,102,000
255,204,000
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102,163,224
22% Payout Ratio is Expected 2013 and Onwards
Gazprom Neft - Investor Day 2013
Dividends, 2009- 2011
The expected amount of annual dividends for 2012 is 22% of IFRS Net Income
Considering the payment of 6-month interim dividends
Considering the incorporating of independent directors to the Gazprom Neft Board
of Directors
605
693
1,177
3.57
4.44
7.3
0
2
4
6
8
10
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2009 2010 2011 2012 2013 2014 2015
Dividends, USD mln
Dividend per share, RUB
61
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153,051,000
255,102,000
255,204,000
255,204,153
191,191,191
102,163,224
Gazprom Neft - Investor Day 2013
Alexey Kokorev
Head of Corporate Finance Department
Phone: (007) (812) 648-3117
E-mail: [email protected]
Anna Sidorkina
Head of Investor Relations
Phone: (007) (812) 385-9548
E-mail: [email protected]
Department of Corporate Finance
Investor Relations
Tel: (007) (812) 385-9548
Contacts for Investors
62
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Part 6. Gazprom Power Generation
Investor Day 2013
Denis Fedorov Head of Gazprom Directorate for Development of Power Generation
Sector and Power Generation Marketing
General Director of Gazprom Energoholding
63
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The information contained herein has been prepared using information available to Gazprom Energoholding (or the Group) at the
time of preparation of the presentation. External or other factors may have impacted on the business of Gazprom Energoholding
and the content of this presentation, since its preparation. In addition all relevant information about Gazprom Energoholding may
not be included in this presentation. No representation or warranty, expressed or implied, is made as to the accuracy,
completeness or reliability of the information.
Any forward looking information herein has been prepared on the basis of a number of assumptions which may prove to be
incorrect. Forward looking statements, by the nature, involve risk and uncertainty and Gazprom Energoholding cautions that actual
results may differ materially from those expressed or implied in such statements. Reference should be made to the most recent
Annual Reports of OJSC “Mosenergo”, OJSC “TGC-1” and OJSC “OGK-2” for a description of the major risk factors.
This presentation does not constitute or form part of any advertisement of securities, any offer or invitation to sell or issue or any
solicitation of any offer to purchase or subscribe for, any shares in OJSC “Mosenergo”, OJSC “TGC-1” and OJSC “OGK-2”, 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.
Disclaimer
64
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38
37
34
25
20
GEH
RusHydro
Inter RAO
Rosatom
EuroSibEnergo
1,140
1,060
1,032
226
223
212
China
US
EU
Japan
Russia
India
Russia - world’s #5 electricity market
by installed capacity-2012, GW
#5
24 23
30 33 32
16 16 19
23 22
2008 2009 2010 2011 2012
Power generation Electric grids
26%
22%
65%
52%
57%
35%
22%
21%
TPP
HPP
NPP
< 30 years 31-50 years > 50 years
Industry revenue
2008-2012,
USD bn
Power
units
ageing
Russian Power Sector
Introduction to Russian Power Sector
Top-5 Russian
players by
installed
capacity, GW
Over $40 bn private investment in industry
since 2006
100% liberalized electricity market
CSA agreements guaranteeing 14% IRR
on investments
Russian market highlights
Gazprom Power Generation - Investor Day 2013
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Russian Electricity Market Evolution [1/2]: Structuring and Liberalization
Expected changes in
industry structure
Introduction of old power plants
modernization model
Introduction of direct billing
systems
Elimination of forced Electricity
generation(1)
Heat tariff increase making
heat generation economically
feasible
Further capacity market
liberalization
Priority for co-generation
development in big cities
Further reforms are expected
to make investments in Heat
generation profitable and
eliminate outdated capacities
Current market model
Electricity and Heat generation (14 TGK’s and 5 OGK’s)
Regulated
Heat market
Consumers
Wholesale
Electricity and
Capacity market
Wholesale
buyers
Russian Grids
(state-owned monopoly)
Heat Grids
(private and
TGK/OGK affiliated)
Old market model
Regulated
tariffs
RAO UES
(generation and grids)
Consumers
Until 2007 Russian electricity
and heat markets were 100%
monopolized
1. Some lossmaking power plants are forced to be maintained by the regulator
Gazprom Power Generation - Investor Day 2013
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Russian Electricity Market Evolution [2/2]:
Developments
Totally competitive market provides
advantages for the most efficient
generators
Guaranteed pay-back of
investments in the CSA projects
Higher margin for the efficient
investors
Non-lossmaking conditions for “old
capacity”
Mechanisms were developed to
create competitive environment in
the market since January 1, 2014
Ele
ctri
city
mar
ket
Electricity
Capacity
Heat
100% Liberalization of industrial consumers electricity
market (gradual liberalization in 2007-2011)
CSA mechanism stimulating investments in the new
capacity in regions experiencing energy shortage,
providing investments pay-back
Competitive capacity outtake mechanism providing
higher margin for efficient producers
Special tariffs for non-competitive producers
Liberalization in progress
Legal framework of the economic relations in the heat
market was determined (Law on heat supply)
In 2012 framework of pricing in the market and stages
of its implementation were determined
1
2
3
1
2
3
1
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Installed electric capacity 7.3 GW
Installed heat capacity 14.9 thous. GCal/h
Market capitalization USD 0.94 bn(4)
Free-float 22.6%
Installed electric capacity 18.4 GW
Installed heat capacity 4.5 thous. Gcal/h
Market capitalization USD 0.78 bn(4)
Free-float 22.7%(5)
136
82 70
49 45 40 38 38 37 34
EdF
Ene
l
E.O
N
RW
E
GdF
Sue
z
End
essa
Vat
tenf
all
GE
H
Rus
Hyd
ro
Inte
r R
AO
Gazprom Energoholding Profile
Installed electric capacity 12.3 GW
Installed heat capacity 35.1 thous. GCal/h
Market capitalization USD 2.05 bn(4)
Free-float 15%
Top 10 European generators by Installed
Capacity, GW, 31.12.2011
Installed Capacity in Russia, %,
31.12.2012(1)
53.5% 51.8% 77.3%(5)
Moscow Region
(3) (2)
GEH, 17%
Others, 83%
1. Source for total installed capacity in Russia (223 GW) – System operator`s data (31.12.2012) 2. GdF Suez installed capacity for Europe region 3. As of 31.12.2012, including Adlerskaya TPP
4. As of 05.02.2013 5. With account of realization of the preemptive right within the frame of the additional issue
Hydropower station
Heat station
Murmansk region
Karelia region
Saint Petersburg region
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10.4 3.8
14.6
9.8
21.0
2008 2012E
2% 11%
Gazprom Energoholding Development, 5-year IFRS Results
New Capacity Share in the Total Electricity
Production, %
2008 2012
Total 36 GW Total 38 GW
Gazprom Energoholding Rest of Russia
93.4 104.2
33.6 65.1
94.8
156.0
2008 2012E
Sales (IFRS), RR bn
221.8
+ 46.7 %
325.3
EBITDA (IFRS), RR bn
14.5
46.0
+ 217.3 %
1. Including Murmanskaya CHP 2. For 2008 data is restated as the sum OGK-2 and OGK-6 data
0.9
826.9 887.3
179.9 166.6
2008 2012E
1,006.8 1,053.9
Electricity Output Dynamics in Russia, bn kWh
Mosenergo
TGC-1(1)
OGK-2(2)
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Increased capacity tariffs High profitability
New capacities, 11%
Old capacities, 89%
New capacities, 20%
Old capacities, 80%
Capacity distribution EBITDA distribution
499
118
CSA capacity tariffRegular capacity tariff
GEH plans to commission
extra 3.5GW of CSA
capacities by 2016
(+9% to existing GEH
capacity)
GEH investment program, MW
122 700
2,250
520
2013 2014 2015 2016
1000 RR for 1MW/month
New capacities are
expected to increase
EBITDA by ~20%
(in current prices)
2013-2016 potential
11% of capacity
generates ~20% of
EBITDA
Gazprom Energoholding Investments:
High Profitability and Guaranteed Returns
Over 90% of GEH investment program is guaranteed by the CSA agreements implying 14% IRR guaranteed by the
government
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The company has solid
potential which is
mostly constrained by
regulation risks which
are expected to be
removed on 2-3 years
horizon
Country
level
Industry
level
Company
level
Stable GDP growth. Over 4% GDP CAGR
Low Debt/GDP ratio. Russian Debt/GDP ratio is one
of the world lowest: less than 10%
Stable cash-flow. Electric utilities is characterized by stable
demand
Regulation uncertainty. Industry regulation is still under review
and expected to remain unstable for 2-3 years
Restriction of old capacities removal. The restriction forces
GEH to maintain inefficient power plants and spare capacities
Strong GR. GEH management is directly involved in
industry regulation development
High CSA program exposure. CSA investments
guarantee 14% IRR
Optimization potential. GEH retains solid fixed costs cut
potential being unutilized
Fuel mix optimization opportunities. GEH has the
potential to diversify fuel mix to lower fuel costs
Presence in most developed areas. GEH business
is located in key Russian industrial centers
Gazprom Energoholding Potential at a Glance
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2007 2012
2016
Creation of a vertically integrated
energy holding
Increase in electricity sales
revenue
Diversification of tariff regulation
risk
Fuel mix diversification
Commissioning of new
capacities
Increase in operational efficiency
What we promised in 2007?
100% electricity market
liberalization
Switching coal-fired power
units to gas (if reasonable)
Commissioning of 5GW new
capacities
Increase in electricity market
profit as a result of market
liberalization, cost
optimization and priority to co-
generation
What we delivered by 2012?
Higher returns on capacity
modernization projects
Increased use of co-generation
Commissioning of new capacity
in regions with poor electricity
supply
M&A
Foreign expansion opportunities
What’s next?
2011 2009
…
Inception Market
liberalization
OGK-2,6
merger
Efficiency
increase
campaign
IPO
Gazprom Energoholding Development:
Meeting the Expectations
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Генерация
Appendix
Investor Day 2013
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(1.2)
3.5 4.7 0.01 3.0 1.0
8.4 7.2
3.9 3.3 2.1
1.7 8.7
8.8 7.3
2008 2009 2010 2011 2012E
Financial Highlights (IFRS)
Sales, RR bn
0.9 8.5 10.5 5.9 10.4 3.8
13.2 12.6 11.8
14.6
9.8
15.9 20.1
23.9 21.0
2008 2009 2010 2011 2012E
EBITDA, RR bn
+ 217.3 % + 46.7 %
Net Profit, RR bn
+615.8%
(2) (3)
13.6
1.9
13.6 12.7
20.6
47.6%
20.7%
27.9%
3.8%
Sales Structure, %
2007
62.8%
21.5%
15.1%
0.6%
2012E
Electricity
Capacity
Heat
Others
1. For 2012 net income data without regard to impairment and possible restatement 2. Including Murmanskaya CHP 3. For 2008 – 2010 data is restated as the sum of OGK-2 and OGK-6 data
14.5
37.6 41.6 43.2
46.0
93.4 80.3 96.5 104.9 104.2
33.6 41.3 54.1 60.3 65.1
94.8 112.6
145.3 161.1 156.0
2008 2009 2010 2011 2012E
221.8 234.2
326.3 295.9
325.3
(1)
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110.0
936.0
60.0
1,830.0
420.0 111.0
210.5 665.0
479.5
60.0
100.0
450.0
875.0
16.0
420.0
61.5
640.0
420.0
2007 2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E
6.9 6.8 6.7 6.1 6.0
26.3 26.9 28.8 26.1 26.7
62.4 65.4 69.9 66.4 68.4
2008 2009 2010 2011 2012
88.7 76.1 82.5 79.8 75.2
26.9 26.8 27.2 28.4 30.4
64.3 61.7 65.0 64.6 61.0
2008 2009 2010 2011 2012
Electricity Output, kWh bn Heat Output, Gcal mm
179.9 164.6 172.8 174.7 166.6
(7.4%)
95.6 99.1 98.5 105.4
101.1
+5.8%
CSA Investment Program, Additional Capacity, mW
To be commissioned Commissioned
Operational Highlights and Investment Program
1. Including Cherepovetskaya GRES 2. Including Murmanskaya CHP 3. For 2008 – 2010 data is restated as the sum of OGK-2 and OGK-6 data
(2) (3)
(1)
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EBITDA 2012
SAP implementation
Contest bids’ price decrease 700
RR mm +3%
1,335
RR mm +10%
2,504
RR mm +40%
+4,5 RR bn EBITDA in 2012
EBITDA increase
EBITDA increase
EBITDA increase
Gazprom Energoholding Development
Costs Optimization
Gazprom Power Generation - Investor Day 2013
Lean production program
Personnel optimization
OGK-2 and OGK-6 consolidation to
achieve synergy
Cost reduction program (since 2012)
Program for the Shareholder Value
Increase (cost optimization, Lean
production, Non-core assets sale)
Unification of coal buying, outsourcing
of services
Reduction of personnel and motor
transport costs
Optimization of the investment
program on CSA and Automatic
system for commercial accounting of
power consumption in 2012
Repair program reduction
2008 2009 2010 2011 2012
2008 2009 2010 2011 2012
2008 2009 2010 2011 2012
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Contacts for investors
Gazprom Power Generation - Investor Day 2013
EKATERINA PAVLOVA
Head of Investor Relations
Phone: (007) (495) 428-47-83 (ext. 4607)
E-mail: [email protected]
Corporate Governance and Legal Services Department
Investor Relations
Fax: (007) (495) 428-47-98