Address to Shareholders

Chairman of the Gazprom Board of Directors Viktor Zubkov

 

Chairman of Gazprom's Management Committee Alexey Miller


Dear Shareholders!

Gazprom is a global vertically integrated energy company. We have a long track record of success carrying out major projects, implementing unique technology solutions, and diversifying energy supplies – our key performance figures for 2013 have once again convincingly confirmed our leadership.

Gazprom pioneered the development of the Russian Arctic shelf, launching oil production at the Prirazlomnoye oil field last December. For the first time in the history of the global energy industry, an offshore fixed platform is used to develop hydrocarbon deposits on the Arctic shelf. This project provides us with a wealth of invaluable experience that is unique in Russia and will be used in other projects.

Gazprom successfully tried and tested a first-in-Russia underwater production system at the Kirinskoye field (Sakhalin III project). Underwater production systems are effi cient, reliable and safe, offering an additional benefit of significantly minimising the environmental footprint. Thus, Gazpom contributes to the accelerated technological development of the Russian energy industry.

In addition to being the Russian market leader in terms of installed power capacity, in 2013, Gazprom Group became Russia’s largest company by installed heat capacity.

The Group acquired OAO MIPC, a leading supplier of heat and hot water to Moscow and some cities and towns in the Moscow Region

During the reporting year, Gazprom Group successfully continued the implementation of its infrastructure projects abroad, with significant progress made at the South Stream Project as construction of its Bulgarian and Serbian sections started. At the same time, we continued the construction of the Southern Corridor in Russia, a gas pipeline system to be used, among other things, to deliver gas to the South Stream.

The Company took consistent efforts to grow its share of the global LNG market, with decisions taken in 2013 to start construction of LNG plants in the Primorye Territory and the Leningrad Region.

In 2013, for the second year in a row, Gazprom made record investments in one of its strategic priority corporate social responsibility projects, expansion of gas infrastructure in Russian regions. This resulted in another 320 communities across the country covered by gas distribution networks, bringing the average gas infrastructure coverage in Russia to 65.3%.

Another major project Gazprom has consistently pursued in the Russian market is switching motor vehicles from gasoline to natural gas. In 2013, the project gained significant support from the Government and from the general public. We have established working contacts at all levels of the government to further the project; and draft legislation has been prepared to provide the supporting legal framework. All key players in the Russian gas motor fuel market, including financial institutions, regional governments, equipment manufacturers, and major vehicle fl eet operators, have been linked up into a single chain.

We pride ourselves on being a leading example of compliance with environmental legislation and care for nature; in 2013, Gazprom became the first major company in the Russian fuel and energy sector to hold the Year of Ecology. Over 70,000 Gazprom Group’s employees across the country participated in more than 8,000 environmental activities and events, including urban greening, water body clean-up, specially protected natural area support.

In 2013, all Gazprom neft’s refineries completed transition to production of class 5 fuels significantly ahead of the deadlines scheduled by the Russian Government, which directly contributed to an improved environment on a national scale.

All these highlights are a testimony of Gazprom’s successful performance in 2013. With its unyielding focus on set targets and strong commitment to deal with major and complex challenges, the Company contributes to an accelerated growth of the Russian economy in general. By growing our own capabilities we work for the benefit of the entire country.