The Severnoye Siyaniye (Northern Lights) semi-submersible drilling rig (SSDR) has been delivered to the Yuzhno-Kirinskoye field in the Sakhalin shelf. The Polyarnaya Zvezda (Polar Star) SSDR was the first to arrive in the Kirinskoye field. The offshore drilling rigs are owned by Gazprom and built on the Company's order by the Vyborg Shipbuilding Plant.

The drilling rigs made a successful trip of nearly 550 nautical miles from the Kholmsk Port across the La Perouse Strait into the Sea of Okhotsk.

Polyarnaya Zvezda will continue the construction of production wells launched last year. It is projected to finalize the second well with a depth of over 3,600 meters in a three-and-a-half month's period during the 2013 season. This drilling rig will also build the third well next year.

The first production well at the Kirinskoye field will be connected to a gas gathering system this summer and the first gas will be produced by Gazprom in autumn. Production rates will climb as more wells (six in total) are put onstream.

Gazprom is implementing a rapid exploration program at the Yuzhno-Kirinskoye field – exploratory drilling is underway to determine the geological structure and estimate the reserves.

The Severnoye Siyaniye SSDR will build and test a 3,200 meter exploratory well during four and a half months of this season. Thereafter, the Korean Doo Sung SSDR leased by Gazprom will arrive in the field to drill another well to the depth of nearly 2,900 meters.

Gazprom plans to build another two exploratory wells at the Yuzhno-Kirinskoye field in 2014. The Company expects to increase the gas and condensate reserves through exploration activities.

Background

Sakhalin shelf is one of the main sources of gas supplies to consumers of the Russian Far East. Gazprom operates in three blocks within the Sakhalin III project: Kirinsky, Ayashsky and Vostochno-Odoptinsky. The Kirinsky block includes the Kirinskoye field and Gazprom also discovered there the Yuzhno-Kirinskoye and Mynginskoye gas and condensate fields.

The Kirinskoye gas and condensate field is located 28 kilometers off the coast at a water depth of 90 meters. Geological exploration operations were completed at the field in 2011. All reserves are within the C1 category and total 162.5 billion cubic meters of gas and 19.1 million tons of gas condensate.

The Yuzhno-Kirinskoye gas and condensate field's C1+C2 reserves amount to 563.9 billion cubic meters of gas and 71.7 million tons of gas condensate.