The Gazprom Board of Directors took notice of the information on the Company's preliminary operating results of 2012, projected Investment Program, Budget (Financial Plan) and Cost Optimization (Reduction) Program for 2014–2015.

The Board of Directors approved Gazprom's Investment Program, Budget (Financial Plan) and Cost Optimization (Reduction) Program for 2013.

Pursuant to the Investment Program for 2013, the total amount of investments will make up RUB 705.41 billion. At the same time, the amount of capital investments will account for RUB 658.455 billion, of which RUB 655.158 billion and RUB 3.297 billion will be allocated for capital construction and acquisition of non-current assets accordingly. The amount of long-term financial investments will total RUB 46.955 billion.

According to the approved Budget for 2013, revenues and gains will total RUB 5.101 trillion while liabilities, expenditures and investments – RUB 5.251 trillion. External financial borrowings are determined at RUB 90 billion. The budget surplus will make up RUB 0.5 billion.

The Cost Optimization (Reduction) Program for 2013 envisages measures aimed at cost optimization (reduction) to result in a cumulative effect of RUB 14.4 billion.

Background

Pursuant to the 2013 Investment Program, priority in capital construction costs allocation will be given to the following gas production projects: pre-development of the Bovanenkovskoye, Medvezhye, Urengoyskoye, Yamburgskoye and other fields.

The gas transmission priorities will include construction of the Bovanenkovo – Ukhta and Ukhta – Torzhok gas trunkline systems as well as the Gryazovets – Vyborg gas trunkline and implementation of the Southern Corridor project.

The key projects in Eastern Russia are pre-development of the Kirinskoye field and construction of the gas trunkline connecting the Kirinskoye gas condensate field OPF to the Sakhalin main compressor station.

Funds will also be channeled for upgrading the major gas production and transmission assets, re-equipping underground gas storage facilities, constructing and retrofitting gas processing capacities as well as performing survey, geological exploration and production drilling in fields.

The 2013 Investment Program also envisages allocation of funds for Gazprom's projects as part of the Russian Government endorsed Program for Construction of Olympic Venues and Development of Sochi as a Mountain Climate Resort.

The long-term financial investment plan for 2013 prioritizes, inter alia, Gazprom's participation in construction of the South Stream gas pipeline as well as financing of projects in Africa, Bolivia, the UK, the Republic of Vietnam, Latin America and Uzbekistan.