Within the frame of the official visit paid by Dmitry Medvedev, President of the Russian Federation to Venezuela, Alexander Medvedev, Deputy Chairman of the Gazprom Management Committee and Rafael Ramirez, Venezuelan Energy & Mines Minister, President of Petroleos de Venezuela SA (PdVSA) signed an Agreement on joint examination of the Ayacucho 3 block in the Orinoco Oil Belt.

Once signed, the Agreement means the commencement of the second stage of operations at the Ayacucho 3 block and follows the Agreement on evaluation and certification of the reserves entered into in July 2008.

The work being carried out under the new Agreement will result in a Feasibility Study. On the basis of the Study the parties will be able to obtain permissions from the National Assembly of Venezuela to set up a joint venture for oil production at the block.

Background:

The exclusive right to produce natural gas is being held by the Venezuelan state-run oil and gas company Petroleos de Venezuela SA (PdVSA).

Gazprom operates in Venezuela under the Memorandum of Understanding signed with PdVSA in January 2005.

In August 2005 Gazprom was proclaimed the winner of a tender for Phase A of the Rafael Urdaneta project and was awarded the natural gas exploration and development licenses for the Urumaco 1 and Urumaco 2 blocks in the Gulf of Venezuela.

In accordance with the bidding rules for Urumaco 1 and Urumaco 2, Gazprom set up two joint-stock companies UrdanetaGazprom – 1, SA and UrdanetaGazprom – 2, SA. The potential natural gas reserves of these blocks average 100 bcm.

Furthermore, Gazprom signed with the Venezuelan party contracts to elaborate the General Scheme for the gas industry development in Venezuela and conduct activities related to imaging creation for the first stage of the South American gas pipeline.

On July 22, 2008 Gazprom and PdVSA signed the Agreement on evaluation and certification of the Ayacucho 3 block reserves.

Pursuant to the Agreement, a Gazprom subsidiary, Gazprom Latin America B.V., will jointly with PdVSA complete geological modeling, evaluation and assessment of the block reserves before the end of 2008,  to be subsequently certified by an independent auditor.