Gazprom reports its concolidated interm financial results under International Financial Reporting Standards (IFRS) for the nine months ended 30 September 2005

On 30 January 2006 OAO Gazprom issued its unaudited consolidated interim condensed financial information prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting” (IAS 34) for the nine months ended 30 September 2006.

During the period from December 2003 to December 2005, the International Accounting Standards Board (“IASB”) revised 17 of its standards and issued 7 new standards. The presented financial information was prepared in accordance with all the new and revised IFRS standards which are effective from 1 January 2005 and are relevant to operations of the Group. Moreover, Gazprom Group early (from 1 January 2005) adopted IFRS 6 Exploration and Evaluation of Mineral Resources.

The table below presents the unaudited consolidated interim condensed statement of income for the nine months ended 30 September 2005 and 2004. All amounts are presented in million Russian Roubles, unless otherwise stated.

Sales (net of excise, VAT and customs duties) increased by RR218,905 million, or 32%, to RR902,235 million in the nine months ended 30 September 2005 compared to the nine months ended 30 September 2004. More detailed information on our sales for the nine months ended 30September 2005 and 2004 is presented in the table below.

Net sales of natural gas increased by RR186,496 million, or 35 %, to RR723,310 million in the nine months ended 30 September 2005 compared to the nine months ended 30 September2004. This increase was primarily due to higher European and domestic prices for gas as well as higher volumes of gas sold.

Net sales of natural gas to Europe increased by RR110,288million, or 35 %, to RR426,509million in the nine months ended 30 September 2005 compared to the nine months ended 30 September 2004. This was primarily due to higher average prices for gas sold to European customers and the 2% increase in the volume of gas sold.

Net sales of natural gas to FSU countries increased by RR35,556 million, or 73%, to RR84,027million in the nine months ended 30 September 2005 compared to the nine months ended 30September 2004. This is explained higher sale volumes and higher prices. Sales of natural gas to FSU include sale of gas from the Ukrainian underground gas storage.

Net sales of natural gas in the domestic market increased by RR40,652 million, or 24%, to RR212,774 million in the nine months ended 30 September 2005 compared to the nine months ended 30September2004. This is explained primarily by increased average domestic price for gas set up by the Federal Tariff Service.

In the nine months ended 30 September 2005 sales of gas condensate and oil and gas products increased by RR28,135 million, or 32%, primarily due to increased market prices for oil and gas products in the nine months ended 30 September 2005 compared to the nine months ended 30September2004.

Operating expenses increased by RR90,600 million, or 18%, to RR587,338 million in the nine months ended 30 September 2005 compared to the nine months ended 30 September2004.

This increase in operating expenses was primarily due to higher taxes other than on income (RR13,259 million), higher expenses on repairs and maintenance (RR14,741 million), higher depreciation (RR9,572 million) and higher purchased gas expenses (RR8,435 million). The increase in taxes other than on income was primarily due to changes in tax legislation related to natural resources production tax and enacted from 1 January 2005. The increase in expenses on repairs and maintenance can be explained by increased volumes of work fulfilled by external service companies primarily in the transportation segment. The increase in the cost of purchased gas was primarily related to higher purchases of gas in Central Asia and Europe for resale to customers in Western Europe and FSU.

The profit tax increased by RR36,557 million, or 68%, to RR90,674 million in the nine months ended 30 September 2005 compared to RR54,117 million for the nine months ended 30 September 2004. Our effective current profit tax rate for the nine months ended 30September 2005 was 27.9% compared to 27.7% for the nine months ended 30September 2004.

In the nine months ended 30 September 2005 our profit for the period attributable to equity holders of OAO Gazprom totaled RR232,130 million which is RR92,747million, or 67 %, higher compared to the nine months ended 30 September 2004.

Our net debt balance (defined as the sum of short-term borrowings, current portion of long-term borrowings, short-term promissory notes payable, long-term borrowings, long-term promissory notes payable and restructured tax liabilities, net of cash and cash equivalents and balances of cash and cash equivalents restricted as to withdrawal under the terms of certain borrowings and other contractual obligations) increased by RR20,759million, or 4%, from RR499,855million as of 31 December 2004 to RR520,614million as of 30 September 2005. This can be explained primarily by increased sum of long-term and short-term borrowings.

More detailed information on the IFRS consolidated interim condensed financial information for the nine months ended 30 September 2005 can be found here.

Information Directorate, OAO Gazprom