On 21 February 2005 OAO Gazprom issued its unaudited consolidated interim condensed financial information prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting” (IAS 34) for the nine months ended 30 September 2004.

The table below presents the unaudited IFRS consolidated interim condensed statement of income for the nine months ended 30 September 2004 and 2003. All amounts are presented in million Russian Roubles, unless otherwise stated.

	Nine months ended 30 September
	2004		2003
Sales (net of excise tax, VAT and customs duties)	683,330		597,382
Operating expenses	(494,845)		(415,360)
Operating profit	188,485		182,022
Net finance costs	(2,741)		(1,011)
Share of net income of associated undertakings	4,092		4,194
Gains (losses) on available-for-sale investments	3,740		(1,626)
Profit before profit tax and minority interest	193,576		183,579
Current profit tax expense	(35,068)		(31,259)
Deferred profit tax expense	(19,049)		(23,939)
Profit tax expense	(54,117)		(55,198)
Profit before minority interest	139,459		128,381
Minority interest	(1,586)		(1,942)
Net profit	137,873		126,439

Sales (net of excise, VAT and customs duties) increased by RR85,948 million, or 14%, to RR683,330 million in the nine months ended 30 September 2004 compared to the nine months ended 30 September 2003. More detailed information on our sales for the nine months ended 30September 2004 and 2003 is presented in the table below.

in million RR (unless otherwise stated)	Nine months ended 30 September
Sales of gas		2004	2003
Europe
Net sales (net of excise tax and customs duties)		316,221	316,516
Volumes in bcm		113.4	102.9
Average price, RR/mcm (including excise tax and customs duties)		3,802.6	4,151.8
FSU
Net sales (net of excise, VAT and customs duties)		48,471	32,817
Volumes in bcm		47.5	31.3
Average price, RR/mcm (including excise tax and customs duties, net of VAT)		1,338.1	1,339.8
Russia
Net sales (net of excise tax and VAT)		172,122	128,839
Volume in bcm		209.4	212.8
Average price, RR/mcm (including excise tax and net of VAT)		828.4	676.6
Total sales of gas
Net sales (net of excise tax, VAT and customs duties)		536,814	478,172
Volume in bcm		370.3	347.0
Sales of gas condensate and other oil and gas products (net of excise tax, VAT and customs duties)		87,133	62,269
Gas transportation sales (net of excise tax and VAT)		21,307	20,421
Other sales (net of VAT)		38,076	36,520
Total sales (net of excise tax, VAT and customs duties)		683,330	597,382

Net sales of natural gas increased by RR58,642 million, or 12%, to RR536,814 million in the nine months ended 30 September 2004 compared to the nine months ended 30September2003.

Net sales of natural gas to Europe remained almost flat at RR316,221million in the nine months ended 30 September 2004 compared to the nine months ended 30 September 2003. This was primarily due to a 9% decrease in net prices in RR terms, offset by a 10%, or 10.5 bcm, increase in sales volumes. Average net prices decreased primarily as a result of the 7% appreciation of the RR against the U.S. dollar for the nine months ended 30 September 2004 compared to the nine months ended 30 September 2003. The increase in sales volumes was due to increased volumes under existing contracts and under new contracts in France and the United Kingdom.

Net sales of natural gas to FSU countries increased by RR15,654 million, or 48%, to RR48,471 million in the nine months ended 30 September 2004 compared to the nine months ended 30 September 2003. This is explained primarily by the increase in volumes of gas sold to FSU countries, in particular due to a 7.9 bcm increase in sales volumes to Ukraine.

Net sales of natural gas in the domestic market increased by RR43,283 million, or 34%, to RR172,122 million in the nine months ended 30 September 2004 compared to the nine months ended 30September2003. This was due to the increase in domestic gas tariffs set by the Federal Tariffs Service, which was slightly offset by the 2%, or 3.4 bcm, decrease in sales volumes.

Total excise taxes on natural gas sales decreased by RR112,430 million, or 98%, to RR2,810 million in the nine months ended 30 September 2004 compared to the nine months ended 30September 2003. The decrease was due to the fact that excise tax on natural gas produced after 1January 2004 was abolished. This decrease was offset by the RR109,060 million increase in customs duties to RR128,643 million in the nine months ended 30September 2004 compared to RR19,583 million in the nine months ended 30September 2003.

Sales of gas condensate and oil and gas products increased by RR24,864 million, or 40%, to RR87,133 million in the nine months ended 30 September 2004. This increase was primarily due to acquisition of controlling interests in a number of petrochemical companies in the six months ended 31 December 2003 and increased volumes and prices for sales on the domestic market. Sibur and its affiliated petrochemical companies accounted for 61% of sales of gas condensate and oil and gas products in the nine months ended 30 September 2004 and 2003.

Operating expenses increased by RR79,485 million, or 19%, to RR494,845 million in the nine months ended 30 September 2004 compared to the nine months ended 30September 2003. Operating expenses accounted for 72% and 70% of sales in the nine months ended 30 September 2004 and 2003, respectively.

The increase in operating expenses was primarily due to higher taxes other than on income (RR30,390 million), higher staff costs (RR23,893 million), higher cost of purchased gas (RR20,985 million), materials (RR18,100 million) and depreciation (RR6,619 million) which were partially offset by a net release in provisions for impairment of assets and lower cost of processing services. The increase in taxes other than on income was primarily due to changes in tax legislation related to natural resources production tax. The increase in staff costs was primarily due to the increase in the overall number of employees following the acquisition of controlling interests in a number of petrochemical companies in 2003 and the increase in average base salaries in June 2003, December 2003 and April 2004. The increase in the cost of purchased gas was primarily related to purchases of gas by Sibur and purchases of gas in Central Asia and in Europe. The increase in the cost of materials was primarily related to higher purchase volumes, following the acquisition of controlling interests in a number of petrochemical companies in 2003, and higher prices of materials.

The net release in provisions for impairment of assets of RR18,587 million in the nine months ended 30 September 2004 compared to a net charge of RR4,245 million in the nine months ended 30 September 2003 was primarily due to the reassessment of the impairment provision for accounts receivable due from NAK Naftogaz Ukraine for gas shipments made from 1997-2000, which resulted in a RR19,671 million net release. The reassessment followed agreements signed with NAK Naftogaz Ukraine in August 2004.

Profit tax expense decreased by RR1,081 million, or 2%, to RR54,117 million in the nine months ended 30September 2004 compared to RR55,198 million in the nine months ended 30September 2003. Our overall effective profit tax rate decreased to 28% in the nine months ended 30September 2004, from 30% in the nine months ended 30 September 2003.

In the nine months ended 30 September 2004 our net profit totaled RR137,873 million which is RR11,434 million, or 9%, higher compared to the nine months ended 30 September 2003.

More detailed information on the IFRS consolidated interim condensed financial information for the nine months ended 30 September 2004 can be foundhere.

DIVISION OF RELATIONS WITH MASS MEDIA