GAZPROMS FINANCIAL AND ECONOMIC POLICY PRESS CONFERENCE Moscow - PowerPoint PPT Presentation

GAZPROM’S FINANCIAL AND ECONOMIC POLICY PRESS CONFERENCE Moscow JUNE 22, 2017

DISCLAIMER This presentation was prepared by Gazprom (hereafter “the Company”) . It contains corporate information for investors. This presentation does not constitute an offer to sell or a solicitation of any offer to purchase any shares or other securities for equity participation in the Company, or a subscription for such. The presentation and information contained herein, as well as the fact of the display or publication thereof, cannot be regarded in connection with any contract or investment decision. The information contained herein should not be construed as investment advice. The Company made every effort to ensure that the facts contained in this presentation would be reliable and the opinions voiced herein would be reasonable and impartial. However, no guarantees or assurances, either expressed or implied, are provided as to the accuracy and completeness of the information or opinions contained or reviewed herein on behalf of the Company or any of its shareholders, directors, officials, employees or any other persons. None of the Company’s directors, shareholders, officials, employees or any other persons assume any responsibility for any losses that may occur as a result of using this presentation or its contents in any form or in any other way relating to this presentation. This presentation may contain forward-looking statements. Such forward-looking statements include the following: the data that are not accomplished facts; statements of the Company’s intentions; and suggestions or current expectations in relation to, inter alia, the Company’s operating results, its financial condition and liquidity, prospects, growth, strategy, and development of the industry the Company operates in. Due to being related to future events and depending on the circumstances that may occur in the future, forward-looking statements inherently involve risks and uncertainties. The Company wishes to advise that it provides no guarantees for forward- looking statements to be realized and that the actual operating results, financial condition and liquidity, as well as the development of the industry the Company operates in, may differ essentially from the projections or suggestions contained or implied in the said forward-looking statements. Furthermore, regardless of whether the Company’s operating results, financial condition and liquidity, as well as the development of the industry the Company operates in, conform with forward-looking statements contained herein, such results and circumstances do not reflect the results and circumstances of the future periods. The data and statements contained in this presentation are relevant as of the time of its display and are subject to change without prior notice. No party is under legal obligation to update and amend the data contained herein. By attending this presentation, you agree to abide by the limitations mentioned above. 1 1 GAZPROM’S FINANCIAL AND ECONOMIC POLICY, JUNE 22, 2017

FUNDAMENTAL ASPECTS OF FINANCIAL POLICY Key developments in Gazprom’s financial Basic planning assumptions for 2017 budget performance throughout 2016 • Increased severance tax on natural gas USD 200 • Reduced revenue from gas sales (caused 166 167 by lower contract gas prices) offset by record gas exports 150 • Positive free cash flow (RUB 202 bln) 100 • Strong discipline with regard to capital 66.9 63.3 expenditures 48.0 42.0 50 • Dividends increase to RUB 190 bln in 2016 0 • 2016 2017 2016 2017 2016 2017 High level of corporate governance at actual budget actual budget actual budget Gazprom confirmed by Moscow Exchange GAS EXPORT PRICE OIL RUB/USD 2 GAZPROM’S FINANCIAL AND ECONOMIC POLICY, JUNE 22, 2017

GAZPROM GROUP’S KEY FINANCIAL INDICATORS RUB bln 6,073 6,111 5,590 6,000 4,000 1,963 1,875 2,000 1,322 952 787 159 0 (2) (3) (1) Revenue Adjusted EBITDA Net profit 2014 2015 2016 (4) Oil and gas prices, 2014-2017 % 120 100 80 60 40 20 1q14 2q14 3q14 4q14 1q15 2q15 3q15 4q15 1q16 2q16 3q16 4q16 1q 17 OIL NBP GAZPROM'S AVERAGE EXPORT PRICE FOR EUROPE (1) Net of excise tax, VAT and customs duties (2) EBITDA is adjusted by changes in asset impairment reserves (3) Annual profit attributable to Gazprom shareholders (4) Average quarterly figures 3 GAZPROM’S FINANCIAL AND ECONOMIC POLICY, JUNE 22, 2017

KEY INVESTMENT PROJECTS IN GAS BUSINESS Gazprom Group’s Investment Program for 2017 Other lines of business Gas business 3% Power generation 3% Gazprom’s investment program Gas business (RUB 911 bln) Oil 68% 26% Other lines of gas business Major projects under Gazprom’s Investment Program for 2017 BOVANENKOVSKOYE OIL, GAS AND RUSSIA CONDENSATE FIELD NORD STREAM 2 RUB 37 BLN RUB 111 BLN Ukhta POWER OF SIBERIA CHAYANDINSKOYE RUB 159 BLN St. Petersburg OIL, GAS AND UKHTA – CONDENSATE FIELD Torzhok TORZHOK 2 AMUR GPP RUB 64 BLN RUB 62 BLN RUB 102 BLN Moscow Greifswald (Germany) GERMANY Blagoveshchensk TURKSTREAM Anapa RUB 42 BLN MAJOR INVESTMENTPROJECTS CAPITAL INVESTMENTS IN 2017, RUB BLN Kiyikoy (Turkey) TURKEY CHINA 4 GAZPROM’S FINANCIAL AND ECONOMIC POLICY, JUNE 22, 2017

COST OPTIMIZATION FOCUS AREAS AND PRIORITIES FOR 2017 Major steps in restraining cost escalation Main cost optimization stages Scope of work Defining key development targets for Gazprom and scope of priority • • Strategic planning for 10-year period projects, building long-term financial model, and developing three development scenarios for Gazprom • Detailed analysis and design • Project development • Appraisal and optimization of project solutions • Setting limits for investment program and operating expenses • Gazprom’s 3 -year budget plan and • Ranking investment projects and preliminary approval thereof. Control of investment program claimed costs • Gazprom’s budget and investment program • Setting limits for investment program Approving investment program. Control of claimed costs for upcoming year • Control over project execution • • Project execution • Procurement optimization. Control over contract performance 5 GAZPROM’S FINANCIAL AND ECONOMIC POLICY, JUNE 22, 2017

WELL-BALANCED COST MANAGEMENT POLICY Cost optimization (reduction) program, 2016 – 2017 Prime cost of gas production * RUB /1,000 m 3 1,896 2000 1,601 1,549 1,436 1600 Effec ect t from Progr gram in 2016: 6: RUB 19.7 7 bln: 1,233 991 722 1200 677 • Operating activities: 719 602 800 current costs: RUB 9.8 bln 880 906 872 400 717 financial costs: RUB 1.2 bln 631 0 • Investment activities: RUB 8.7 bln 2013 2014 2015 2016 2017P UNIT COST OF GAS PRODUCTION SEVERANCE TAX FOR GAS** Prime cost of gas transmission *** Foreca cast t effect fect from Progr gram in 2017: 7: RUB 12 12.2 2 bln: RUB /1,000 m 3 per 100 km 80 70 65 65 • Operating activities: 57 60 53 current costs: RUB 6.9 bln 40 financial costs: RUB 0.2 bln 20 Investment activities: RUB 5.1 bln • 0 2013 2014 2015 2016 2017P * Prime cost of gas production – costs for production of 1,000 m 3 of gas by 7 major gas producing subsidiaries of Gazprom ** Average severance tax rate for taxable volume of gas production *** Prime cost of gas transmission – costs for transmission of 1,000 m 3 of gas per 100 km by Gazprom’s gas transmission subsidiaries (within Russian Federation) 6 GAZPROM’S FINANCIAL AND ECONOMIC POLICY, JUNE 22, 2017

TAX PAYMENT STRUCTURE Tax payment by Gazprom Group’s companies (RUB mln) Tax payments in 2016 2015 2016 12% Customs duties 693,746 617,788 6% 31% 5% Severance tax 599,433 601,985 Excise tax 219,105 236,892 Property tax 110,123 120,391 3% 31% 12% Profit tax 104,729 95,576 VAT 27,586 53,771 НДПИ VAT НДС Severance tax Customs duties Акциз Excise tax Таможенные пошлины Others 191,942 240,048 Налог на прибыль Profit tax Налог на имущество Property tax Total: 1,946,664 1,966,451 Прочие Others 7 GAZPROM’S FINANCIAL AND ECONOMIC POLICY, JUNE 22, 2017

CHANGES IN SEVERANCE TAX FOR NATURAL GAS PRODUCTION BY GAZPROM GROUP Q3-Q4 2016 - 2015 Q1-Q2 2014 Q1-Q3 2017 Q4 2017 2014 Fixed severance tax Introduction of formula-based Upward revision of Upward revision of Cgp Upward revision of Cgp rate for Gazprom severance tax. Single withholding withholding ratio in severance coefficient in severance coefficient in severance ? Group ratio for Gazprom Group and tax formula for gas and tax formula for gas tax formula for gas independent producers: condensate produced by produced by Gazprom produced by Gazprom RUB 700 / 1,000 m 3 Gazprom Group: Group: Group: • 0.15 with no time limit • 0.2051 in 2016 • 1.7969 in 2017 • 2.2738 in Q4 2017 • 1.4022 in 2018 • 1.4441 in 2020 • 1.4441 in 2019 1,063 0.8 1000 Average rates, RUB / 1,000 m 3 910 891 0.7 2014 scenario 1,001 809 0.6 800 722 719 677 2016 scenario 611 0.5 586 557 563 531 600 0.4 2017 initial scenario 0.3411 0.3 400 0.2695 2017 updated scenario 0.2166 0.2166 0.2103 0.2051 Withholding ratio 0.2 0.15 0.15 200 0.1 0 0 2014 2015 2016 2017 2018 2019 2020 8 GAZPROM’S FINANCIAL AND ECONOMIC POLICY, JUNE 22, 2017