SOURCE: GAZPROM DATA. 100%. 1993 .... SOURCE: GAZPROM IN FIGURES 2009-2013 FACTBOOK, GAZPROM DATA. 2014 ..... Weather in
GAZPROM INVESTOR DAY GAS BUSINESS FEBRUARY 2015 HONG KONG, SINGAPORE
AGENDA
PRESENTATION SPEAKERS
Strategy
Upstream
Dmitry Lyugai
Vsevolod Cherepanov
Member of Gazprom Management Committee Head of the Department
Member of Gazprom Management Committee Head of the Department
Export
Finance
Alexander Medvedev
Andrey Kruglov
Deputy Chairman of Gazprom Management Committee
Deputy Chairman of Gazprom Management Committee Head of the Department
Oil Business
Power Generation
Alexei Yankevich
Denis Fedorov
Member of the Management Board of Gazprom Neft Deputy CEO for Economics and Finance of Gazprom Neft
Head of Gazprom Directorate General Director of Gazprom Energoholding
Project Finance Oleg Nagovitsyn General Director of Gazprom Investproject
INVESTOR DAY 2015 HONG KONG, SINGAPORE
2
DISCLAIMER This presentation has been prepared by OJSC Gazprom and its consolidated subsidiaries (the Company), and comprises the slides for a presentation to investors concerning the Company. This presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares or other securities representing shares in the Company, nor shall it or any part of it nor the fact of its presentation or distribution form the basis of, or be relied on in connection with, any contract or investment decision. No reliance may be placed for any purposes whatsoever on the information contained in this presentation, or any other material discussed at any presentation or on its completeness, accuracy or fairness. The information in this presentation should not be treated as giving investment advice. Care has been taken to ensure that the facts stated in this presentation are accurate, and that the opinions expressed are fair and reasonable. However, the contents of this presentation have not been verified by the Company. Accordingly, no representation or warranty, express or implied, is made or given by or on behalf of the Company or any of its members, directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in or discussed at this presentation. None of the Company or any of their respective members, directors, officers or employees nor any other person accepts any liability whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith. The information in this presentation includes forward-looking statements. These forward-looking statements include all matters that are not historical facts, statements regarding the Company’s intentions, beliefs or current expectations concerning, among other things, the Company’s results of operations, financial condition, liquidity, prospects, growth, strategies, and the industry in which the Company operates. By their nature, forward-looking statements involve risks and uncertainties, including, without limitation, the risks and uncertainties to be set forth in the prospectus, because they relate to events and depend on circumstances that may or may not occur in the future. The Company cautions you that forward looking statements are not guarantees of future performance and that its actual results of operations, financial condition and liquidity and the development of the industry in which the Company operates may differ materially from those made in or suggested by the forward-looking statements contained in this presentation. In addition, even if the Company’s results of operations, financial condition and liquidity and the development of the industry in which the Company operates are consistent with the forward-looking statements contained in this presentation, those results or developments may not be indicative of results or developments in future periods. The information and opinions contained in this presentation are provided as at the date of this presentation and are subject to change without notice. No person is under any obligation to update or keep current the information contained herein. By attending the presentation you agree to be bound by the foregoing limitations. INVESTOR DAY 2015 HONG KONG, SINGAPORE
3
5
STRATEGY
19
UPSTREAM
26
EXPORT
37
FINANCE
INVESTOR DAY 2015 HONG KONG, SINGAPORE
4
STRATEGY DMITRY LYUGAI MEMBER OF GAZPROM MANAGEMENT COMMITTEE – HEAD OF THE DEPARTMENT
INVESTOR DAY 2015 HONG KONG, SINGAPORE
5
GAZPROM AT A GLANCE SHORT OVERVIEW
Gazprom is a Russian global energy company
History 1906
First commercial gas production from Russian gas field – “Dagestanskye Ogni” (Derbent city)
Its major business lines are:
Geological exploration
1943
First Russian trunk gas pipeline “Buguruslan-Kuybyshev (Samara)”
Production
1948
Natural gas production department set up at the Ministry of oil industry
Transportation and Storage
1965
USSR Gas Industry Ministry established
Processing and sales of gas, gas condensate and oil
1973
First Russian gas delivered to Europe
Sales of gas as a vehicle fuel
1989
USSR Gas Industry Ministry restructured into Gazprom State Gas Concern
Generation and marketing of heat and electric power
1993
ON THE BASIS OF GAZPROM STATE GAS CONCERN RUSSIAN JOINT-STOCK COMPANY "GAZPROM" (RAO "GAZPROM") WAS ESTABLISHED WHICH WAS TRANSFORMED IN 1998 INTO OPEN JOINT-STOCK COMPANY "GAZPROM" (OAO "GAZPROM")
2005
Gazprom acquired “Gazprom neft” (formerly “Sibneft”)
GAZPROM is involved in hydrocarbon exploration and production projects in more than 10 foreign countries, incl. Algeria, Bolivia, Bosnia and Herzegovina, Great Britain, Hungary, Venezuela, Vietnam, Iraq, Kyrgyzstan, Romania, Tajikistan, Uzbekistan.
2007-2009 Gazprom entered into the energy business (consolidated under “Gazprom Energoholding”)
Achievements for 22 years
Gazprom revenue structure1 1993
12 tcm
GAS PRODUCED
546 mm tons
OIL AND GAS CONDENSATE PRODUCED
8.6 tcm
NEW GAS RESERVES DISCOVERED
2013 GAS
24% 100%
OIL
7% 69%
33 THOUSAND KM OF SOURCE: GAZPROM DATA
INVESTOR DAY 2015 HONG KONG, SINGAPORE
POWER
NEW PIPELINES BUILT 1
According to International Financial Reporting Standards (IFRS)
6
GAZPROM IN FIGURES Gas reserves #1 WORLD
Oil and gas condensate production #1 RUSSIA
72%
17%
Gazprom gas reserves (A+B+C1) – 36 tcm, incl. onshore – 29 tcm, offshore – 7 tcm
RUSSIA
9%
Gas production #1 WORLD
#1 RUSSIA
14%
73%
Gazprom Group gas production – 487 bcm Number of active gas production wells – 7,263 Number of producing fields – 131
Electric power and heat generation
Gas transport system
Length of Gazprom’s trunk pipelines in Russia – 169 thousand km Aggregate active capacity of 26 UGSF1 in Russia – over 70 bcm Access to active capacity of UGSF in Europe – above 4 bcm Natural gas transported via GTS2 in Russia – 659 bcm
Gas processing
1
2
Processing volumes – 32 bcm Gas processing capacity – 54 bcm Oil and gas condensate refining – 66 mm tons
Underground gas storage facility Gas transportation system
SOURCE: GAZPROM ANNUAL REPORT 2013, GAZPROM IN FIGURES 2009-2013 FACTBOOK
INVESTOR DAY 2015 HONG KONG, SINGAPORE
Gazprom Group oil and gas condensate production — 69 mm tons Number of active oil production wells — 7,246
Total electric power generating capacity — 39 GW Total heat generating capacity — 73 Tcalh Total electric power generated — 163 billion kWh Total heat generated — 113 mm Gcal
Marketing
Largest gas export company European gas market share — 30% Russian gasoline station oil product sales share — 13% Russian electric power generation share — 15%
Personnel Number of employees — 459,500, including: gas production, transportation, underground storage and processing subsidiaries — 228,600 Gazprom neft — 62,800 Gazprom Energoholding — 50,800 overseas companies — 27,400 All figures are dated of 31.12.2013 Calorific value of natural gas = 8,850 kcal/m3 (20 0С )
7
GAZPROM GROUP’S MISSION AND STRATEGIC GOAL
MISSION
STRATEGIC GOAL
RELIABLE, EFFICIENT AND BALANCED SUPPLY OF NATURAL GAS, OTHER ENERGY RESOURCES AND REFINED PRODUCTS TO CONSUMERS
ESTABLISH ITSELF AS A LEADER AMONG GLOBAL ENERGY COMPANIES BY DIVERSIFYING SALES MARKETS, ENSURING RELIABLE SUPPLIES, IMPROVING PERFORMANCE AND UTILIZING R&D POTENTIAL
BUSINESS TYPE EXPLORATION AND PRODUCTION
INVESTOR DAY 2015 HONG KONG, SINGAPORE
TRANSPORTATION AND STORAGE
PROCESSING AND ENERGY PRODUCTION
MARKETING AND SALES
8
WORLD GAS DEMAND Share of natural gas in world total primary energy consumption 2030 FORECAST
Natural gas consumption by region 2013
20%
17% 23%
9%
3.6
3%
4%
24% 13%
6%
26%
tcm
5%
2013 NORTH AMERICA
14% 19%
LATIN AMERICA
30%
OECD EUROPE OTHER EUROPE AND EURASIA 2030 FORECAST
33%
26%
28%
MIDDLE EAST
5% GAS
OIL
COAL
NUCLEAR
RENEWABLES
AFRICA
24%
25%
4.8 tcm
ASIA OCEANIA
5% 12%
13% 16%
INVESTOR DAY 2015 HONG KONG, SINGAPORE
9
GAZPROM ON THE RUSSIAN DOMESTIC MARKET Structure of Gazprom’s gas sales revenue, 20131 58%
774
740
3 000 2 000
300
0
265
250
2011
360
4 000
3,394
2,964 723
bcm
400
228
2012 2013 GAZPROM GROUP’S SALES IN RUSSIA (BCM) REVENUE (RR BN) DOMESTIC AVERAGE PRICE (RR/MCM)
1 000
RR/mcm
bcm; RR bn
600
2,725
FSU COUNTRIES RUSSIA
27% 900
500
EUROPE
15%
Gas deliveries to Russian consumers2
300
200
0
Gazprom is responsible for the large-scale Program for Expansion of Gas Infrastructure in Russian Regions. Level of natural gas gasification in Russia grew from 53.3% to 65.3% between 2005 and 2013. Length of Russian gas distribution system, operated by Gazprom Group, is 716 thousand kilometers.
100 2015
Total final consumption OIL 14%
20%
COAL 14%
52% GAS
1 2
not including custom duties incl. gas purchases from other companies
INVESTOR DAY 2015 HONG KONG, SINGAPORE
2025
2030
2030 ENERGY STRATEGY OF RUSSIA (PROJECT) OTHER OIL 13% 20% COAL 15%
2014
OTHER
2020
52%
GAS SHARE STABILIZATION IN FUEL AND ENERGY BALANCE
GAS
SOURCE: GAZPROM IN FIGURES 2009-2013 FACTBOOK, GAZPROM DATA
10
EUROPE: GAZPROM’S TRADITIONAL MARKET Forecast — gas production vs. consumption in Europe 700
Gazprom’s pipeline gas deliveries to Europe 300
bcm
600
bcm
CONSUMPTION
500
200
~400
400
■ ■ ■ ■ ■
decrease of indigenous gas production in Europe no success in shale gas developments close of nuclear energy development increase of gas consumption in transportation sector new sectors of gas consumption
■ ■ ■ ■ ■
regasification terminals network development European policy – diversification of suppliers and supply routes regulatory frameworks in energy sector become tougher policy in energy savings and energy efficiency subsidizing of renewable energy sources
PRODUCTION
300
100
200
100 2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
0
Shale gas in Europe — an expected setback Estimated shale gas technically recoverable resources – 16.9 tcm Rest of France Ukraine Romania Europe Poland 4.2 3.9 3.6 1.4 3.7
0 2010
2015
2020
2025
2030
Gazprom’s share in the European market 2013
2030
30%
30% MAX
MIN
Recent progress and current state of development SOURCE: WOOD MACKENZIE, EIA, PLATTS, ERI RAS, IEA, IHS, RYSTAD ENERGY, BP
INVESTOR DAY 2015 HONG KONG, SINGAPORE
JSC "GAZPROM"
OTHER SOURCES OF GAS
11
GAZPROM: UPSTREAM DEVELOPMENT Field productivity plateau, bcm/year1 Urengoyskoye (Achimov deposits) 25 Pestsovoye (Neocomian-Jurassic) 2 Yubileynoye (Apt-Albian, Senomanian deposits) 2 Bovanenkovskoye 115 Kharasaveiskoye 32 Severo-Kamennomysskoye 16 Kamennomysskoye-sea 15 Kirinskoye 6 Kirinskiy licensed section 16 Key Gazprom gas greenfields
North of West Siberia and Yamal peninsula Fields Pre-Yamal shelf Pechorskoye Sea shelf Kharasaveiskoye Bovanenkovskoye Pestsovoye Yubileynoye
Severo-Kamennomysskoye Kamennomysskoye-sea Urengoiskoye
RUSSIA
Chayandinskoye Kovyktinskoye
Chayandinskoye
Eastern Siberia and Far East Fields Kovyktinskoye Gas field
25 35
«Sakhalin-3» Kirinskoye Kirinskiy licensed section
Continental shelf
Prospective sources of Gazprom’s gas production 800 OTHER NEW FIELDS
bcm
600
EAST SIBERIA AND FAR EAST FIELDS
400
YAMAL MEGAPROJECT
200
JSC GAZPROM NEFT OPERATING FIELDS
0 2013
2020 min
2030 min
2020 max
2030 max
SOURCE: GAZPROM IN FIGURES 2009-2013 FACTBOOK, GAZPROM DATA 1 whole number rounding
INVESTOR DAY 2015 HONG KONG, SINGAPORE
12
KEY CURRENT AND PROSPECTIVE RUSSIAN NATURAL GAS EXPORT DESTINATIONS
Sakhalin-Khabarovsk-Vladivostok Power of Siberia
Altai project
- current Russian natural gas export destinations - prospective and ongoing Russian natural gas export projects - operating LNG projects - prospective LNG projects
INVESTOR DAY 2015 HONG KONG, SINGAPORE
13
GAZPROM IN LNG MARKET
800
World LNG demand and production forecast
Mln t/year
LNG PLANTS UNDER CONSTRUCTION OPERATING LNG PLANTS OPTIMISTIC CONSUMPTION FORECAST
World total in 2014: ■ 19 LNG exporting countries, 30 LNG importing countries, incl. 3 LNG exporting/importing countries ■ 39 operating LNG plants with total capacity of 414 bcm (302 mm t/year), 19 LNG plants under construction with total capacity of 178 bcm (129 mm t/year) ■ 108 operating and 21 under construction regasification terminals
PESSIMISTIC CONSUMPTION FORECAST
Baltic LNG
600
RUSSIA Sakhalin-2 Vladivostok LNG
400
200
SOURCE: WOOD MACKENZIE
INVESTOR DAY 2015 HONG KONG, SINGAPORE
2030
2025
2020
2015
2010
2005
0
LNG EXPORTERS
OPERATING LNG PLANT
LNG IMPORTERS
PROSPECTIVE LNG PLANT
LNG EXPORTERS/IMPORTERS
14
GAS INFRASTRUCTURE DEVELOPMENT IN EASTERN SIBERIA AND FAR EAST REGIONS Transportation site
Date when put into operation (not earlier)
Length, km
Trunk pipeline “Power of Siberia”
2018
4,000
Fields Pipelines: existing under construction possible designed
Power of Siberia trunk pipeline
Operating trains of LNG plants Prospective trains of LNG plants
CHINA Production sites Chayandinskoye Kovyktinskoye (incl. Chikanskoye field) INVESTOR DAY 2015 HONG KONG, SINGAPORE
Date when put into operation (not earlier)
Plateau production, bcm/year
2018 2022
25 35
15
RUSSIAN — CHINA GAS DEAL MAIN CHARACTERISTICS
CONTRACT VOLUME
CONTRACT LIFETIME YEARS
BCM per YEAR
CHINA GAS CONSUMPTION 10 YEARS AGO 10% OF CHINESE GAS MARKET AFTER RAMPING UP
INVESTMENT
CONTRACT VALUE
$ BLN
CAPITAL INVESTMENT COMPARABLE WITH AUSTRALIAN GORGON PROJECT ($54 BLN*), RUSSIAN PROJECT VOLUME 75% HIGHER
PERIOD COMPARABLE WITH TRUNK GAS PIPELINE LIFE TIME
$ BLN
TOTAL AMOUNT OF GAZPROM INVESTMENT PROGRAM FOR LAST 10 YEARS
SOURCE: * WOODMACKENZIE, IHS PFC ENERGY
INVESTOR DAY 2015 HONG KONG, SINGAPORE
16
RUSSIAN — CHINA GAS DEAL BOTTOM OF THE ICEBERG GAS DEAL For Gazprom
For CNPC
Market diversification
Favorable pricing versus LNG
Russian pipeline natural gas popularization in the Asia Pacific Region market
Pipeline supply sources diversification
Natural gas supply sources diversification (from LNG)
Sales of Russian pipeline natural gas increase
Strengthening the company’s position in the gas supply market
Market niche decreasing for new high-cost LNG suppliers
Basic for “west” route negotiation
Long-term leadership in a strategic market – helium
Benchmark for Asia Pacific Region gas prices
RELIABILITY OF SUPPLIES DUE TO LACK OF TRANSIT RISK For Russia
Trade and economic Russia-China cooperation widening Trade balance equalization New well-paid high-skilled jobs Fuel and energy balance optimization in Eastern Siberia and the Far East regions Contribution to GDP, taxes and duties Reduction of unemployment rate in Eastern Siberia and the Far East regions Geopolitical interests Eastern Siberia and the Far East regions gasification Gas processing and gas chemical industries development. High added value products: helium, ethylene, propylene, polyethylene, polypropylene, ethylene glycol Contribution to Russian natural gas production Large order for manufacturers
INVESTOR DAY 2015 HONG KONG, SINGAPORE
For China
Trade and economic Russia-China cooperation widening
New well-paid high-skilled jobs
Fuel and energy balance optimization (gas share increasing)
Providing secured sources of supply for growing gas demand
Border territories gasification
Increase of chemical production imports from Russia
Large orders to manufacturers. New jobs
Ecological issues solution: decreasing emissions of CO2, SO2, NOx and ashes
17
FORECAST OF CAPITAL INVESTMENTS Structure of CAPEX by gas business segment average annual 2015-2030 approx. 24 bln USD*
GAZPROM’S DEVELOPMENT PROGRAM OVER A TENYEAR PERIOD
GAZPROM'S INVESTMENT PROGRAM
INNOVATIVE DEVELOPMENT PROGRAM TO 2020
PROCESSING, LNG
12 %
TRANSPORT (incl. UGS**)
46 %
PRODUCTION
38 %
EXPLORATION
4%
*
May vary depending on USD/RUB & EUR/RUB exchange rate ** UGS is underground gas storage UGSS is unified gas supply system
Structure of CAPEX by major project YAMAL MEGAPROJECT
28%
EASTERN SIBERIA AND THE FAR EAST* OTHER PROJECTS*
53% 19%
INVESTOR DAY 2015 HONG KONG, SINGAPORE
*
exploration; existing and new production and transport projects, processing and LNG projects
18
UPSTREAM VSEVOLOD CHEREPANOV MEMBER OF GAZPROM MANAGEMENT COMMITTEE – HEAD OF THE DEPARTMENT
INVESTOR DAY 2015 HONG KONG, SINGAPORE
19
2014 GEOLOGICAL EXPLORATION RESULTS Russian gas reserves Independent Producers 24%
4% Unallocated fund
Gazprom’s huge hydrocarbon reserves and longest reserve life bboe
140
123 (37 yrs)
120
Gazprom 72%
89 (12 yrs)
100
96 (17 yrs)
80
60
Global gas reserves 40 Gazprom 17 %
20
0 Gazprom
Supermajor Combined
Major Emerging Markets Combined
X - 2013 total proved reserves of hydrocarbons (bboe) (X) - Reserve life in years based on 2013 total proved reserves and 2013 production of hydrocarbons SOURCES: BLOOMBERG, COMPANY’S DATA
INVESTOR DAY 2015 HONG KONG, SINGAPORE
20
SUMMARY GAS RESERVES INFORMATION
Natural Gas, tcm С2(2)
АВС1(1)
С2(2)
АВС1(1)
С2(2)
36.1
10.1
1,444.4
679.6
1,937.2
1,594.4
Discovery of 1 new field and 8 new deposits within previously discovered fields Gas reserves replacement ratio – 183 %
tcm 230,3
230,1
299,6
279,6
300
USD bn
241,4
250
208,6
50
200
160,8
40
20
299,2
269,6
60
30
Crude Oil, extracted, mm tons
АВС1(1)
2014 70
Gas Condensate, extracted, mm tons
28,0
25,3
78 18,5
28,9 27,7
29,1 27,8
92,921
20,8
29,9
27,9 20,8
29,8 28,4 20,8
33,6
33,1 29,2
21,3
29,9
33,1
35,1 30,6
31,7
32,9
22,8
22,5
21,9
35,1
23,4
35,6
33,2
36.1
150
23,3 100
50
10 0
0 2003
2004
2005
GAZPROM GROUP GAS RESERVES (ABC1)
1 2
2006
2007
AUDITED АВС1 RESERVES
2008
2009
2010
PROVED + PROBABLE RESERVES (PRMS)
2011
2012
2013
2014
PRESENT VALUE (INCL. LIQUID HYDROCARBONS, SULFUR AND HELIUM)
ABC1 reserves - explored reserves according to Russian standards of classification. Explored gas reserves (categories ABC1) are considered fully recoverable. For oil and gas condensate reserves a special index of extraction is used. This index is calculated taking into account geological and technical factors. C2 reserves belong to the estimated category and serve as a basis for setting up exploration work at a specific field.
INVESTOR DAY 2015 HONG KONG, SINGAPORE
21
PRODUCTION STRATEGY Gazprom main production regions
Yamal
NadymPur-Taz
Krasnoyarsk gas production center
Sakhalin gas production center
Yakutsk gas production center Irkutsk gas production center
Gazprom production 2003-2015 900
600
183%
bcm
552.4
540.2
200 180
YAMAL (BOVANENKOVSKOYE)
160
ZAPOLYARNOYE FIELD
140
549.7 513.2
461.5
300
%
120
444.0
79%
100
YAMBURGSKOYE FIELD
80
URENGOYSKOYE FIELD - CENOMANIAN
60 40
0 2003
2004
2005
2006
INVESTOR DAY 2015 HONG KONG, SINGAPORE
2007
2008
2009
2010
2011
2012
2013
2014F
2015F
MEDVEZHYE FIELD
OTHER FIELDS OF NADYM-PUR-TAZ REGION
20
OTHER REGIONS
0
GAS RESERVE REPLACEMENT RATIO (RIGHT AXIS)
22
YAMAL MEGAPROJECT Bovanenkovskoye field (production forecast) bcm
40
20
KARA SEA
Rusanovskoye
0
Leningradskoye Malyginskoye Taslyskoye Severo-Tambeyskoye Syadorskoye Zapadno-Tambeyskoye Kharasaveyskoye Yuzhno-Tambeyskoye
2012 GYDAN BAY
Arcticheskoye Teta-Yakinskoye YAMAL PENINSULA Antipayutinskoye Tchugoriakhinskoye Semakovskoye Sredneyamalskoye SeveroNurminskoye Kamenomysskoye Khambateyskoye TAZ BAY Parusovoye Kamennomysskoye Obskoye more Novoportovskoye
Operating gas pipelines Projected gas pipelines and gas pipelines under construction Continental fields
2015F
С1+С2 Reserves
8.5 tcm of gas
203.3 mn t of condensate
Peak annual production
217 bcm of gas
4 mn t of stable condensate
Tambeyskoye industrial zone
Comprehensive YAMBURG gas processing OB BAYSevero-Urengoyskoye unit TAZOVSKIY Wells, well clusters Shell fields
С1+С2 Reserves
3.9 tcm of gas
178.0 mn t of condensate
Peak annual production
65 bcm of gas
2.8 mn t of stable condensate
Combined CAPEX for Yamal Program development 2015 F
2016 F
RR 118.6 bn
RR 174.6 bn
INVESTOR DAY 2015 HONG KONG, SINGAPORE
2014 Plan
Bovanenkovskoye industrial zone
VerhneKruzenshternovskoye TiuteyskoyeZapadnoVostochno- Seykhinskoye Bovanenkovskoye Bovanenkovskoye Nerstinskoye Neytinskoye
Baidarata Bay
2013
Yuzhnaya industrial zone С1+С2 Reserves
1.4 tcm of gas
60.0 mn t of condensate
Peak annual production
30 bcm of gas
0.8 mn t of condensate
23
EASTERN GAS PROGRAM Kirinskoye field (production forecast) bcm/year 1
0,5
0 2013 NORTH OF THE TYUMEN REGION
Udachniy
Surgut
KRASNOYARSK CENTER
KAMCHATS KCENTER Petropavlovs kKamchatsky
Yakutsk Mirniy
Oha
SAKHALIN CENTER
YAKUTSK KomsomolskCENTER Uzhno-Sakhalinsk na-Amyre Tinda Tomsk IRKUTSK Skovorodino CS Bogandinskaya Boguchani Khabarovsk CENTER Sovgava Proskokovo Krasnoyarsk Chelabinsk Kansk n Chita Achinsk Omsk Blagoveshensk Taishet Novoisbirsk Kemerovo Balagansk Abakan Barnaul Daqing Sayansk Irkutsk Zabaykalsk Ulan-Ude Biysk Novokyznetsk KAZAKHSTAN Gorno-Altaisk Tyumen
ULAN-BATOR
Shenyang
MONGOLIA
Gas production center Operating LNG plants LNG plants under construction in Vladivostok Projected gas processing plants CHINA Pipelines under construction Lanzhou Operating gas pipeline
TOKYO
NORTH KOREA SOUTH PYONGYANG KOREA
BEIJING Xian
JAPAN Osaka
2015F
Sakhalin gas production center С1+С2 Reserves
799 bcm of gas
116.4 mn t of condensate
Peak annual production
21.5 bcm of gas
5.05 mn t of stable condensate
Yakutsk gas production center - Chayandinskoye field С1+С2 Reserves
1.4 tcm of gas
22.1 mn t of condensate
Peak annual production
25 bcm of gas
0.4 mn t of stable condensate
Busan Kitakyusyu Xinyang
Shanghai
Combined CAPEX for Eastern Program development 2015F
2016 F
RR 57.4 bn
RR 279.5 bn
INVESTOR DAY 2015 HONG KONG, SINGAPORE
2014 Plan
Irkutsk gas production center - Kovyktinskoye field С1+С2 Reserves
2.5 tcm of gas
85.7 mn t of condensate
Peak annual production
35.3 bcm of gas
1.9 mn t of stable condensate
Krasnoyarsk gas production center - Sobinskoye field С1+С2 Reserves
154.4 bcm of gas
8.3 mn t of condensate
Peak annual production
n/a
n/a
24
GAS CONDENSATE – PREMIUM PRODUCT Gas condensate production capacity mn tonnes
Yamburg 4.7
Novy Urengoy
5.5
Yuzhno-Sakhalinsk Orenburg
Astrakhan
0.2
Tomsk 0.3
0.1 3.7
Gas condensate production1 20 18
mn tonnes
16 14 12 10
11
12
13
2010
2011
2012
15
15
15
16
17
2013
2014
2015Plan
2016F
2017F
8
Calculations may diverge due to rounding 1 Management estimates; excluding associate companies’ production
INVESTOR DAY 2015 HONG KONG, SINGAPORE
25
EXPORT ALEXANDER MEDVEDEV DEPUTY CHAIRMAN OF GAZPROM MANAGEMENT COMMITTEE
INVESTOR DAY 2015 HONG KONG, SINGAPORE
26
EUROPEAN NATURAL GAS MARKET DYNAMICS Balance of European Gas Consumption, bcm1 700
600
577.3
564.2
500 400
228.5
231.6
593.1
260.7
587.4
262.6
599.8
585.9
274.0
274.6
565.2
258.2
602.0
290.3
557.3
546.8
538.2
266.7
254.2
255.4
478.4
214.3
300 200
335.8
345.6
332.4
324.8
311.9
325.2
307.3
311.7
290.6
292.6
282.8
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
100 0 2003
INDIGENOUS PRODUCTION 1 GCV
IMPORTS (+BALANCE OF STORAGE)
30.0%
SOURCES: IEA, EUROSTAT , GAZPROM EXPORT ESTIMATES
Demand for Gas Dropped Due to
30.6%
25.4%
MILD WEATHER
2012
2013
2014E
CONSUMPTION
= 8850 KCAL PER MCM, T = 20°C
Gazprom’s Share is Stable
264.1
2014E
INVESTOR DAY 2015 HONG KONG, SINGAPORE
COMPETITION FROM RENEWABLES AND COAL
Weather index (HDD + CDD) for Q1-Q3 2014 in Europe is 13% lower vs. average
Power generation makes 20% in the European gas mix. In Q1-Q3 2014 it decreased by 14%
27
RELIABLE GAS DELIVERIES TO EUROPE Near 50 years of impeccable operating track record1 180
bcm
160 140 120 100 80 60 40 20
1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E
0
Despite any crisis Gazprom has always fulfilled its export obligations and will do so in the future 1
Total gas sales in foreign markets excluding FSU
INVESTOR DAY 2015 HONG KONG, SINGAPORE
28
GAZPROM SALES TO EUROPEAN AND CIS MARKET Gazprom Gas Deliveries to Europe1 160
bcm 140.6
150.0 138.6
Gazprom Gas Deliveries to CIS and Baltics 161.5
138.8
146.6
60
$402
80
0
$383
$296
$385
$341
120
0 2011
2012
2013
2014E
120 1Q-3Q 2013
114.2
$205 per mcm
$235
2009
2010
2011
$308
2012
$274
$272
2013
2014E
Supply of the EU biggest gas producers
bcm 118.5
56.1
54.6
40
20
Supply of the biggest gas exporters to Europe1 160
64.4
$298
$302
2010
71.1
44.9
per mcm
2009
bcm 68.0
120
40
80
1Q-3Q 2014
bcm
84.1
1Q-3Q 2013
1Q-3Q 2014
82.1
80 80
55.6
45.1 40
40
27.4 23.8 4.6
5.0
4.7
1
30.5
4.3
0 GAZPROM JSC ALGERIA (INCL. LNG)
30.8
18.5 17.9
LYBIA (INCL. LNG)
QATAR
NIGERIA
0 NORWAY
UNITED KINGDOM
NETHERLANDS
European countries with Turkey (excluding CIS and Baltics)
INVESTOR DAY 2015 HONG KONG, SINGAPORE
29
MID-TERM PROVISIONS Short-term forecasts of European gas consumption by leading consulting companies (2008 consumption = 100%)
Actual forecasts of the leading consulting companies are significantly below previous estimates because they take into account the sharp drop in demand for gas in 1-3 quarters of 2014
Under current market conditions, 2015-2017 Gazprom export’s estimates for gas deliveries to Europe are 155-160 bcm/year depending on weather
102% 100% 100% 98% 96% 94% 92%
90.8
90%
Actual demand 2006-14E
89.7 89.0
CERA (2013-Nov)
88%
88.1
CERA (2014-Jun) 86%
PIRA (2013-Oct)
84%
PIRA (2014-Oct)
86.0
89.0 87.6
86.5 86.2
84.4 82.8
CEDIGAZ - pessimistic (2013-Jun) 82%
91.6
83.3
CEDIGAZ - base (2013-Jun) IEA (2013-May)
80%
79.8
IEA (2014-May)
78% 2006
2007
2008
INVESTOR DAY 2015 HONG KONG, SINGAPORE
2009
2010
2011
2012
2013
2014
2015
2016
30
HYBRID PRICING — CORNERSTONE OF THE EUROPEAN MARKET Natural Gas Prices in Europe Move in Common Trend
Gazprom is a Major Provider of Supply Flexibility to Europe 600
600
Mcm/Day
$/Mcm 550
Seasonal swing in Russian gas daily deliveries doubled from 1998 to 2014
500 500 400
450 400
300
350 200 NBP Day-Ahead 100
TTF Day-Ahead
300 250
BAFA 0
Jan-14
Jan-13
Jan-12
Jan-11
Jan-10
Jan-09
Jan-08
Jan-07
Jan-06
Jan-05
Jan-04
Jan-03
Jan-02
Jan-01
Jan-00
Jan-99
Jan-98
Sep-13
May-14
Jan-13
May-12
Jan-11
Sep-11
Sep-09
May-10
Jan-09
May-08
Jan-07
Sep-07
Sep-05
May-06
Jan-05
May-04
Jan-03
Sep-03
200
Roughly 2/3 of European gas import is still oil-indexed Oil price is still the main determinant of wholesale gas prices in Europe In 2008-2014, correlation between TTF and 6-month moving average of oil price was equal to 0.8 INVESTOR DAY 2015 HONG KONG, SINGAPORE
31
OBJECTIVE OF DECOUPLING OIL AND GAS PRICES NOT ACHIEVABLE IN A FORESEEABLE FUTURE Oil-indexed Prices Still Dominant in European Gas Imports1
Forward Prices Put Henry Hub-based Cost-Plus Pricing in Europe Under Question2 360
2,7% 2,4% 3,5%
$/Mcm
340
30.1% 320 21,5%
42,1%
300
280 2,4% 3,5% 1,8%
9,3%
260 10,8%
69.9% 240
Nov-19
Aug-19
May-19
Feb-19
Aug-18
Nov-18
Feb-18
May-18
Nov-17
Aug-17
May-17
other LNG hub-indexed
Feb-17
Gazprom hub-indexed
Nov-16
Qatar hub-indexed
Aug-16
Norway 2/3 hub-indexed
NBP Forward Curve 200 Feb-16
other LNG oil-indexed
Henry Hub-Based Cost-Plus Prices Range
May-16
Qatar oil-indexed
220
Aug-15
Libya oil-indexed
Nov-15
Algeria oil-indexed
May-15
Norway 1/3 oil-indexed
Feb-15
Gazprom oil- and quasi-oil-indexed
1 In 2
1-3Q 2014; for purposes of this comparison Europe is regarded without Norway The price includes transportation from Henry Hub to Lake Charles, LA, liquefaction, transport, and regasification in the U.K. or Belgium SOURCE: PIRA
INVESTOR DAY 2015 HONG KONG, SINGAPORE
32
GAS DEMAND WILL EVENTUALLY RETURN TO EUROPE Bright Spots: New Applications for Gas in Europe In 2035:
Natural Gas in Power Generation Rebound + 60 bcm
+ 50 bcm
207 bcm
139 bcm
234 bcm
2010
2014E
2035F
+ 30 bcm
SOURCES: IHS, GAZPROM EXPORT ESTIMATES
Small-scale CHP
Bunkering
Road transport
By 2035, bright spots could add 140 bcm to total demand or 25% above current levels
Small-scale CHP offers low-cost energy and tax benefits.
Environmental restrictions provide incentive for broader use of LNG in bunkering and road transport.
INVESTOR DAY 2015 HONG KONG, SINGAPORE
Due to:
aging coal and nuclear plants retirement;
obligatory CCS for new-built coal power stations (UK);
adjustment of the carbon emission allowances market.
33
ENTERING NEW GAS MARKETS Gazprom in Asia-Pacific
WESTERN ROUTE PROJECT
Gazprom is set to build a diversified gas sales portfolio in Asia comprising both pipeline gas and LNG:
EASTERN ROUTE PROJECT
November, 2014 Framework Agreement Signed
In 2014 we finalized a long term SPA with CNPC for supplying 38 bcma of natural gas to China via Eastern Route pipeline. The deal will allow Gazprom to expand its gas transportation facilities in Eastern Russia and diversify pipeline exports.
Further negotiations and firm agreements
A broad geography of LNG deliveries to Asia is set to expand with the launch of new LNG projects, making Gazprom one of the most active players in the Asian market.
May, 2014 SPA signed September, 2014 Start of construction works Not earlier than 2018 Estimated commissioning date
Pipeline gas exports to China are planned to reach 68 bcm/year in 2020+
Gazprom LNG Supply Source Structure 2014
2025
1%
14% 18% 46%
Europe
36% 85%
AsiaPacific
Atlantic
LNG from Gazprom projects
LNG deliveries by Gazprom Group
INVESTOR DAY 2015 HONG KONG, SINGAPORE
Pipeline gas deliveries by Gazprom
LNG Under Term Contracts
Spot Trading
Gazprom will supply >30 mmt/year of LNG in 2022+ globally 34
GAZPROM LNG BUSINESS
Existing supply sources
Vladivostok LNG 10 mmt/year
Sakhalin-2 10 mmt/year Gazprom Offtake 1 mmt/year
Baltic LNG 10 mmt/year
mmt
Sakhalin-2 T3 5 mmt/year
Total Output 25 mmt/year
Global Contracted LNG Volumes vs. Demand 500
Third-party supply sources
New Gazprom LNG Projects
35
400
300 200
Sakhalin-2 T3
20
Baltic LNG
15
Vladivostok LNG
10
Yamal LNG
0
Highlights
up to
2.9 mmt/year
LNG contracted under LT HOA with Yamal LNG project
INVESTOR DAY 2015 HONG KONG, SINGAPORE
mmt
25
0
2014
Gazprom Offtake 2.9 mmt/year
Third party term volumes
5
Colombia FLNG Sakhalin-2
2015
2025 SOURCE: WOOD MACKENZIE
Gazprom Offtake 0.5 mmt/year
30
100
2020
Yamal LNG 16.5 mmt/year
Gazprom LNG Portfolio Development1
Projected LNG Demand
2015
Colombia FLNG 0.5 mmt/year
1
2020
2025
These volumes do not include spot trade
0.5 mmt/year
2 LNG Carriers
LT GAIL SPA
LNG contracted under MT SPA with Colombia LNG project
Newbuilds Velikiy Novgorod and Pskov were delivered to Gazprom
Went “live” (CP lifted)
52 Cargoes were delivered by GM&T to Asia-Pacific and Atlantic markets
35
GAZPROM ACTIVITIES IN THE GLOBAL NGV MARKET Bunkering
On-road transport
LNG consumption as bunker fuel in Baltic and Northern seas in 2015-2025
Gazprom Group companies G4T assets
4,5 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0
mt
GERMANY
Gazprom Germania GmbH (100% owned by Gazprom export): 23 stations
CZECH REPUBLIC
Gazprom Germania GmbH: 6 stations + 3 in the process of construction
Vemex (more than 50% owned by Gazprom Germania GmbH): 5 own stations + supplying 8 third party stations
Gazprom Germania GmbH: 1 LNG station +1 in the process of construction
Cryogas (100% owned by Gazprombank): EPCcontractor in SSLNG segment
SLOVAKIA
Vemex: gas supply to 1 third party station
VIETNAM
JV between Gazprom and Petrovietnam: development of NGV-infrastructure and gas supply to gas-filling stations
POLAND
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 SOURCE: SSPA SWEDEN AB
Pilot project: port of Rostock (more than 13 mln tons of cargo and more than 2 mln passengers per year) Project task: Creating a distribution center in the port of Rostock for LNG supply to marine/land transport and to remote industrial customers
Participants:
Gazprom Group companies’ gas sales for on-road transport 20
mcm/year
15
Poland
10
Czech Republic/Slovakia
5 Germany
0 2012
INVESTOR DAY 2015 HONG KONG, SINGAPORE
2013
2014
2015
*
*Forecast
36
FINANCE ANDREY KRUGLOV
DEPUTY CHAIRMAN OF GAZPROM MANAGEMENT COMMITTEE – HEAD OF THE DEPARTMENT
INVESTOR DAY 2015 HONG KONG, SINGAPORE
37
GAZPROM POSITION IN GLOBAL ENERGY STRONG FINANCIAL POSITIONS AMONG OIL & GAS MAJORS
Comparative revenues, EBITDA and net income CAGR1 25
20
Top-5 oil and gas majors by EBITDA, 9M2014 LTM 60
% 19.5%
19.2%
USD bln
50
19.4%
40 15 30 10 20
6.9% 4.4%
5
4.4%
55,5
53,9
48,0 39,9
10
0
0 REVENUES
EBITDA GAZPROM
1
56,1
NET INCOME
TOP-10 OIL & GAS MAJORS
Median CAGR of top 10 oil & gas majors by market capitalization as of January 20, 2015
INVESTOR DAY 2015 HONG KONG, SINGAPORE
SOURCE: COMPANIES WEBSITES, BLOOMBERG AS OF JANUARY 20, 2015
38
SUSTAINABLE FREE CASH FLOW GENERATION
Gazprom FCF generation1 60
USD bln
51.9
51.2
8,3
7,5
43,6
43,7
2010-2011
2012-2013
50 40
50.8 12,9
34.7 7,7
30
21.7 3,0
20 7.9
10
18,7
8,2 -0,3 2004-2005
-1
37,9
27,0
2006-2007
2008-2009 CASH CAPITAL EXPENDITURES
9m2014 LTM
FREE CASH FLOW
Gazprom self funding2 150% 142%
140% 130%
134%
123%
120%
125%
110% 100%
140%
113%
110%
109%
100%
99%
97%
90%
105%
92%
80%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
9m2014 LTM
1
Period averages 2 OCF/Cash CAPEX
INVESTOR DAY 2015 HONG KONG, SINGAPORE
39
BALANCED CAPEX
60
USD bln
Gas Upstream Bovanenkovo field Development of fields related to the Eastern Gas Program and export to China Gas brownfields development and support
50
GAS UPSTREAM
50
2015 Priorities
55
46
GAS DOWNSTREAM OIL 40
POWER GENERATION OTHER
37
35
32
CASH CAPEX 30
26 23 18
20
Oil Novoportovskoe, Messoyakha and other greenfields development, brownfields support and refining modernization
12 10
10 7
0 2003
2004
2005
2006
Gas Downstream Bovanenkovo-Ukhta pipeline GTS Extension – Southern Corridor Preliminary works, roll out of the Eastern Gas Program and China export project
2007
2008
2009
2010
2011
2012
2013 2014E 2015F
Power generation Investments in new capacity
CapEx peak in 2010-2013 is associated with investments in greenfields development, construction and development of gas transportation routes from Yamal and North of Western Siberia, Eastern Gas Program, South Stream project.
CapEx drop in 2014-2015 follows completion of peak phases of key investment projects realized in 2010-2013 and Rouble depreciation.
SOURCE: COMPANY DATA, MANAGEMENT ESTIMATES
INVESTOR DAY 2015 HONG KONG, SINGAPORE
40
CAPEX EFFICIENCY
CAPEX: Gazprom vs Russian oil majors1 80
CAPEX/hydrocarbon production: Gazprom vs Russian oil majors1 16
USD bln
70
47,8
43,7
43,6
37,9
37,1
40
32,4 26,2
30
27,0
11,5
12,2 12,5
10,4
10
8,8
8,2
8 6
18,7
13,2
12,9
12 49,2
50
5,2
4
10
2 0
0 2006-2007
2008-2009 GAZPROM
1
14,4
14
60
20
USD/boe
Period averages
2010-2011
2012-2013
9m2014 LTM
RUSSIAN OIL MAJORS AGGREGATE
2006-2007
2008-2009 GAZPROM
2010-2011
2012-2013
9M2014LTM
RUSSIAN OIL MAJORS AGGREGATE
SOURCE: COMPANY DATA
SOURCE: COMPANY DATA
CAPEX of Gazprom is historically comparable to that of the Russian oil industry, including Transneft
The largest portion of Gazprom CAPEX in 2009-2013 was allocated to the development of gas transportation assets
In 2009-2013 Gazprom put onstream Yamal, a new gas production province capable of becoming the main source of gas supplies for the next several decades
Per-barrel volume of Gazprom CAPEX is close to that of Russian oil majors.
INVESTOR DAY 2015 HONG KONG, SINGAPORE
41
TOP RUSSIAN BORROWER One of the lowest levels of leverage, 9M2014
Debt maturity profile
**
140 120
21%
26%
38%
33%
33%
31%
36%
39%
13%
14%
100
Debt, USD bln
*
80 60
17%
40 **
20
19%
24%
22%
18%
16%
2011
2012
2013
9M2014
0 0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
Net debt / EBITDA LTM *
Rosneft net debt is adjusted for prepayments on long-term oil supply agreements 1h2014 data
LESS THAN 1 YEAR
**
Cost of debt financing 10
A-
%
8
6.2% 5.4%
6 4
2.7%
2 2009
2010
2-5 YEARS
MORE THAN 5 YEARS
Gazprom credit ratings S&P, Fitch
0 2008
1-2 YEARS
2011
2012
WEIGHTED AVERAGE FIXED INTEREST RATE WEIGHTED AVERAGE FLOATING INTEREST RATE WEIGHTED AVERAGE INTEREST RATE
2013
9M2014
Moody's A3
BBB+
Baa1
BBB
Baa2
BBB-
Baa3
BB+
Ba1
BB
Ba2
BB-
Ba3
B+
B1
Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 S&P
MOODY'S
FITCH
INVESTMENT GRADE
SOURCE: BLOOMBERG, 9M2014 COMPANY DATA
INVESTOR DAY 2015 HONG KONG, SINGAPORE
42
DIVIDEND PAYOUT
Dividend per share 12
12M dividend yields of major oil & gas companies1 %
RUB / Share 25.0
10
24,1
30
25,5 25.0 25
8,97 8
10%
7.20
17,5 17,5 17,5 17,5
8%
20 6%
5,99
6
7,7%
5,8%
5,8%
5,8%
15
9,1
4
2,54 2,66
0,69
0
4,8%
4,8% 4,1%
11,5
2
5,3%
1,19
4,9
3,85
4%
3,8% 2,9%
10
2,39
1.50
5
2%
0,36
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
0
0%
DIVIDEND PAYOUT RATIO, % (RIGHT SCALE)
1 Dividend
yield is defined as approved dividends for the period divided by the share price as of December 31, 2014; Source: Companies data, FactSet
INVESTOR DAY 2015 HONG KONG, SINGAPORE
43
NATURAL HEDGING AGAINST ROUBLE VOLATILITY
Hard currency denominated revenues
Hard currency denominated cash OPEX
31%
Gas sales, Europe
16%
8% 14%
50%
75%
Gas production
3%
25%
1% 50%
75%
12% 100%
16% 5%
5% 2%
Electric and heat energy generation and sales
ROUBLES - 56%
EUR 33%
17%
Refining
13%
Debt distribution by currency
5%
Crude oil and gas condensate production
4% 1%
HARD CURRENCY* - 44%
0%
31% 6%
4%
4%
Other cash operating expenses
100%
Hard currency denominated CAPEX Transportation
6% 1%
Staff costs
3%
ROUBLES - 35%
25%
1%
Goods for resale
3%
HARD CURRENCY* - 65%
3%
Repairs
7%
Electricity and heat energy
0%
8%
Materials
Gas sales, Russia
Other revenues
13%
Transit of gas, oil and refined products
11%
Gas transportation
1%
8%
Taxes other than income
7%
Gas sales, FSU (ex. Russia) Crude oil, gas condensate and refined products domestic sales
20%
Purchased gas and oil
Crude oil, gas condensate and refined products export
RUB 14%
4% 2%
Distribution Gas storage
1%
HARD CURRENCY* - 21%
Other
3%
ROUBLES - 79%
0%
25%
50%
75%
Other 1%
100%
Data for revenues, cash OPEX AND CAPEX is adjusted on RUB-denominated amounts linked to hard currency * Hard currency — mainly USD and EUR
INVESTOR DAY 2015 HONG KONG, SINGAPORE
USD 52%
SOURCE: COMPANY DATA, MANAGEMENT ESTIMATES
44
SUBSTANTIAL RESILIENCE TO WORSENED ENVIRONMENT HIGHER STABILITY OF GAS PRICES, RUBLE DEVALUATION AND CONSERVATIVE FINANCIAL POLICY ENSURE STRONG FOOTHOLD IN DIFFICULT TIMES
Oil and gas prices in 2008-2010 crisis 160
RUB/USD rates during 2014 & 2008 oil price shocks
%
140
$/bbl
RUB/USD
70
140
120
60
120
100
50
80
40
60
30
40
40
20
20
20
10
100 80 60
0
0 1q08 OIL
1q09
1q10
GAZPROM GAS EUROPE
1q11 NBP
$bln
$/bbl
100 80
120
70
100
60
80
50
40
20
20
10
0
0
EBITDA
2010 NET DEBT
INVESTOR DAY 2015 HONG KONG, SINGAPORE
2011
2012
2013
OIL PRICE (RIGHT SCALE)
1q12
1q13
1q14
1q15
RUB/USD RATE
SOURCE: BLOOMBERG
$bln
$/bbl
120 100 80
40
40
0
1q11
Conservative financial policy improves FCF outlook
60
2009
1q10 OIL PRICE
60
2008
1q09
SOURCE: COMPANY DATA, BLOOMBERG
EBITDA and NET DEBT during 2008-2010 crisis 120
0 1q08
60
30
40
20
20 0 2008
2009
2010
CAPEX
2011
FCF
2012
2013
9M14 2015E LTM OIL PRICE (RIGHT SCALE)
45
DIVERSIFICATION OF CAPITAL MARKETS INCREASE OF GAZPROM GDR HOLDERS IN ASIA-PACIFIC
AsiaPasific 4%
AsiaPacific 10%
Other 0%
Northern America 48%
Europe 48%
Potential listing on Hong Kong or other Asian stock exchanges
Other 1%
Europe 43%
Northern America 46%
Gazprom obtains credit rating from an Asian rating agency
2008
2014
Gazprom GDRs were listed on the Singapore Stock Exchange
Growth of international investor base
Targeting 24-hour trading of the Company's securities on international platforms
Gazprom’s credit rating may potentially exceed the sovereign credit rating of Russia
Gazprom 2015 Investor Day held in Hong Kong and Singapore
Special focus on Asian markets during road shows and investor meetings
SOURCE: ANALYTIC SURVEY NASDAQ OMX, T1IR DECEMBER 2014
INVESTOR DAY 2015 HONG KONG, SINGAPORE
46
CORPORATE GOVERNANCE Information disclosure
Gazprom shareholding structure 2006 (AS OF 31.12)
2014 (AS OF 30.06)
Transparency of Gazprom's activities is ensured through 36,80%
38,37%
26,23% 13,20%
Over 18 years of audited IFRS reports publication Timely and complete disclosure of information (including on Gazprom's website) as required by applicable laws and regulations
Disclosure of all material information in the English language
38,37%
23,54%
10,74% 0,89%
10,97% 0,89%
RUSSIAN FEDERATION
RUSSIAN FEDERATION
ROSNEFTEGAZ*
ROSNEFTEGAZ*
ROSGAZIFIKATSIYA*
ROSGAZIFIKATSIYA*
HOLDERS OF DEPOSITORY RECEIPTS
HOLDERS OF DEPOSITORY RECEIPTS
OTHER LEGAL ENTITIES AND INDIVIDUALS
OTHER LEGAL ENTITIES AND INDIVIDUALS
Corporate governance improvement Actions taken in 2014
Actions in progress
Gazprom shares included in the First Level quotation list of Russian Stock Exchanges
Enhancement of the incentive programme for the members of the Board of Directors
Clearly defined information disclosure processes set by robust internal regulations
New indicators TSR and ROE (jointly weighing 30%) added to the KPIs for Management
Creation of a Corporate Secretary function
Equal access of all stakeholders to the disclosed information
The Corporate Ethics Committee established according to the Gazprom's Code of Corporate Ethics
Extension of the period up to 38 days for providing information materials for Shareholders Meetings
*
INVESTOR DAY 2015 HONG KONG, SINGAPORE
Improvement of Gazprom's website content Continued efforts for implementation of ethical business practices within the framework of the Corporate Ethics Committee's activities
Entities controlled by the Russian Government
47
VALUATION COMPARISONS VS PEERS
EV/2013 proved reserves*
EV/EBITDA 9M2014 LTM
25
8 17
16
14
15
5
13
5
5
7
5
4
4
4 8
10
3
3
1
2
4
2
2
2
1
Gazprom’s reserves — prms, other companies — sec Petrobras’ financial statements data is on 1H2014 *** Rosneft’s data is adjusted on prepayment on long-term oil supply agreements Market data as of 28/01/2015
Novatek
Rosneft***
Lukoil
Rosneft
PetroChina
Petrobras**
Total
BP
Shell
Chevron
3
2
3
Rosneft***
Rosneft***
PetroChina
Petrobras**
Total
BP
Shell
Chevron
Exxon
Gazprom
0
7
Novatek
69
6
Lukoil
61
Rosneft
59
6
PetroChina
55
Novatek
25
Lukoil
100
Rosneft
122
150
10
10
Petrobras**
188 192
13
Total
202
200
13 11
BP
229
250
16
Shell
268
18 16 14 12 10 8 6 4 2 0
Chevron
300
Exxon
Rosneft***
Novatek
Lukoil
Rosneft
311
P/E 9M2014 LTM
Exxon
350
PetroChina
Petrobras**
Total
BP
Shell
Chevron
Exxon
Gazprom
EV/2013 production
Gazprom
0
0
50
3
3
5
USD / boe
7 5
6
Gazprom
USD / boe
20
7
7
19
19
*
**
INVESTOR DAY 2015 HONG KONG, SINGAPORE
SOURCE: BLOOMBERG, COMPANY DATA
48
VALUE DRIVERS
1
3
INVESTOR DAY 2015 HONG KONG, SINGAPORE
Unparalleled Fundamentals
2
Sound Strategy & Strong Market Position
17% of global gas reserves
Natural gas is future of the world energy
72% of Russian gas reserves
Gazprom is a global energy major
14% of global gas production
30% share in the European gas market
73% of Russian gas production
>100% Reserve replacement ratio
Diversification of products and export markets is key to our business continuity
Improving Corporate Governance
4
Conservative Financial Policy
Focus on shareholders value
Impressive profitability
Solid dividend policy
Conservative CAPEX management
Increased level of transparency
Efficient system of OPEX management
Commitment to sustainable development
Strong liquidity ratios
49
CONTACTS FOR INVESTORS
ANDREY BARANOV Deputy Head of Directorate
E-mail:
[email protected]
IVAN KHROMUSHIN Head of Division Phone: (007) (495) 719-3143 E-mail:
[email protected]
INVESTOR DAY 2015 HONG KONG, SINGAPORE
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