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

The Board of Directors took into account the information on the progress in the contract campaign underway as part of the 2009 Investment Program execution and considered the procurement issues.

The Management Committee was entrusted with furthering the activities targeted at cost reduction when conducting the contract campaign within the 2009 Investment Program implementation.

Background:

On December 23, 2008 Gazprom’s Board of Directors approved the Investment Program for 2009, under which total investments will be RUB 920.44 billion, capital investments – RUB 699.88 billion, long-term financial investments – RUB 220.56 billion.

At present, Gazprom is engaged in optimizing its orders portfolio for equipment and materials. Additionally, the work is underway to reduce the value of procurement arrangements for 2009. The work is done in four stages as follows: defining the price limit, considering competitive bids, entering into agreements with successful bidders and issuing specifications prior to the fulfillment of an order. The arrangements inked before September 2008 are being adjusted to make them match the levels of forecast prices for 2009.

On December 23, 2008 the Board of Directors approved the changes in the Provision on preferentially contest-based awards of contracts for the supply of goods, completion of works and rendering of services for Gazprom and its subsidiaries. Under the changed provision the suppliers of domestic goods will be granted additional preferences through 2010 when contracts are awarded for the supply of goods for Gazprom Group.

Based on the results of the first quarter of 2009 the share of domestic equipment in the volume of Gazprom’s orders is projected to exceed 92 per cent of the total.

Additionally, the Company has elaborated a detailed plan of actions aimed at optimizing costs within the Investment Program for 2009. The said actions are supposed to give both a direct effect to be reflected in cost reduction and an indirect effect due to the optimization of managerial decisions.