Gazprom Netherlands B.V. and the Algerian State Oil and Gas Corporation (ASOGC) Sonatrach have signed an Agreement for the transfer of rights for hydrocarbon exploration and production in the onshore area El Assel located in the Berkine Basin of Algeria. Gazprom’s share in the project will account for 49 per cent.

Based on the provisional estimates the oil recoverable reserves of the said area amount to some 30 mln t. El Assel includes three blocks covering a total of 3,083km2.

The said contract, if signed, will enable Gazprom to initiate in Algeria the first hydrocarbon exploration and production project, which will foster the Company’s position in the region.

Background:

On December 13, 2008 Gazprom was announced the winner of the hydrocarbon exploration and development tender for the onshore area El Assel.

Algeria’s proven natural gas reserves total 4.58 tcm (the first place in Africa after Nigeria – 5.15 tcm). The main part of the natural gas reserves is concentrated in the central and eastern parts of the country.

The country’s proven oil reserves amount to 1.58 bln t (the third place in Africa after Libya and Nigeria). In the energy balance of Algeria natural gas accounts for 62.5 per cent, oil – 34.5 per cent, coal – 2.5 per cent, hydro energy – 0.5 per cent.

The Algerian State Oil and Gas Corporation Sonatrach deals with oil and natural gas exploration, transportation and marketing, controls the bulk of gas production and wholesale trade.

On August 4, 2006 Gazprom and the ASOGC Sonatrach signed the Memorandum of Understanding. The document determines the following basic directions of cooperation development: geological exploration, production, transportation, gas transportation and distribution systems development, asset swap, oil and natural gas processing and marketing in Algeria, Russia and in third countries.

On June 16, 2008 Gazprom opened its official Representative Office in Algeria.

Gazprom Netherlands B.V. is a 100 per cent subsidiary of Gazprom responsible for the coordination and management of the Company’s external assets on behalf of Gazprom Group.