The Board of Directors’ meeting is in progress at Gazprom’s Headquarters.

The Board of Directors approved the Management Committee’s activities targeted at improving the corporate depreciation policy.

The Management Committee was commissioned to submit for the consideration of the Board of Directors a Draft budget, taking into account future re-assessment of core assets.

Reference:

Some 16% of the overall gas industry assets (38.7%, in the gas production sector) have so far been fully depreciated.

Over 2002 to 2003, Gazprom hasn’t re-evaluated its core gas assets.

As a result, while expenses incurred for commissioning and acquisition of new core assets are on a rise driven by inflation, useful lives and, consequently, lease payments are underevaluated, thus, distorting the operational cost structure.

To improve its depreciation policy, Gazprom intends to:

• Complete a List of major assets being used in the gas industry
• Set up a constantly functioning Commission for core asset technical condition assessment, liquidation decision-making, service life changes and re-evaluation activities
• Finalize and ratify the Regulations of Gazprom’s core asset re-evaluation
• Analyze the impact of additional depreciation volumes on corporate economic parameters, based on the independent auditor’s conclusions

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