The Gazprom Board of Directors approved the Company's activities to arrange pre-development of the Chayandinskoye and Kovyktinskoye fields and took notice of the information regarding their development prospects.

The Management Committee was tasked to inform the Board of Directors on the interim results of these activities in the fourth quarter of 2013.

Background

The Chayandinskoye and Kovyktinskoye fields are the cornerstones of the Yakutia and Irkutsk gas production centers, respectively, as part of the state-run Development Program for an integrated gas production, transportation and supply system in Eastern Siberia and the Far East, taking into account potential gas exports to China and other Asia-Pacific countries (Eastern Gas Program). The program was approved in September 2007 by the Ministry of Industry and Energy of the Russian Federation. Gazprom was appointed by the Russian Government as a focal point for its implementation.

In Eastern Russia new gas production centers were created in Sakhalin and Kamchatka, shaping of the Yakutia gas production center is underway, the Irkutsk and Krasnoyarsk centers are the next.

On October 30 Gazprom Management Committee adopted the final investment decision on pre-development of the Chayandinskoye field, construction of the Yakutia – Khabarovsk – Vladivostok gas trunkline as well as gas processing facilities in Belogorsk. It is projected to bring into production the oil rim in 2014 and the gas deposit – in 2017. During the plateau period the field will annually produce up to 25 billion cubic meters of gas and at least 1.5 million tons of oil.

Gas production in Yakutia will evolve as a unified complex with production in the Irkutsk Region on the basis of the Kovyktinskoye field whose resources will be put into production at the next stage. A common gas transmission system will be created for these centers. The Yakutia – Khabarovsk – Vladivostok gas pipeline will comprise the first part of the system.

A vast resource base in Eastern Russia, sustained formation of large gas production centers and building of necessary transmission corridors will make it possible to establish there a new Russian gas export center geared to the Asian-Pacific region. An LNG plant planned to be constructed in Vladivostok is Gazprom's high-priority project for which the investment rationale will be completed before year end. The launch of the Chayandinskoye field pre-development and the project for building the Yakutia – Khabarovsk – Vladivostok gas trunkline made it possible to start negotiating the eastern route with China in addition to the western route.

As part of the ongoing exploration at the Chayandinskoye field, the information is being updated on the geological structure, formation geometry and the degree of pay zones saturation. More than a half of gas reserves have been classified as explored. The full complex of geological exploration is planned to be accomplished by 2015. In the next three years it is projected to drill more than twenty prospecting wells and to conduct 3D seismic surveys covering 3,700 square kilometers.

The geological exploration project is being elaborated at the Kovyktinskoye field. Before 2016 it is planned to perform 3D seismic surveys over the area of 1,300 square kilometers, drill more than ten exploratory wells. R&D activities will be carried out including testing of the helium extraction technology.