The Board of Directors’ meeting is underway at the Gazprom Headquarters.

The Board of Directors heard a report on the condition of the Gazprom commodity risk management and monitoring system and the progress with the work aimed at improving it.

The Management Committee was entrusted with further shaping the corporate risk management system.

Reference:

Gazprom is a prominent producer and exporter of commodities in the Russian Federation. Commodity risk detection, assessment and management are of crucial significance for the Company’s operations.

The present-day activities in this area have enabled to either eliminate or substantially reduce a number of large commodity risks, with, inter alia, the natural gas payment discipline practically restored, a considerable portion of old debts recovered, a transition to market based gas prices for the CIS and Baltic States being effectuated and gas export routes being diversified. A significant increase of proceeds from gas supply both to the internal and external markets has pointed, amongst other things, to the said work efficiency.

At the same time, the actions to achieve the strategic goal of converting Gazprom into a global energy market leader as well as a varying environment for the Company’s operations in Russia and abroad have pushed changes in a pattern of risks faced. In this regard, from 2005 Gazprom has been active in creating a Corporate Risk Management System (CRMS) in line with the world’s best practices. Upon introduction CRMS will have a positive impact on Gazprom’s market positions, financial standing and capitalization.

The CRMS creation process is divided into three stages:

1. CRMS concept development;
2. Detailed CRMS development;
3. CRMS introduction.

Stage 1 is completed, with a general profile of Gazprom’s risks obtained; conceptual approaches to CRMS creation developed; risk monitoring of Gazprom’s major projects arranged; internal risk management related structures being shaped, etc.