The Gazprom Headquarters hosted today a working meeting between Alexey Miller, Chairman of the Company’s Management Committee and Igor Chudinov, Prime Minister of the Republic of Kyrgyzia.

The parties discussed cooperation development issues in the oil and gas sector, focusing on the join activities in hydrocarbon exploration and production, petrochemical wholesale and retail markets development in the Republic as well as natural gas transportation and distribution in Kyrgyzia.

The meeting also deliberated on the terms & conditions and the form of Gazprom’s participation in the privatization of gas infrastructure facilities in the Kyrgyz Republic.

The meeting participants confirmed their interest in furthering the mutually beneficial long-term partnership between Gazprom and Kyrgyzia across the entire spectrum of the bilateral cooperation.

Background:

The proven reserves of natural gas in the Kyrgyz Republic are estimated at 6 billion cubic meters. The development of natural gas fields is hindered by the geologic peculiarities and insufficiently developed infrastructure. Domestic production and consumption of natural gas average 30 million cubic meters and 750 million cubic meters per annum, respectively.

In May 2003 Gazprom and the Kyrgyz Republic Government signed the long-term Cooperation Agreement in the Gas Industry for a period of 25 years.

In January 2006 Gazprom and the Government of Kyrgyzia signed the Memorandum of Intent to set up a joint Russian-Kyrgyz venture in the oil and gas industry. In May 2007 Gazprom and the Kyrgyzia Government signed the Agreement on the common principles for the geological survey of subsoil resources in order to lay the cornerstone for the joint venture operation. Within the Agreement the following activities were carried out:

- in February 2008 Gazprom obtained two licenses for the right to use the subsoil resources in the areas of Kugart and Eastern Mailu-Suu IV;

- in July 2008 the 2008-2011 Stepwise Program for geological survey of the subsoil resources in the above mentioned areas was approved;

- in December 2008 Gazprom finished the geological prospecting projects development in the said two areas.

In October 2008 Gazprom and the Government of the Republic signed the Memorandum of Understanding to develop cooperation within the privatization of a part of the state-owned stake in Kyrgyzgaz for the purpose of developing long-term and mutually beneficial cooperation in gas transportation and distribution in Kyrgyzia.

In pursuance of the MoU the following steps were taken:

- in January 2009 a joint working group was shaped;

- in February 2009 an Action Plan aimed at working out the common principles and major terms for the project implementation was approved.

In 2006 Gazprom neft incorporated a subsidiary – Gazprom neft Asia in Kyrgyzia. By now, the company is Kyrgyzia’s largest operator on the wholesale and retail markets of petroleum products and liquefied hydrocarbon gases.