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GAZPROM

January 28, 2010

Management Committee reviews Comprehensive Program for Gazprom’s business activity on foreign markets

The Management Committee took note of the information relevant to developing the Comprehensive Program for Gazprom’s business activities on foreign markets.

The Management Committee approved the Basic Provisions of the Comprehensive Program and resolved to submit them to the Board of Directors for consideration.

Gazprom’s specialized subdivisions were entrusted with:

- developing the system of strategic targets (second level) of Gazprom’s business activity on foreign markets;

- integrating the strategic targets of Gazprom’s business activity on foreign markets into the Company’s development program for 10 years;

- preparing proposals on streamlining and developing the management system for Gazprom’s business activity on foreign markets.

In addition, the Management Committee addressed natural gas production from non-conventional sources, for instance, shale gas. It was noted that shale gas production would only be commercially viable if two conditions were met: the stability of high prices on the global market and the considerable amount of annual investments in production operations. At the same time, the conventional gas production technology will remain most competitive and widespread in the world.

 

Background:

Gazprom pursues the strategic objective of becoming a leader among global energy companies through developing its business abroad by means of new markets development, activities diversification, supplies profitability and reliability assurance, products marketing, which result in higher shareholder value of the Company.

The Comprehensive Program for Gazprom’s business activity on foreign markets (Comprehensive Program) identifies the forward-looking measures and specifies the goals and tasks that need to be addressed to meet the Strategic Objective as well as to assist in Gazprom’s efficient exports activity.

The Company’s foreign business activity defined by the Comprehensive Program includes:

- increasing the profitability and sustainability of proceedings from foreign business activity (through maintenance of long-term contracts);

- securing a high degree of reliability and adaptivity of the gas supply and trading system (through diversification of delivery routes, transportation means, sales markets as well as products and services);

- expanding Gazprom’s global presence to transform the Company into the leading global energy company.

According to the Comprehensive Program, the main principles of Gazprom’s business activity abroad are as follows:

- an emphasis on the key regions of foreign business activity (Asia-Pacific, Europe, North America, CIS);

- flexibility and ability to adapt to evolving financial and market conditions;

- execution of foreign projects, which do not meet Gazprom’s strategic targets, on the self-financing principle;

- ability to give up the assets and projects that either no longer meet Gazprom’s strategic targets or have lost their investment potential;

- execution of foreign projects only as part of a feasible and integrated production chain.

In July 2006 the Board of Directors approved the levels of Gazprom’s strategic targets for a 10-year development period, including basic economic and production indicators that characterize corporate development prospects.

The strategic targets of the second level specify the basic strategic targets by areas and types of activity, and outline the production, marketing, economic, corporate, innovative and personnel-related tasks more clearly.

At present, the volume of Gazprom’s gas export is the only strategic target of the second level, which has been approved and covers the Company’s export and foreign business activity.

 

 

 

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