Report by Dmitry Medvedev, Gazprom’s Board of Directors’ Chairman on the upcoming liberalization of Gazprom’s share market

Prior to addressing the topical matters, let me touch upon the upcoming liberalization of Gazprom’s share market and related aspects.

On 16 June 2005, Gazprom’s Board of Directors unanimously endorsed the sale of its subsidiaries-held 10.74% stake to the state-owned Rosneftegaz company.

I’d like to make an official statement and inform you that all the deals have so far been closed and all the legal documents have come into force.

As it has been announced earlier, the state-owned controlling stake in Gazprom opens way to lifting all the restrictions on the corporate stock trading.

The liberalization process is expected to be completed by this year’s end.

In accordance with the legislative documentation, we’re counting on nowadays, a string of measures are needed to make the liberalization a reality. In particular, amendments are needed for the Gas Supply in the Russian Federation Law and subordinate legislation, with their full or partial revocation inclusive. All this will signify the abolishment of foreign shareholding quotas in Gazprom and the permission for trading in the corporate stock on all the stock exchanges. Thus, the shares will have a common reasonable price that will reflect its real fundamental value. We believe that Gazprom’s capitalization growth will enable the Company to gain beneficial access to new financing sources for the purpose of meeting corporate needs, implementing its development plans and, thus, achieving all the shareholder-related objectives.

The Company’s Board of Directors and Russian Government are strongly positive that Gazprom’s share market liberalization will be both a crucial and challenging event for Gazprom and a fundamental step forward towards the entire Russian stock market development.

To meet all the liberalization-related challenges, the Government and Gazprom will set up a Working Group to be tasked with overseeing and coordinating activities in said direction as well as agreeing on the publication of due documents.

The Company will keep everybody (the shareholders inclusive) up-to-date on the progress in the corporate stock liberalization.