Gazproms Financial and Economic Policy Press Conference 0 Moscow - PowerPoint PPT Presentation

Gazprom’s Financial and Economic Policy Press Conference 0 Moscow

Limitation of Liability 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 or 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 obligation for updating and renewing the data contained herein. Attendance at this presentation means that you agree to abide by the limitations mentioned above. 1 1

Gazprom – Global Energy Company Compound annual growth rate (CAGR) for 6 years Leader among global companies by EBITDA, 2013 (1) 80 50% 40% 38% 39% 38% 40% 60 33% USD billion 30% 9.7% 23% 40 20% Revenue 16% 20% 15% 5.2% 11% 20 10% 63.2 57.8 57.5 55.8 48.9 48.7 48.6 48.4 41.4 39.5 0 0% 10.4% (1) EBITDA Profitability by EBITDA EBITDA -0.4% 3 rd among global by net profit, 2013 (2) 80 50% 45% 43% 42% 38% 35% USD billion 40% 60 5.7% 30% 22% 22% 40 Net profit 20% 13% -2.8% 8% 20 6% 10% 42.7 37.0 35.8 34.9 32.6 27.3 27.1 25.5 23.5 22.0 0 0% -5% 0% 5% 10% 15% Gazprom, 2007-2013 (3) Major oil and gas companies , 2007-2013 Net profit Profitability by net profit Source: Gazprom’s data, Bloomberg 1. Gazprom’s adjusted EBITDA is calculated as operating profit before amortization and provisions for impairment (provisions for impairment of accounts receivable, prepayments, work in progress, investments and other long-term assets, reserves). 2. Net profit for shareholders. 3. Top 10 major oil and gas companies by capitalization as of December 31, 2013 (net of Gazprom): Exxon Mobil, Chevron, PetroChina, Shell, BP, Total, Petrobras, Sinopec, Eni and ConocoPhillips 2

Sustainable Generation of Free Cash Flow Free cash flow of Gazprom and major Russian Gazprom’s free cash flow and capitalization versus oil and gas companies, 2013 (1) major Russian oil and gas companies, 2013 (1) 15% 400 13% 351 300 10% 9% RUB billion 183 200 5% 5% 3% 3% 100 47 45 31 0% 0 Source: Bloomberg as of June 20, 2014 1. Five major Russian oil and gas companies by capitalization as of June 20, 2014 3

Revenue Diversification: New Source of Growth Net revenue from sales Gas condensate production regions million t 3000 177 156 2500 794 156 761 RUB billion Yamburg 4.7 Novy Urengoy 5.5 739 163 2000 125 Orenburg 0.1 376 Tomsk 344 0.3 Astrakhan 113 3.7 1500 210 345 276 235 Gas condensate production (1) million t 1000 20 1352 +20% 18 1209 500 973 16 14 18 0 17 12 2011 2012 2013 15 15 13 10 12 Oil and gas refining products Crude oil and gas condensate 11 Electric and thermal power Gas transmission 8 2010 2011 2012 2013 2014P 2015P 2016P Gas sales in Russian Federation Other 1. Management’s estimates; excluding production by affiliated companies 4

On Changing Gas Price Regulation Gas supply profitability 1% 1% High profitable 14% 5% 40% 28% Mid profitable Low profitable 98% 53% 60% Unprofitable Gazprom Novatek Rosneft  Due to differentiation of regulated prices by price bands in Russia, supplier obtains different profits when selling gas to customers in various regions Gas supply to Russian consumers • Independent producers supply gas primarily to regions with high profitability, 100% while enjoying discounts to regulated prices. 15% 15% 17% 20% 24% 29% 80% Gazprom is displaced to low-profitable and unprofitable regions. • 60% • Government supported Gazprom’s initiative on transition to regulated prices by establishing price range with discount of up to 15% without differentiation by 85% 85% 83% 80% 40% 76% 71% regions 20% Transition to a new price regulation will allow Gazprom establishing a flexible • policy in gas prices for industrial consumers in Russia 0% 2008 2009 2010 2011 2012 2013 Gazprom Group's gas Independent suppliers' gas 5

Gas Prices in Russia, Europe, USA and Japan Average retail gas prices for domestic consumers Average gas prices for industrial consumers in Russia, in Russia, Europe and USA, 2013 (1,2) Europe and USA, 2013 (1,2) 1400 700 1,230 Japan (LNG) 1,152 1,129 1200 600 1,056 522 505 485 477 467 452 449 437 432 418 416 978 938 922 910 1000 500 USD/1,000 m 3 USD/1,000 m 3 NBP 777 800 400 341 680 Japan (LNG) 287 568 600 300 411 NBP 365 400 200 164 152 Henry Hub Henry Hub 200 133 100 (US) (US) 0 0 • Gazprom provides substantial support to national economy development by supplying gas at regulated prices. Russian gas prices are still lowest compared to Europe and USA. • Average gas prices for domestic and industrial consumers in USA and Europe are much higher than in major hubs. In Europe these prices also surpass Gazprom’s gas selling prices significantly. • In countries with advanced market economy gas prices for domestic consumers are much higher compared to prices for major industrial consumers. Source: CERA, IEA, EIA, FTS, Mosoblgaz. 1. Data for 2013, Turkey and EU av. for 6 months of 2013. 2. With account of gas distribution organization tariffs, payment for distribution and logistical support services, VAT included 6

Fluctuation of Gas Transmission Rates Rates for gas transmission via gas trunklines should be calculated using return on investment capital method Average rates for gas transmission services in Russia, Europe Average regulated service rates for third-parties gas and USA (1) transmission 10 10 8.92 EUR/thousand m 3 per 100 km EUR/thousand m 3 per 100 km 9 9 8 8 7.04 7 7 6 6 4.81 5 5 4 4 3.03 2.62 3 3 1.87 2.39 1.85 2.30 2.08 1.94 2.30 (2) 1.47 2 1.46 1.28 1.38 1.47 2 0.99 0.95 1.33 0.85 1 1 0 0 OpenGrid (Germany), 2014 HETPA (Germany), 2014 NETG (Germany) METG (Germany) DEDAN (Germany) WAG (Austria), 2013/2014 PW (Austria), 2013/2014 Slovakia, 2014 Czech Republic, 2013 Midcontinent Express Pipeline Fayetteville Express Pipeline Gazprom (Russia), 2013 2007 2008 2009 2010 2011 2012 2013 2014 TAG (Austria), 2013/2014 LLC (USA), 2014 (USA), 2014 • Rates for gas transmission via gas trunklines do not make up for capital investments into facilities for gas transmission to domestic market. In 2013 actual net margin for rendering gas transmission services to external • transmission operators totaled 1.2 %. Source: Company’s data • In 2014 there will be no indexation of transmission rates or regulated wholesale gas prices for industrial consumers. • At present Russian rates for gas transmission services are lower than From July 1, 2015 maximum possible rate growth will total 6%, from July 1, 2016 – 5%. • European and most American ones (3) . 1. Provided the maximum capacity load factor (load factor = 1) 2. Considering EUR vs. RUB rate growth 3. USA rates slightly differ among companies and account for an average of USD 1.4 to 6.4 for thousand m 3 per 100 km 7