2005
On January 14, within the visit of Alexey Miller, the Gazprom Management Committee Chairman to Mexico and the negotiations with Fernando Barragan, Mexican Energy Minister, the parties achieved accords on addressing possible liquefied natural gas deliveries to Mexico, to be followed by its transportation to the USA. The parties discussed potential interaction in Mexico’s gas infrastructure development and sci-tech cooperation & experience sharing as well as in joint gas field exploration and development, including in the Mexican Gulf offshore.
On January 15, within the visit of Alexey Miller, Chairman of the Gazprom Management Committee to Venezuela, Gazprom and Petroleos de Venezuela SA (PDVSA) signed the Memorandum of understanding. The Memorandum outlines joint businesses in the energy sector: gas field exploration & development, oil & gas transmission infrastructure development, gas deliveries, natural gas processing, innovative technology introduction and staff training. The parties also agreed to explore potential natural and liquefied gas shipments from Venezuela to third countries.
On January 17, Alexey Miller, Chairman of the Gazprom Management Committee and Vyacheslav Pozgalev, Governor of the Vologorod Oblast signed the Agreement for gasification for a five-year period.
In January, the Executive Board resolved that, starting 2006, the UNECE Gas Centre would be chaired by a Gazprom representative.
On January 27, the Management Committee has considered questions concerning organization of work to prepare the Annual General Meeting of the Company’s shareholders. The Management Committee has decided to make a proposal for consideration by Gazprom’s Board of Directors to conduct the General Meeting of the Company’s Shareholders on June 24, 2005 in Moscow. The proposal to compile the list of persons having right to participate at the shareholders’ meeting on the basis of the record of the shareholders as of the end of the operational day – May 6, 2005 was submitted. The Management Committee has approved: the staff of the Commission to arrange and conduct the Annual Shareholders’ Meeting chaired by Mikhail Sereda, Deputy Chairman of the Management Committee and Head of the Gazprom Management Committee Administration; arrangements to prepare and conduct the Meeting; measures to compile and issue Gazprom’s Annual Report for 2004.
On January 29, Alexey Miller, the Gazprom Management Committee Chairman convened a meeting dedicated to the corporate governance structure enhancement. The participants summarized the progress in the preparations for the 2nd stage of the Company’s restructuring and reviewed proposals by a Working Group on a feasibility study and legal documentation for the reforms as well as on social packages for Gazprom’s employees. The projected intra-corporate innovations stipulate the foundation of separate gas production and transmission subsidiaries to be cleared of non-core business. This move is expected to foster the transparency of gas transmission expenses as well as their objective disclosure when setting regulated gas transmission tariffs.
On February 3, Gazprom and the Krasnoyarsk Krai Administration signed the Agreement for cooperation until 2009.
On February 4, the Board of Directors decided to convene Gazprom’s Annual General Shareholders’ Meeting on June 24, 2005 in Moscow. The Board simultaneously approved the list of persons and legal entities entitled to take part in the Shareholders’ Meeting as well as a list of nominees for Gazprom’s Board of Directors and Auditing Commission to be voted for at the Shareholders’ Meeting, draft Agenda of the Meeting and etc.
On February 5, the visit of a Gazprom’s delegation to Uzbekistan resulted in signing contracts between Gazprom and Uztransgaz to transit Central Asian gas via Uzbekistan and to acquire a total of 5 bcm of Uzbek gas in 2005. Additionally, the parties reached an accord to expand Russia and Uzbekistan’s joint businesses in the gas industry, as stipulated by a Strategic Cooperation Agreement. In particular, the parties decided to set up joint working groups that would be intensively involved in implementing the Central Asia – Center gas transmission network development project, producing a long-term gas transmission via Uzbekistan contract and preparing a Production Sharing Agreement to develop Uzbekistan’s Ustyurt fields.
On February 7, Gazprom and Gasum (Finland) signed the Agreement to extend the Prime Contract for Russian natural gas exports to Finland through December 31, 2025. The Agreement also emphasizes the substantial increase (by over 15 per cent) in gas shipments to Finland, with a 6 bcm/y level to be reached by 2008.
On February 16, Gazprom placed the A4 RUR 5 bln bonds with a RUR 1,000 face value and 5-year maturity.
On February 16, within the visit of a Gazprom’s delegation to Kazakhstan, the parties signed a Protocol identifying key joint businesses in the aforementioned sectors and fixing the terms and conditions for Central Asian gas transit via Kazakhstan in 2005.
On February 21, ONGC Group and Gazprom signed the Memorandum of understanding. The Memorandum stipulates that parties will study the prospects of joint participation in the projects for oil and gas production in India, Russia and third countries, gas transmission and products marketing on the markets of India and third countries. Gazprom and ONGC Group will also examine opportunities for LNG deliveries on the Indian market and third countries.
On February 22, the Board considered information on the work being done to improve the Regulations for independent gas producers’ access to Gazprom’s gas transmission network (GTN). Over the 1st quarter of 2005, the Management Committee was entrusted with completing and endorsing the amended Guidelines for the independent gas producers’ access to Gazprom’s GTN licensing, with emphasis on simplified rules of access as well as working through financial and legal documentation stipulating independent gas producers’ involvement in expanding and upgrading Gazprom’s gas transmission capacities.
On February 22, the Board of Director approved Gazprom’s Corporate Data Disclosure Guidelines prepared in accordance with the Company’s Corporate Governance (Behavior) Code. The Guidelines highlight the procedure of the corporate operating data disclosure and distribution to shareholders and other interested parties in pursuance of the RF legislation and Gazprom’s intra-corporate documentation. To be put into practice by the Management Committee, the Document is targeted at fostering Gazprom’s openness and transparency.
On February 28, Gazprom and the Yaroslav Oblast Administration signed the Agreement for cooperation for a five-year period.
On March 3, within the Gazprom’s investment optimization plan Alexey Miller, the Gazprom Management Committee Chairman issued a directive to establish an Investment and Construction Department as a core business unit within the parent company. The Investment and Construction Department was tasked with forming an integrated investment chain: investment priority identification; investment underpinning and decision making; investment and procurement planning; coordination with budget planning; the customer’s obligations; the builder’s commitments and supply security. To be planned at an earlier (designing) stage, the procurement process will make it possible to identify certain technological contest-based solutions.
On March 16, in Munich, Alexey Miller, Chairman of Gazprom Management Committee and Klaus Kleinfeld, President and CEO of Siemens AG signed the Agreement for strategic partnership. The document regulates bilateral cooperation, including implementation of new Gazprom's projects, such as North European gas pipeline construction, the Yuzhno-Russkoye gas field development, gas transportation system development outside Russia, and projects in electricity generation.
On March 18, Gazprom and the Novgorod Oblast Administration signed the Agreement for cooperation for a five-year period.
On March 22, Gazprom and the Pskov Oblast Administration signed the Agreement for cooperation and the Agreement for gasification.
On March 27, A Gazprom’s delegation visit to Egypt resulted in signing the Memorandum for cooperation development between Gazprom and EGAS. The document stipulates the cooperation of companies for the project development in the oil and gas sector including LNG.
On March 29, Gazprom and the Kaliningrad Oblast Administration signed the Agreement for cooperation for a five-year period.
On March 29, Gazprom and the Leningrad Oblast Administration signed the Agreement for cooperation in 2005.
On March 29, Gazprom and Lukoil signed the General Agreement on strategic partnership over 2005 to 2014. Under the Agreement, the parties are intent on jointly implementing oil and gas field exploration and development projects in the Yamal-Nenets Autonomous Area (YaNAA), Nenets Autonomous Area (NAA), Russian Caspian Sea, Republic of Uzbekistan and other regions. Gazprom and LUKOIL also agreed to promote cooperation in oil and gas condensate marine transportation from the northern NAA and YaNAA.
On March 30, the Board endorsed the Gazprom’s Cost Management Conception. The Conception is largely focused on ensuring efficient use of resources, enhancing soundness and quality of the decision-making process, coming up with full, comparable and transparent cost data as well as delegating authority and responsibility for the efficient use of resources at various management levels. Implementing the new Conception will raise Gazprom’s business efficiency and transparency.
In the beginning of April, in Budapest, Ferenc Gyurcsany, Prime Minister of the Republic of Hungary 30-year anniversary of Russian natural gas deliveries to Hungary awarded Alexey Miller, Chairman of the Gazprom Management Committee with the 2nd Class Order of the Hungarian Republic Cross for his outstanding services to the energy cooperation.
On April 11, in Hanover, in the presence of the Russian Federation President Vladimir Putin and German Federal Chancellor Gerhard Schroeder, Alexey Miller, the Gazprom Management Committee Chairman and Dr. Jurgen Hambrecht, Chairman of the Board of Executive Directors of BASF AG have inked a Memorandum of understanding. In pursuance of the Memorandum, Gazprom will increase its share in the Russian-German joint venture WINGAS. The firms will deepen cooperation in gas geological exploration and production in Russia and other countries, in particular, in the Yuzhno-Russkoye field joint development. The Memorandum stipulates potential involvement of other West European companies capable to make a substantial contribution into the project implementation. The Memorandum fixes an agreement prescribing WINGAS’ participation in the North-European gas pipeline (NEGP) construction. WINGAS is projected to link NEGP with the German gas pipeline network. At the same time, the parties agreed to jointly implement international energy projects.
On April 25, Alexey Miller, Chairman of the Gazprom Management Committee, and Donald Felsinger, President of Sempra Energy, a US company, signed the Memorandum of understanding. The document stipulates conducting of studies on possibilities of using Sempra Energy’s terminals as re-gasification facilities in order to sell Russian gas in the USA.
On April 26, Gazpromavia – a wholly owned subsidiary of Gazprom – celebrates its 10th anniversary. In the ten years of its operation, Gazpromavia has made a significant contribution in the industry’s development, turning itself into the largest national corporate air transportation company and securing a place within the top ten air transportation companies in Russia. Gazpromavia provides cargo transportation, passengers and personnel transportation, monitoring of trunk pipelines and servicing of gas pipeline infrastructure for the gas industry.
On April 26, Alexey Miller, Chairman of the Gazprom Management Committee, and Yury Osipov, President of the Russian Academy of Sciences (RAS), signed the Scientific and technological cooperation agreement for 2005-2008 at the Gazprom Headquarters. The Coordination council on RAS’ scientific research for Gazprom to implement the Agreement representing experts from the two organizations was set up.
On April 27, Gazprom and the authorities of the Republic of Karelia signed the Agreement for cooperation for a five-year period.
On April 27, the Board of Directors approved the Major Guidelines for the investment projects implementation through project financing. The Board entrusted the Management Committee with selecting and preparing projects for implementation under project financing terms, including the development of intra-corporate documents and a range of procedures targeted at the effective control over the project implementation.
In the beginning of May, Gazprom is taking a non-secured syndicated US$ 972 mln loan intended for the refinancing of borrowings made by the Company between 2003 and 2004. ABN AMRO is acting as the book runner on the transaction. As a result, Gazprom won’t need to collateralize one of its export contracts and will save US$ 18 mln in debt servicing expenses.
On May 12, Gazprom and Administration of the Komi Republic signed the Agreement for cooperation foe a five-year period and the Agreement for cooperation from 2005 to 2007.
In the middle of May, Gazprom acquired a 100 per cent stake of Irkutskgazprom from Vostokgazprom. Irkutskgazprom, a Gazprom vanguard in the Irkutsk region, will be tasked with implementing Gazprom’s local projects, hydrocarbon field localization, exploration and development projects inclusive.
On May 13, in Vienna, Gazexport, RAG and WINGAS GmbH inked a Contract to construct underground gas storage (UGS) facility at the Haidach field (Salzburg, Upper Austria). Due 2007 and to be the largest in Austria and the second-largest in Central Europe, the Haidach UGS facility will have 2.4 bcm in maximum throughput, which is roughly 30 per cent of the overall annual gas consumption in Austria.
On May 15, in Vienna, Gazprom, Gazexport and OMV AG entered into a new long-term Agreement on natural gas supply to West Europe by the West Austria Gasleitung (WAG) gas pipeline. Valid over 20 years (from 2007 through 2027), the Agreement stipulates some 4.4 bcm/y of Russian gas to be delivered from the Slovak border (Baumgartner vicinity) via Austria to the German border (Burghausen vicinity). For these purposes, WAG will be substantially expanded through some EUR 260 mln in investments by OMV.
On May 17, the Board endorsed the time and venue of the Annual General Shareholders’ Meeting (to be called to order on June 24, 2005) as well as the Shareholders’ Meeting Agenda and the Board Members as the Shareholders’ Meeting Presidium, the Draft Annual Report and Dividends etc. The Board approved and introduced the draft changes and additions for the Board of Directors’ charter to the Annual Shareholders Meeting.
On May 17, Gazprom’s Board of Directors agreed on the acquisition of the North Transgas OY 50 per cent stake owned by Fortum Heat and Gas OY. Upon the deal execution, Gazprom’s share in the authorized capital of North Transgas OY will grow from 50 to 100 per cent. Increasing Gazprom’s stake in North Transgas OY is driven by the commencement of the North-European gas pipeline (NEGP) construction.
On May 17, Gazprom and the Penza Oblast Administration signed the Agreement for cooperation for a five-year period.
On May 24, Gazprom and the Bryansk Oblast Administration signed the Agreement for cooperation for a five-year period.
On June 6, Gazprom issued its audited statutory consolidated financial reports for the year 2004. In 2004 net sales of natural gas increased by RUR 119,989 mln, or 19 per cent, to RUR 767,458 mln compared to 2003.
On June 7, Gazprom and the Ryazan Oblast Administration signed the Agreement for cooperation for a five-year period.
On June 7, Gazprom and the Mari El Republic authorities signed the Agreement for cooperation for a five-year period.
On June 10, Gazprom and the Kalmykia Republic authorities signed the Agreement for cooperation and the Agreement for gasification for a five-year period.
On June 10, Gazprom, Urengoygazprom and Nortgaz’s shareholders have sealed a legally binding Agreement stipulating: conveyance by Nortgaz’s shareholders of the 51 per cent stake in Nortgaz to Urengoygazprom; mutual settlement of all legal and other controversies between the parties; joint management of Nortgaz for the purpose of enhancing its market capitalization.
On June 17, the Gazprom Management Committee has approved the Corporate Intellectual Property Management Conception. The document stipulates that efficiently managing the corporate intellectual property was a major component of Gazprom’s activities ensuring the implementation of the strategic national policy aimed at shifting over to the country’s new development and improving the Company’s bottom lines.
On June 20, within the official visit of the Norwegian Prime Minister Kjell Magne Bondevik to the Russian Federation, Alexey Miller, the Gazprom Management Committee Chairman, Helge Lund, Statoil’s President & CEO and Eivind Reiten, Hydro’s President and CEO have sealed a Memorandum of understanding. The Memorandum stipulates joint endeavors to discover hydrocarbon prospects in the Arctic, to develop technologies for the commercial operation of the Arctic offshore, look into the oil & gas extraction impact on the regional social & economic development and environment, exchange workforce, train specialists and develop internship programs. The Memorandum will be put into life by a tripartite Joint Committee to be comprised of Gazprom, Statoil and Hydro’s representatives.
On June 23, Rosneftegaz and Gazprom’s subsidiaries (Gazprombank, Gazprominvestholding, Gazfond and Gazprom Finance BV) clinched the deals on purchase & sales of Gazprom’s 2,542,500,000 shares, which is 10.7399 per cent of the Company’s authorized capital. The transactions will be settled in three trenches, with the first one due over a month period and the third, before December 25, 2005. The funds required for the deal settlement will be raised by Rosneftegaz on the international capital market. The transactions were endorsed by the Rosneftegaz’s Shareholders’ Meeting and Gazprom’s Board of Directors on June 16, this year. Increasing the state’s share in Gazprom’s authorized capital to a controlling stake marks the initiation of the Company’s share market liberalization.
On June 24, the Company’s Russian and foreign stockholders with a total of 22,111,849,707 shares, which is 93.4 per cent of their overall amount, are taking part in the Meeting personally, through their trustees or in absentia. As of 6 May 2005, the corporate Register of persons and legal entities entitled to participate in the Shareholders’ Meeting recorded 462,433 corporate equity owners with 23,673,512,900 shares. Gazprom’s Annual General Shareholders’ Meeting has approved the Company’s Annual Report and financial statements for 2004, including the profit & loss statement, and decided on the allocation of the profit (dividends inclusive) arisen over the financial year. Based on Gazprom’s 2004 operating accomplishments, the Meeting endorsed RUR 1.19 per share in dividends, which is the maximum amount ever paid out by the Company. Based on the voting held during Gazprom’s Annual General Shareholders’ Meeting, 11 persons have been elected to the Company’s Board of Directors. In compliance with the Board of Directors’ recommendations, PricewaterhouseCoopers Audit has been endorsed by Gazprom’s Annual General Shareholders’ Meeting as the Company’s auditor for 2005. The session resolved to elect Dmitry Medvedev, Head of the RF Presidential Administration as Chairman of the Board of Directors. Alexey Miller, the Gazprom Management Committee Chairman was named as Deputy Chairman of the Board.
On June 28, Gazprom and the Vologda Oblast Administration signed the Agreement for cooperation in 2005-2006.
On June 28, Gazprom and the Lipetsk Oblast Administration signed the Agreement for cooperation for a five-year period.
On June 28, Gazprom and the Novosibirsk Oblast Administration signed the Agreement for cooperation for a five-year period and the Agreement for gasification.
On June 30, Gazprom and the Tula Oblast Administration signed the Agreement for cooperation for a five-year period and the Agreement for gasification.
On July 6, Gazprom and NOVATEK signed a Partnership Agreement outlining the parties’ common interest in the natural gas & gas chemicals transmission, processing and marketing sectors as well as in intensive and mutually beneficial cooperation.
On July 7, in London, Alexey Miller, the Gazprom Management Committee Chairman and Jeroen van der Veer, Royal Dutch/Shell’s CEO have sealed a Memorandum of understanding to swap assets within the Zapolyarnoye – Neocomian field and Sakhalin-II projects. The Memorandum outlines the highlights of the deal that will provide Gazprom and Shell with 25 percent plus one share in the Sakhalin-II project and a 50 percent cut in the Zapolyarnoye – Neocomian field, respectively, with the difference in value to be identified by the parties and offset in cash or by other assets to be agreed upon additionally.
On July 8, Gazprom issued its audited 2004 IFRS consolidated financial statements.
On July 13, in Tashkent, Gazprom and Uzbekneftegaz National Holding Company initialed the mid-term Agreement on natural gas transportation via the Republic of Uzbekistan for 2006-2010.
On 18-19 July, Poland hosted a solemn ceremony dedicated to the commissioning of the Ciechanow and Szamotuly compressor stations at the Polish section of the Yamal-Europe gas pipeline. Bringing on-line the Ciechanow and Szamotuly compressor stations will allow boosting the throughput of the first line of the Yamal-Europe gas main in Poland from 22.8 to 29 bcm/y. EuroPol Gaz is acting as the compressor station construction customer.
On July 28, the Volgograd Oblast has hosted a solemn ceremony dedicated to the commissioning of the Kotelnikovskaya and Olkhovskaya compressor stations at the Pochinki – Izobilnoye – North Stavropol UGS gas trunk line. Bringing on-line Kotelnikovskaya and Olkhovskaya boosts the annual pipeline throughput from 12 to 16 bcm of gas and, consequently, sets the stage for increasing the capacity of the Blue Stream gas pipeline and intensifying gas consumption in the Volgograd Oblast.
On July 29, the city of Kazan hosted celebrations dedicated to a 50-year anniversary of Tattransgaz, a Gazprom 100 per cent subsidiary. Tattransgaz specializes in operating gas mains and low-pressure grids, engineering gas supply networks, performing overhaul and repair of existing gas pipelines and infrastructure, and transmitting gas to the Russian Federation consumers. Tattransgaz specializes in operating gas mains and low-pressure grids, engineering gas supply networks, performing overhaul and repair of existing gas pipelines and infrastructure, and transmitting gas to the Russian Federation consumers.
On August 11, Gazprom placed the A6 RUR 5 bln bonds with a RUR 1,000 face value and 4-year maturity.
On August 24, Gazprom and the authorities of the Republic of Udmurtia signed a five-year Agreement for cooperation.
On September 2, the Cove Point regasification terminal (Maryland, USA) has hosted celebrations dedicated to the arrival of the first tanker with Gazprom’s LNG to the USA. Russian LNG was delivered to the USA based on contracts with British Gas Group and Shell Western BV. Under these contracts, LNG was purchased from British Gas Group and sold to Shell Western BV for marketing in the US.
On September 8, Gazprom, BASF AG and E.ON AG signed a basic Agreement on the construction of the North European gas pipeline (NEGP) through the Baltic Sea. The parties to the agreement intend to set up the North European Gas Pipeline Company as a joint German-Russian venture, with Gazprom holding 51 per cent BASF and E.ON each 24.5 per cent.
On September 16, Alexey Miller, the Gazprom Management Committee Chairman has endorsed a short-list of companies – potential partners of Gazprom in executing the first phase of the Shtokman gas condensate field development project, including the construction of a natural gas liquefaction plant. The short-list of companies includes Statoil (Norway), Total (France), Chevron (USA), Hydro (Norway), ConocoPhillips (USA).
On September 16, Alexey Miller, the Gazprom Management Committee Chairman signed an Order to shift over to executing an investment stage of the North European gas pipeline (NEGP) project implementation. In accordance with the updated business plan, annual gas exports via NEGP are projected at up to 55 bcm.
On September 19, the Management Committee approved Gazprom’s 2004 draft budget (financial plan) updated based on the first half achievements, taking into account changes in the corporate budget drafting scenarios. The Management Committee also endorsed an investment program of Gazprom for 2005 and approved its major parameters specified at the end of the first half.
On September 19, Alexey Miller, the Gazprom Management Committee Chairman and Jean-Francois Cirelli, Gaz de France’s President met in Paris on the occasion of a 30-year anniversary of signing first export contracts between the companies. Currently, 12 bcm of gas, which is some 25 percent of overall amount imported by Gaz de France, is being delivered to France under long-term contracts sealed between Gazprom and its French counterpart. On emphasizing a high level of cooperation achieved by the firms in the gas sector, the parties expressed their intention to launch a new phase of partnership businesses. To this end, the Gazprom Management Committee Chairman and Gaz de France’s President signed a Protocol outlining top priority joint activities aiming to promote bilateral relations. In particular, given the initiation of the North European gas pipeline construction, the parties agreed to continue joint endeavors targeted at boosting the amount and safety & security of gas supply to the European market. On the occasion of the 30-year anniversary of collaboration, Gazprom and Gaz de France have jointly acted as general sponsors of the Quest for Identity: Russian Art in the Second Half of the 19th Century exhibition inaugurated in the Musйe d’Orsay, with Renaud Donnedieu de Vabres, French Culture & Communication Minister, and Russian and French first ladies Mrs. Lyudmila Putin and Mrs. Bernadette Chirac in attendance.
On September 27, Gazprom and JSC Uztransgaz (Uzbekneftegaz’s subholding company) sealed a midterm Agreement on natural gas transmission via the Republic of Uzbekistan over 2006 to 2010, pursuing the objective of transporting Central Asian natural gas, primarily of Turkmen origins, with the use of the CAC and Bukhara – Ural gas transmission networks running through Uzbekistan.
On September 27, Gazprom and the Ryazan Oblast Administration signed a five-year Agreement to convert transmission facilities and agricultural equipment to natural gas. The document was signed as part of the Agreement for gasification of the Ryazan Oblast.
On September 28, Gazprom and Millhouse Capital have signed legally binding documents for the purchase/sale of a 72.663 percent stake in Sibneft. Valued at US$ 13.091 bln, the transaction is executed in compliance with existing legislation. The Management Committee also approved the deal of purchasing a 72.663 per cent stake from Millhouse Capital. Earlier Gazprom purchased a Sibneft 73.016 percent stake from Gazprombank.
On September 28, The Board endorsed the following list of Gazprom’s strategic development targets subject to approval by the Board: economic profit growth, return on equity, gearing, production/sale volumes, total reserves amount, reserves replenishment rates. The Board entrusted the Management Committee with developing and endorsing in the 2nd quarter of 2006 the corporate planning process regulations covering strategic development targets as well as with submitting pertinent proposals for the Board’s approval.
On September 28, the Board of Directors has addressed the Gazprom operating highlights over the first half of 2005, endorsing the 2005 Budget (Financial Plan), Investment and Cost Reduction Programs. The 2005 Investment Program is targeted at meeting Gazprom’s long-term challenges including guaranteed gas deliveries to consumers of the Russian Federation and fulfillment of contractual gas export commitments, which is directly linked with the implementation of the Russia’s Energy Strategy to 2020.
On September 29, the Management Committee approved major provisions of the Gazprom’s Program on the Russian Federation offshore hydrocarbon resources exploitation up to 2030. Due business units were entrusted with further registering over 2005 to 2006 Gazprom’s licenses for the Severo-Kamennomysskoye, Kamennomysskoye-Sea, Obskoye and Dolginskoye fields development. The Management Committee issued a directive to secure Gazprom’s participation between 2005 and 2006 in biddings for the licenses to exploit resources of the prospects located in the Ob and Taz Bays offshore.
On October 4, in the presence of Hugo Chavez, President of the Bolivarian Republic of Venezuela, Paraguana hosted an awarding ceremony of hydrocarbon exploration and development licenses for Phase A of the Rafael Urdaneta project. Based on the bidding results, JSC Gazprom received from the Venezuelan Government licenses for the Urumaco I and Urumaco II investment blocks. With the licenses granted over a 30-year period, the first four years of the project are scheduled to see the implementation of a geological exploration program embracing seismic survey and drilling of exploratory wells.
On October 7, the parties addressed the outlook of cooperation between Russia and Pakistan in the oil and gas sector, signing a Memorandum of understanding between Gazprom and Pakistan’s Petroleum & Natural Resources Ministry. The Memorandum stipulates promoting the following joint businesses in the oil & gas sector: exploring and developing gas fields in Pakistan, using natural gas as motor fuel, developing and operating underground gas storage networks in Pakistan, privatizing oil & gas businesses in Pakistan.
On October 17, the Board of Directors meeting in absentia has been held. The Board of Directors approved Gazprom’s purchase of two stock holdings in Sibneft (72.663 per cent and 3.016 per cent). Consequently Gazprom has gained control of 75.679 per cent of Sibneft shares. Therefore, the deal signed on September 28, 2005, 75.679 per cent of Sibneft shares were transferred to Gazprom Finance (a Gazprom’s 100 per cent subsidiary) from affiliated companies of Millhouse Capital.
On October 20, Gazprom and the authorities of the Republic of Severnaya Osetiya-Alaniya signed a five-year Agreement for cooperation.
On November 3, the Gelendzhik district of the Krasnodar Krai has hosted the inauguration of the first phase of the Blue Stream gas pipeline-based Beregovaya compressor station, which includes three gas pumping units and two turbo generators.
On November 8, the Management Committee endorsed the Company’s socioeconomic development plan over 2006. The Management Committee gave its sanction to and decided to submit the Gazprom 2006 draft budget and cost reduction program for the Board of Directors’ approval. The draft socioeconomic development plan over 2006 stipulates 548 bcm of gas to be extracted, with the parent company’s revenues expected at RUR 1.7 trln.
In November, Gazprom came up with a new international business model. In accordance with said model, the Gazprom Group has formed an integrated block for its international business activities, with a Department within the parent company responsible for identifying and planning the corporate foreign affairs and Gazpromexport in charge of implementing the strategy developed. To this end, Gazprom set up the Foreign Economic Relations Department and dissolved the Foreign Relations Department.
On November 10, Gazprom and the Murmansk Oblast authorities signed a five-year Agreement for cooperation.
On November 11, Gazprom and Intergas Central Asia (a KazMunayGas transmission subsidiary) inked a package of mid-term contracts for the transmission of Russian and Central Asian natural gas via Kazakhstan over 2006 to 2010 with the use of the CAC and Bukhara – Ural transportation systems running via the Republic. The contracts were signed under the ‘available capacity’ principles.
On November 12, the town of Kizlyar hosted the inauguration of a link between the Makat – North Caucasus and Mozdok – Kazimagomed pipelines. Gazprom and the Daghestani Government sealed an Accord on gas supply.
On November 17, the Blue Stream project has been officially inaugurated at the Samsun-based Durusu gas metering station (Turkey).The Blue Stream construction has become another element of Gazprom’s integration into the European and global business as well as created additional conditions for establishing an integrated European energy space. Together with our foreign counterparts we formed a unique gas transmission corridor allowing to directly delivering Russian gas to Turkey, a Gazprom’s prominent consumer.
On November 19, during an Asia-Pacific Economic Cooperation (APEC) forum, Gazprom, Vnesheconombank and PTT Public Company Limited (Thailand) entered into an Agreement on strategic cooperation. Under the Agreement, the parties will focus on the following key activities in Thailand and third countries: prospecting for hydrocarbons, producing, transmitting, processing and marketing natural gas, oil and other energies, engineering, constructing and operating trunk lines, gas distribution and gas-powered facilities, oil and gas storage depots, using gas as motor fuel, developing and operating a network of automated gas-refueling compressor stations, supplying petrochemicals and gas processing products, supplying gas industry equipment.
On November 21, a Gazprom’s delegation, chaired by the Gazprom Management Committee Chairman Alexey Miller has completed a working visit to Japan, signing a heads of agreement with the Natural Resources & Energy Agency of the Japanese Economy, Trade & Industry Ministry. Gazprom will coordinate with the Natural Resources & Energy Agency its actions aimed at deeper cooperation with Japanese firms in the sci-tech and production sectors. The Agency, on its part, will back Japanese companies in establishing & promoting partnership ties and implementing joint projects with Gazprom. The parties will jointly scrutinize issues in relation to the construction of new gas processing and refining facilities in eastern Russia, organization of exports of natural gas, oil and petrochemicals & gas derivatives (including gas-to-liquids output) from Russia to Japan and joint production of dimethyl ether. The parties will also look into the possibility of launching said businesses in Russia, with the use of Japanese technologies and financing sources provided by the Agency. The agreement stipulates interaction within Japanese firms’ investment projects for eastern Russia’s hydrocarbon resources exploitation as well as within Gazprom’s investment projects in Japan, with a focus placed on setting up in Russia joint ventures engaged in equipment & materials manufacture for the Russian oil & gas industry needs.
In November, Gazprom and Gaz de France have struck the first deal for the swap of pipeline gas for LNG. The Accord was sealed between Gazprom Marketing & Trading Ltd (Gazprom M&T) and Gaz de France, MED LNG & GAS and Shell. Under the Accord, Gazprom will supply Gaz de France with extra amount of pipeline gas in exchange for a shipment of LNG from MED LNG & GAS, a joint venture of Gaz de France and Sonatrach. An LNG tanker will be sold in early December 2005 to Shell Western LNG at the Cove Point regasification terminal (Maryland, USA).
At the end of November, Gazprom has approved gas quotas for the United Gas Transmission System of Russia over 2006 and projected domestic gas quotas up to 2008 for drafting major financial documents. In accordance with the domestic gas quotas over 2006, 723.8 bcm of natural gas will be injected into UGTS for subsequent distribution among Russian constituents.
On November 24, at the Gazprom Headquarters, Alexey Miller, Chairman of the Gazprom Management Committee and Vladimir Masorin, Commander-in-Chief of the RF Navy have inked an Agreement on cooperation. Cooperation between Gazprom and the Navy will foster the pressurized & liquefied gas production and transmission, hydrocarbon field development and offshore pipeline construction.
On November 24, the 13th International Professional Exhibition Press 2006 held in Moscow summed up the results of the National Silver Kamerton Contest conducted among PR units of Russian firms and organizations. Gazprom’s Information Policy Department won the Best Corporate Edition nomination for publishing the Gazprom magazine.
On November 25, the Krupskiy district of Belarus, Minsk Oblast has hosted the inauguration of the Krupskaya and Slonimskaya compressor stations at the Belarusian section of the Yamal Europe gas pipeline. This event stimulated crucial challenge of the cooperation between Russia and Belarus, which is bringing Yamal Europe’s Belarusian section to its nominal capacity.
On November 28, the town of Krasnoznamensky of the Kaliningrad Oblast has hosted the inauguration of the first phase of the Krasnoznamenskaya compressor station, which includes two gas pumping units and supporting infrastructure. Being of particular importance for Gazprom’s network of compressor stations, Krasnoznamenskaya will play a crucial role in sustainable gas deliveries to the region. The station commissioning will allow Gazprom to fulfill its commitments to boost gas supply to the Kaliningrad Oblast and increase the annual amount of gas transmitted by the Minsk – Vilnius – Kaunas – Kaliningrad gas pipeline.
On December 1, Gazprom and the Khanty-Mansiysk Autonomous Okrug authorities signed the Agreement for cooperation.
On December 1, Gazprom and the Primorsky Krai signed the Agreement for cooperation within 5 years.
On December 9, the first joint of the Russian onshore section of the North European Gas Pipeline has been welded in the town of Babayevo (the Vologda Oblast).
December 14, the ceremonies commemorating bringing on-line the Kaunas-Shakyai trunk gas pipeline looping and Shakyai gas measuring station construction completion were held yesterday in the town of Shakyai, the Republic of Lithuania. The project implementation will allow Gazprom to increase annual gas volume transportation via Minsk-Vilnius-Kaunas-Kaliningrad gas pipeline, and to improve the energy security of the Kaliningrad Oblast.
On December 15, in Irkutsk, Gazprom presented its General layout of gas supply and gasification of the Irkutsk Oblast. The General layout developed by Promgaz based on detailed scientific analysis of the economy of Siberia and the prospects of development of its energy industry stipulates integrated solution of the problem of sustainable energy supply, creation of an optimal energy balance and facilitation of the oblast’s energy security.
On December 16, Gazprom and the Irkutsk Oblast signed the Agreement for gasification.
On December 20, Gazprom and the Yamal-Nenets Autonomous Okrug signed the Agreement for cooperation in 2006.
On December 22, in the course of the trip the Russian and Chinese sides signed a Contract to engineer an underground gas storage facility in the oil dome Zhen-11. The facility will be designed by VNIIGAZ, a leading Research Center of Gazprom.
On December 23, the Gazpromenergo Headquarters has hosted a presentation of Gazprom’s Automated Electricity Metering System (AEMS). AEMS has been developed to optimize electricity costs and establish an environment required for switching to energy supplies from the regulated and competitive sectors of the wholesale electricity market. AEMS is unique in its ability to control not only the amount but also the quality of electricity consumed.
On December 28, the Board endorsed a new edition of the budget (financial plan) for 2005. In accordance with the budget, Gazprom’s overall income & revenues and expenses will grow RUR 392.2 bln and RUR 372 bln to RUR 2,046.4 bln and RUR 2,164 bln, respectively, as compared with a budget version approved by the Board on 28 September this year. Financial investments will jump RUR 20.5 bln to RUR 130.5 bln and the budgetary surplus is projected at RUR 39 bln. The growth of earnings and expenses stemmed to a larger extent from the acquisition of Sibneft’s shares and related transactions.
On December 28, the Uglich – Kalyazin gas pipeline has been brought online in the town of Kalyazin of the Tver Oblast. The line construction had run in parallel with the construction of gas distribution networks and conversion of the town’s Central Boiler to natural gas. Based on the gas supply model for Kalyazin, Gazprom intends to promote efficient gas utilization in other small and medium towns of Russia.