Gazprom Updates Investment Program for 2008

The Management Committee has approved the updated draft investment program and budget of Gazprom for 2008.

Pursuant to the draft investment program, the total amount of developed investments will come to RUB 821.66 bln, which is RUB 111.53 bln up compared the investment program, which was approved in December 2007. At the same time, the capital investments will account for RUB 531.2 bln, long-term financial investments, RUB 290.46 bln.

According to the draft budget, the overall cash income & revenues will equal RUB 3.236 trln, which is RUB 311 bln more as compared to the budget approved in December 2007. The total amount of cash liabilities, expenditures and investments will increase by RUB 366 bln and come to RUB 3.38 trln. The amount of financial borrowings will remain unchanged at RUB 90 bln.

The net surplus will total RUB 1.7 bln.

The investment program update is driven, in particular, by the adjustment of investment projects list and the volume of investments for 2008. These were performed taking into account Gazprom’s operating results for 2007 and adjustment of the implementation terms of a number of new projects in Eastern Siberia and the Far East including the pilot commissioning of the Chikanskoye gas and condensate field, gas delivery to the Kamchatka Peninsula and Vladivostok, boosting of the Bovanenkovskoye field development and the new Obskaya-Bovanenkovo railroad construction.

The requirement to update the investment program is also conditioned by the share acquisition in some energy companies, investments into the Shtokman field development and the Nord Stream gas pipeline construction projects as well as by Gazprom’s participation in the Sakhalin II project. Additionally, the update is explained by acquisition of the license for the Chayandinskoye field development.

The budget profiles adjustment is conditioned by a change in quantitative and pricing indicators of gas selling as well as in macroeconomic indicators.