[PPT] - 0 . LIMITATION OF LIABILITY This presentation is prepared by PowerPoint Presentation

SLIDE 1

г. Москва

GAZPROM’S FINANCIAL AND ECONOMIC POLICY PRESS CONFERENCE

JUNE 25, 2015

SLIDE 2

1 LIMITATION OF LIABILITY 1

This presentation is prepared by Gazprom (hereafter – the Company) and contains corporate information for investors. This presentation is not an offer for sale or an incentive of any offer for purchasing any shares or other securities, implying a shareholding interest in the Company, or a subscription for such. The presentation and information it contains as well as the fact of its display or publishing can’t be regarded with respect to any contract or investment decision. For no purpose should the information contained in this presentation be relied on as well as any other materials provided in any other presentation in terms of their completeness, accuracy or impartiality. The information contained in this presentation should not be regarded as an investment consultation. The Company made every effort for making sure this presentation was reliable and opinions voiced in it were reasonable and impartial. Therefore, no guarantees or assurances either self-evident

r implied are provided in relation to accuracy, completeness or impartiality of information or opinions contained in this presentation on behalf of the Company, its

shareholders, directors, officials or employees, or any other persons. Not one of the Company’s directors, its shareholders, directors, officials or employees, or any other persons incur any responsibility for any losses which may occur as a result of using this presentation or its contents in any form or in any other connection to this presentation. This presentation may contain forward-looking statements. Such forward-looking statements include the data which are not accomplished facts, statements of the Company’s intentions, suggestions or current expectations in relation to, inter alia, the Company’s operational results, its financial state and liquidity, prospects, growth, strategy and development of the Company’s activity sector. For the reason of being related to future events and depending on circumstances that may occur in the future, forward-looking statements inherently involve risks and uncertainties. The Company notifies in advance that it provides no guarantees for forward-looking statements to be effectuated and that actual operational results, financial state and liquidity as well as the Company’s activity sector development may differ essentially from forecasts or suggestions contained or implied in the said forward-looking statements. In addition, in case the Company’s operational results, its financial state and liquidity as well as the Company’s activity sector development conform with forward-looking statements contained herein, such results and circumstances do not reflect the results and circumstances of future periods. Data and statements contained in this presentation are relevant as of the time of its display and may be changed without prior notice. No party shall be under legal

bligation for updating and renewing the data contained herein.

Attendance at this presentation means that you agree to abide by the limitations mentioned above. GAZPROM’S FINANCIAL AND ECONOMIC POLICY, JUNE 25, 2015

SLIDE 3

2 GAZPROM’S STRONG FINANCIAL STANDING IN GLOBAL OIL AND GAS SECTOR

2014 results 5 largest global oil and gas companies by EBITDA*, 2014

Gazprom’s EBITDA adjusted for impairment loss

56.9 51.9 51.7 51.4 36.5 10 20 30 40 50 60 70 80 USD bln

Among world’s top 3 public oil and gas

companies by EBITDA (USD 52 bln)

World’s top public oil and gas company by free

cash flow (USD 17 bln)

For five years Gazprom has been in world’s to

top 5 5 companies annual ranking by key financial indicators

GAZPROM’S FINANCIAL AND ECONOMIC POLICY, JUNE 25, 2015

SLIDE 4

3 SUSTAINABLE GENERATION OF FREE CASH FLOW

Operating cash flow Free cash flow

RUB bln

For 9

9 year ars in row Gazprom has been generating positive free cash flow

For 9

9 quar arter ers in row Gazprom has been generating free cash flow despite business seasonality

RUB bln

Seasonal sales low

1 349 1 397 1 262 124 345 654 500 1000 1500 2000 2012 2013 2014 CAPITAL INVESTMENTS FREE CASH FLOW 1 473 1 742 1 916 82 114 142 15 74 290 76 5 283 50 100 150 200 250 300 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014

GAZPROM’S FINANCIAL AND ECONOMIC POLICY, JUNE 25, 2015

SLIDE 5

4 DIVIDENDS

* Dividend yield is defined as approved dividends for period divided by share price as of June 22, 2015. Major oil and gas companies by capitalization as of June 22, 2015 ** Proposed by Board of Directors

2.66 0.36 2.39 3.85 8.97 5.99 7.2 7.2 17.5 4.9 9.1 25.0 24.1 25.5 27.1 90.2 10 20 30 40 50 60 70 80 90 100 2 4 6 8 10 12 14 2007 2008 2009 2010 2011 2012 2013 2014 Dividend per share % of Gazprom net profit under RAS (right scale) RUB / share %

**

Dividend payout Dividend yield of shares in major oil and gas companies worldwide*

Dividend yield of Gazprom shares is at level with major global oil and gas companies

SOURCE:COMPANY’S DATA, BLOOMBERG

GAZPROM’S FINANCIAL AND ECONOMIC POLICY, JUNE 25, 2015

6.6% 6.2% 5.8% 5.3% 5.1% 4.8% 4.7% 4.3% 3.9% 3.8% 0% 2% 4% 6% 8% 10%

SLIDE 6

5

4% 20% 60% 15%

HIGH PROFITABLE MID PROFITABLE LOW PROFITABLE UNPROFTABLE

GAZPROM NOVATEK

69% 17% 14% 62% 25% 12%

ROSNEFT

CHANGES IN GAS PRICE REGULATION

76% 71% 68% 24% 29% 32%

0% 20% 40% 60% 80% 100% 2012 2013 2014 GAZPROM GROUP'S GAS INDEPENDENT SUPPLIERS' GAS

Due to differentiation of regulated prices by price bands in Russia, supplier obtains different profits and sometimes bears losses when selling gas to consumers in various regions

Independent producers provide gas mostly to regions with high profitability,

while enjoying discounts to regulated prices

Gazprom is being displaced to low-profitable and unprofitable regions
Russian Government is reviewing issue of transiting to regulated prices by

establishing price range with discount of up to 15% without differentiation by regions

Transition to new price regulation will allow Gazprom establishing flexible gas

price policy for Russian industrial consumers

Gas supplies in Russian market by profitability levels Gas supply to Russian consumers

GAZPROM’S FINANCIAL AND ECONOMIC POLICY, JUNE 25, 2015

SLIDE 7

6

Gazprom provides substantial support to Russian economic development by supplying gas at regulated prices. Russian gas prices are still lowest as

compared to Europe and USA

Average gas prices for industrial consumers and population in Europe and USA are much higher than prices in key trading floors or Gazprom’s prices
In countries with advanced market economy gas prices for domestic consumers are much higher compared to prices for major industrial consumers

1 445 1 333 1 140 1 060 1 057 947 904 898 773 695 519 444 384 125 200 400 600 800 1 000 1 200 1 400 1 600

Japan (LNG) NBP

GAS PRICES IN RUSSIA, EUROPE, USA AND JAPAN

Average retail gas prices for domestic consumers in Russia, Europe and USA, 2014(*, **) Average gas prices for industrial consumers in Russia, Europe and USA, 2014(*,***)

USD / 1,000 m3

Henry Hub

530 482 444 441 432 425 412 398 387 384 366 363 194 132 200 400 600 800 1 000 1 200 1 400 1 600

Japan (LNG) NBP

* With account of gas distribution organization tariffs, payment for distribution and logistical support services ** VAT included *** VAT not included

GAZPROM’S FINANCIAL AND ECONOMIC POLICY, JUNE 25, 2015

Henry Hub

SOURCE CE: : CERA, IEA, EIA, , FTS, , MOSOBLGAZ

USD / 1,000 m3

SLIDE 8

7 FLUCTUATION OF GAS TRANSMISSION TARIFFS

8.92 4.81 2.62 2.30 1.85 7.04 2.39 1.87 2.08 1.94 3.03 2.30 1.26 2 4 6 8 10 DEDAN (Germany) NETG (Germany) METG (Germany) HETPA (Germany) OpenGrid (Germany) PW (Austria) WAG (Austria) TAG (Austria) Slovakia Czech Republic Fayetteville Pipeline (USA) Midcontinent Express (USA) Gazprom (Russia) Czech Republic Fayetteville Pipeline (USA) 0.85 0.99 0.95 1.28 1.38 1.46 1.47 1.26 2 4 6 8 10 2007 2008 2009 2010 2011 2012 2013 2014 2015П

**

EUR / 1,000 m3 per 100 km

At present, Russian tariffs on gas transmission services

are lower than European and most of US tariffs***

Average tariffs on gas transmission in Russia, Europe and USA* in 2014

In 2014 tariff freezing sent transmission profitability for independent

suppliers down below zero (-2.4%).

In 2015 tariff increase by 2,0 % from July 1, as proposed by Russian

FTS, will not result in loss reduction (-2.2%).

SOURCE CE: : COMPANY’S DATA * Provided maximum capacity load factor (load factor = 1) ** Considering average rate of RUB 65 per 1 EUR *** In USA tariffs differ among companies and account for average of USD 1.4 to USD 6.4 for 1,000 m3 per 100 km

1.00 EUR / 1,000 m3 per 100 km EUROPE USA

GAZPROM’S FINANCIAL AND ECONOMIC POLICY, JUNE 25, 2015

Average regulated tariffs on gas transmission services for independent suppliers

SLIDE 9

8 TRANSITION TO FORMULA-BASED SEVERANCE TAX FOR GAS

147 237 509 602 719 745 200 400 600 800 2010 2011 2012 2013 2014 2015F SEVERANCE TAX FOR GAS, GAZPROM (RUB/1,000 M3) RUB

Severance tax formula for gas in effect since July 1, 2014

Benefit fits

Direct link of tax amount to actual gas selling prices
Tax exemptions for basic, new, mature and hard-to-recover

fields

Transparency of taxation

Main tax exemption areas:

New produc

uction ion centers: Yamal Peninsula and Gydan Peninsula, Irkutsk and Krasnoyarsk regions, Far East

Matur

ure fields lds: depletion exceeds 70%

Hard-to

to-recov

ver fields: Astrakhan region
Deep gas fields

lds: depth exceeding 1,700 m

Severance tax for gas = 15% * Average gas selling price * Difficulty of gas extraction + Transmission expenses

Calculation of severance tax rate for gas*

Average gas severance tax rate in 2H of 2014 and 2015 is provided for 7 major subsidiaries

GAZPROM’S FINANCIAL AND ECONOMIC POLICY, JUNE 25, 2015

SLIDE 10

9

Operating and investment activities

FINANCIAL STRATEGY IN NEGATIVE GLOBAL FINANCIAL MARKET ENVIRONMENT

Financ ancial ial strategy egy

Risk management Debt and liquidity management Investor relations Budgeting Capital cost management Financial investments management Operating expenses management Working capital management Cutting down accounts receivable Inventory

ptimization

Managing accounts payable FS analysis with due account of crisis factors Wider use of project financing for execution of Gazprom Group’s projects Slashing expenses across entire Gazprom Group Variance-based budget with expense prioritization accounting for possibility of doubtful expenses Self-financing Monitoring of performance Prioritization of projects Reducing costs of Administration and subsidiaries Synchronized purchase of gas Giving priority to intra-Group financial resources Supporting international credit ratings Setting of risk limits

n credit agencies

Optimization of cash flows Ensure typical procedures for payments Extending volume of debt financing from Russian and Asia- Pacific capital markets Listing at Asian exchanges Expanding Asia- Pacific investor base On-line management

f intra-Group

liquidity Optimization of taxation Centralization of external borrowings with follow-up lending of subsidiaries and affiliates Control over use of funds from Eurobond placements and foreign loans

Financial strategy in negative global market environment calls for further tightening of financial aspects of Gazprom Group’s operating and investment activities

Financial activities

Разработка Плана мероприятий по повышению эффективности деятельности Группы Газпром

GAZPROM’S FINANCIAL AND ECONOMIC POLICY, JUNE 25, 2015

SLIDE 11

10

* Prime cost of gas production – costs of 1,000 m3 of commercial gas production by 7 major gas producing subsidiaries of Gazprom * * Average estimated severance tax rate to taxable gas volume *** Prime cost of gas transmission – costs of 1,000 m3 of gas transmission per 100 km by Gazprom’s gas transmission subsidiaries (within Russian Federation)

WELL-BALANCED COST MANAGEMENT POLICY

49 53 54 59 20 40 60 80 2012 2013 2014 2015P 536 623 716 766 509 610 719 745 400 800 1200 1600 2012 2013 2014 2015P PRIME COST OF GAS PRODUCTION SEVERANCE TAX FOR GAS** RUB / 1,000 m3 RUB / 1,000 m3 per 100 km 1 045 1 233 1 435

Prime cost of gas production* Prime cost of gas transmission***

1 510

Foreca cast t effect fect of Progr gram execu ecution tion in 2015 – RUB 13 13.1 1 bln:

Operating activities:

current costs – RUB 6.6 bln financial costs – RUB 0.2 bln

Investment activities – RUB 6.3 bln

Effec ect t of Progr gram execu ecuti tion in 2014 – RUB 21.8 .8 bln:

Operating activities:

current costs – RUB 8.0 bln financial costs – RUB 0.6 bln

Investment activities – RUB 13.2 bln – due

e to bidding ing for goods, , works ks/s /ser ervi vices ces, , mate teria ials and equipm ipmen ent

Cost optimization (reduction) program, 2014–2015

GAZPROM’S FINANCIAL AND ECONOMIC POLICY, JUNE 25, 2015

SLIDE 12

11

91 47 9 14 4 2 20 40 60 80 100 120 Main process equipment Pipes GCU spare parts and motor repair services SCOPE OF SUPPLY IN AGREED PRICES CUTTING OF INITIAL BID

COST OPTIMIZATION IN VITAL MATERIALS AND EQUIPMENT PRICING IN 2014

RUB bln RUB / t*

* Net of VAT

Savings in vital materials and equipment exceeded RUB 20 bln

Savings due to cutting suppliers’ bid for vital materials and equipment in 2014 Pricing formula effect between 2012 and 2014

GAZPROM’S FINANCIAL AND ECONOMIC POLICY, JUNE 25, 2015

56 000 58 000 60 000 62 000 January 2012 March 2012 May 2012 July 2012 September 2012 November 2012 January 2013 March 2013 May 2013 July 2013 September 2013 November 2013 January 2014 March 2014 May 2014 July 2014 September 2014 November 2014 ИНДИКАТИВНАЯ ЦЕНА, РАССЧИТЫВАЕМАЯ ЕЖЕМЕСЯЧНО ПО ФОРМУЛЕ НАЧАЛЬНАЯ (МАКСИМАЛЬНАЯ ЦЕНА), РАССЧИТАННАЯ НА ОСНОВАНИИ СОГЛАШЕНИЙ INDICATIVE FORMULA-BASED MONTHLY PRICE INITIAL (MAXIMUM) AGREEMENT-BASED PRICE

SLIDE 13

12 ESTABLISHING SINGLE TREASURY OF GAZPROM GROUP

Consolidation of all Group’s funds on parent Company’s bank accounts Centralized management of Group’s financial risks Centralized management of Group’s cash flows Transparency and monitoring of subsidiaries’ payments

SINGLE TREASURY OF GAZPROM GROUP

LOCAL CASH POOL

Gazprom

System of cross-border cash pools

Foreign subsidiary Foreign subsidiary Foreign subsidiary Subsidiary Subsidiary SUB SUB SUB SUB SUB SUB

LOCAL CASH POOL

SUB SUB SUB SUB SUB SUB Subsidiary

GAZPROM'S FINANCIAL AND ECONOMIC POLICY, JUNE 25, 2015

System of cash pools in Russian Federation

SLIDE 14

13

KPI range

809 Key Performance Indicators

SPECIFIC COSTS WITHIN PRODUCTION BUSINESS SEGMENT

RUB per t of fuel equivalent

min max

732 Relative share in calculating bonus for reporting period

15% 65

SPECIFIC COSTS WITHIN TRANSPORTATION BUSINESS SEGMENT RUB per unit; commodity / goods transportation of 1,000 m3 per 100 km

59 15%

CUTTING PRODUCT (WORK, SERVICE) RELATED COSTS

10% 5% 71

LABOR EFFICIENCY

RUB thousand / man-hour

72 5% 5%

RETURN ON SHAREHOLDERS INVESTMENTS

RUB

15% 10% 9%

RETURN ON SHAREHOLDERS EQUITY

based on IFRS

15% 20%

Financial and economic KPIs Industry KPIs

425

GAS SALES VOLUMES

by volume - bln m3

470 15% 6

COMMISSIONING OF PRIORITY PRODUCTION FACILITIES

15%

First presented in 2015

MANAGEMENT KEY PERFORMANCE INDICATORS (KPI) IN 2015

GAZPROM'S FINANCIAL AND ECONOMIC POLICY, JUNE 25, 2015

SLIDE 15

14

Financing capital investments from own funds
Placing priority on appealing and viable

projects

Continuous monitoring project implementation

efficiency

Implementing merger and acquisition projects
nly with regard to possibilities for additional

funding

Stress analysis of possible merger and

acquisition projects

SOURCE CE: FORECAST PROVIDED BY COMPANY’S TOP MANAGEMENT UNDER IFRS

Capital investments of Gazprom Group and self financing

PRINCIPLES OF INVESTMENT PROGRAM FORMATION

32 26 37 55 50 46 37 142% 113% 140% 105% 109% 125% 152% >100% 0% 20% 40% 60% 80% 100% 120% 140% 160% 20 40 60 80 100 2008 2009 2010 2011 2012 2013 2014 2015П GAS PRODUCTION GAS TRANSMISSION, PROCESSING AND SALES OIL AND GAS CONDENSATE PRODUCTION POWER AND HEAT GENERATION AND SALES SELF FINANCING USD bln

GAZPROM'S FINANCIAL AND ECONOMIC POLICY, JUNE 25, 2015

Key principles of formation

* Ratio between operational cash flow and capital investments volume

SLIDE 16

15 MAJOR RUSSIAN DEBTOR

Debt repayment profile** Cost of debt financing Credit ratings

24% 22% 18% 17% 17% 19% 13% 15% 38% 33% 36% 36% 21% 26% 33% 32% 2011 2012 2013 2014 LESS THAN 1 YEAR 1-2 YEARS 2-5 YEARS MORE THAN 5 YEARS 6.2%

3,0%

5.5% 2 4 6 8 10 2008 2009 2010 2011 2012 2013 2014 WEIGHTED FIXED AVERAGE INTEREST RATE WEIGHTED VARIABLE AVERAGE INTEREST RATE WEIGHTED AVERAGE INTEREST RATE %

** Exclusive of bill discounts

Lowest level of using borrowed funds, 2014

20 40 60 80 100 120 140 1 2 3 4 5

*

Net debt / EBITDA Debt, USD bln Moody's

A- A3 BBB+ Baa1 BBB Baa2 BBB- Baa3 BB+ Ba1 BB Ba2 BB- Ba3 B+ B1

Dagong, S&P, Fitch

A A2 A+ A1 AA Aa AAA Aaa

Jan 2004 Jan 2005 Jan 2006 Jan 2007 Jan 2008 Jan 2009 Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015

S&P MOODY'S FITCH DAGONG INVESTMENT GRADE Russian sovereign ratings * Rosneft’s net debt adjusted with regard to pre-payment under long-term oil supply contracts

SOURCE CE: COMPA PANYS’ DATA

Jan. Jan. Jan. Jan. Jan. Jan. Jan. Jan. Jan. Jan. Jan. Jan.

GAZPROM'S FINANCIAL AND ECONOMIC POLICY, JUNE 25, 2015

SLIDE 17

16 NATURAL HEDGING AGAINST NATIONAL CURRENCY VOLATILITY

*Data for 2014 with all other results remaining unchanged, assessment by management Data on revenues, cash operating expenses and capital investments were adjusted for ruble-denominated sums linked to foreign currency

Positive effect of ruble depreciation on Company’s business
Reassessment of foreign currency debt has no negative impact
n Company’s ability to service its debts due to foreign

currency component prevailing in revenues

Build-up of financial results in event of ruble depreciation by 10%*

GAZPROM'S FINANCIAL AND ECONOMIC POLICY, JUNE 25, 2015

SOURCE CE: COMPA PANY DATA, ASSESSMENT BY MANAGEMENT

+6% +4% +2% Revenues Cash operating expenses Capital investments + 360 RUB BLN + 160 RUB BLN LN + 31 RUB BLN +9% +3% +12% Total debt Cash and cash equivalents Net debt + 235 RUB BLN + 34 RUB BLN + 201 RUB BLN

SLIDE 18

17

Date of deal: Value: Coupon: Payback period: Achievements

Foreign currency borrowings

February 26, 2014 EUR 750 mln 3.600% 7 years

One of lowest rates among Russian rival companies and developing

markets in Eurobond market

SUCCESSFUL ACTIVITY IN DEBT CAPITAL MARKETS

November 10, 2014 USD 700 mln 4.300% 1 year

First public issue of Russian debt securities in Europe after sanctions

imposition

Despite geopolitical conditions, American and British investors remain

key ones

December 4, 2014 EUR 390 mln EURIBOR + 2.75% 1 year

Bilateral credit agreement between Gazprom and UniCredit
Important for developing cooperation with European officials in

banking sector at times of sanctions pressure on Russia

January 16, 2015 EUR 350 mln EURIBOR + 2.75% 1.5 years

First bilateral credit agreement in history of relations between

Gazprom and Intesa Sanpaolo Group

Important for developing cooperation with credit institutions from Italy

and other European countries

April 10, 2015 USD 500 mln LIBOR + 3.25% 3 years

Syndicated loan arranged by JP Morgan, involving Asian banks

Ruble borrowings

October 28, 2014 RUB 15 bln 10.700% 30 years

One of latest market operations prior to Central Bank of Russian

Federation increasing key interest rate and in context of credit ratings downgrade regarding Russia and Russian companies

Issue was in demand by main investor categories; 49 investor

applications were registered, including foreign ones

GAZPROM'S FINANCIAL AND ECONOMIC POLICY, JUNE 25, 2015

SLIDE 19

18 INVESTOR POOL DIVERSIFICATION

Increasing share of Gazprom GDRs owners in Asia Gazprom’s GDRs included in quotation list of Singapore Stock Exchange

Building up international investor pool
Almost round-the-clock trading of Company’s securities on

international platforms

Gazprom’s Investor Day held in Hong Kong and Singapore for first time Gazprom obtained highest credit rating (AAA) from Asian rating agency Dagong

According to Dagong, Gazprom’s credit

rating exceeds sovereign credit rating of Russian Federation (A/stable)

Increasing share of investors in Asia-Pacific paves way for Company’s listing on Hong Kong Stock Exchange or

ther Asian stock exchanges

NORTH AMERICA 48% EUROPE 48% ASIA- PACIFIC 4% 2008 2008 NORTH AMERICA 49% EUROPE 40% ASIA- PACIFIC 10% AFRICA AND MIDDLE EAST 1% 2014 2014

SOURCE CE: : INVESTOR IDENTIFICA CATION RESEARCH CH BY NASDAQ, , AS OF DECEMBER 31, 2014

Over 230 representatives of investment

community took part in event (>40% of local Asian investors)

GAZPROM'S FINANCIAL AND ECONOMIC POLICY, JUNE 25, 2015

SLIDE 20

19

World’s largest oil & gas Company
122.7 bln barrels of oil equivalent of proven

hydrocarbon reserves

8.9 bln barrels of oil equivalent of daily

hydrocarbon production

>100% reserves recovery ratio
Focus on shareholder value
Sound dividend policy
High level of transparency
Commitment to principles of