The Management Committee has approved the updated draft budget (financial plan) and investment program of Gazprom for 2006, taking into account information on the consolidated Gazprom and Sibneft budget for 2006.

The updated draft budget and investment program are pending endorsement by the Board of Directors.

Under the draft budget, overall income & revenues (taking into consideration the account balance as of the start of the reporting period) will stand at RUR 2,160.9 bln, RUR 270.6 bln up on the budget version endorsed in February 2006. Total expenditures will account for RUR 2,250.1 bln. Financial borrowings will remain unchanged totaling RUR 90 bln. The budgetary surplus at the end of 2006 is projected at RUR 0.85 bln.

The need of making amendments in the budget has been driven by macroeconomic changes (US dollar rate), conjunctural changes (growth of hydrocarbon prices) and a number of production & financial forecasts made by the Company.

Under the draft investment program, capital investments will grow RUR 29.5 bln to RUR 307.9 bln with long-term financial investments shrinking RUR 27.1 bln to RUR 337.2 bln.

Boosting capital investments mainly stems from the need of commissioning major production and transmission facilities, under a Plan of synchronized priority infrastructure commissioning inclusive.

Reference:

When drafting its investment program for 2006, Gazprom has taken into account the following key development targets:

• 548 bcm of gas production;
• 200 bcm of gas exports including 151 and 286.3 bcm to foreign and domestic consumers, respectively;
• providing the reliability and technological safety of the core businesses;
• maintaining the required level of gas reserves.

The top business priorities of Gazprom are as follows:

• building up gas, condensate and oil reserves as scheduled;
• commissioning prominent facilities incorporated in the capital construction projections for 2006;
• initiating construction of key facilities to be brought into operation in 2007;
• debottlenecking the United Gas Transmission System;
• upgrading core gas extraction capacities;
• performing design and survey works for prospective investment projects.

The Gazprom 2006 investment program encompasses the most crucial investment projects including those aimed at:

• extracting gas (developing the Bovanenkovskoye, Kharasaveyskoye, Yety-Purovskoye, Vyngayakhinskoye, Yen-Yakhinskoye, Urengoyskoye, Zapolyarnoye, Yamburgskoye and other fields);
• constructing and upgrading gas transmission capacities including the North European, Northern Tyumen Region – Torzhok and Yamal-Europe gas pipelines, expanding the Urengoy gas transmission hub, etc.;
• creating underground gas storage capacities;
• creating gas processing capacities.

In 2006 Gazprom is resolute to bring on stream 1,444.01 km of gas mains and branches, 15 compressor stations within gas pipelines and underground gas storage facilities with 993 MW in total capacity and a gas treatment unit. 167 wells will be hooked up on gas fields and 17 wells - at UGS depots.

Capital investments are mainly intended for gas production & transmission projects with transmission projects to be funded with 60 per cent of the total investment.