The Gazprom Board of Directors took notice of the information on the Company's preliminary 2011 operating results, projected Investment Program, Budget (Financial Plan) and Cost Optimization (Reduction) Program for 2013–2014.

The Board of Directors approved Gazprom's Investment Program, Budget (Financial Plan) and Cost Optimization (Reduction) Program for 2012.

Pursuant to the approved Investment Program for 2012, the total amount of investments will make up RUB 776.648 billion. At the same time, the amount of capital investments will account for RUB 709.604 billion, of which RUB 709.564 billion and RUB 40 million will be allocated for capital construction and acquisition of non-current assets accordingly. The amount of long-term financial investments will total RUB 67.044 billion.

The Investment Program 2012 was compiled with due regard to the preset deadlines for Gazprom's prioritized investment projects that have fundamental significance for attaining the planned levels of gas production and supply as well as for the Russian Federation in general. According to the Investment Program, 33 per cent and 52 per cent of the total capital construction costs will be transferred to gas production facilities, and gas transmission and underground gas storage facilities respectively.

According to the approved Budget for 2012, revenues and gains will total RUB 4.933 trillion while liabilities, expenditures and investments – RUB 5.114 trillion. External financial borrowings are determined at RUB 90 billion. The budget surplus will make up RUB 0.5 billion.

The Cost Optimization (Reduction) Program for 2012 envisages measures aimed at cost optimization (reduction) to result in a cumulative effect of RUB 19.6 billion.

The Board of Directors meeting highlighted that the Gazprom's 2012 Budget stipulates allocating RUB 198.621 billion (RUB 8.39 per share) for dividend payments according to the Company's 2011 operating results. The decision on the dividend amount will be adopted by the Company's shareholders at the annual General Shareholders Meeting based on the Board of Directors recommendation to be formulated in spring 2012.

Pursuant to the 2012 Investment Program, priority in capital construction costs allocation will be given to the following gas production projects: pre-development of the Bovanenkovskoye, Zapolyarnoye, Medvezhye, Urengoyskoye, Yamburgskoye and other fields.

The gas transmission priorities will include construction of the Bovanenkovo – Ukhta and Ukhta – Torzhok gas trunklines as well as the Gryazovets – Vyborg, Pochinki – Gryazovets and SRTO – Torzhok gas trunklines.

Funds will be allocated to implement projects in Russia's East, particularly to construct the Sakhalin – Khabarovsk – Vladivostok gas transmission system, a gas trunkline running from the onshore processing facility in the Kirinskoye gas and condensate field to the Sakhalin main compressor station as well as to pre-develop the Kshukskoye, Nizhne-Kvakchikskoye and Kirinskoye fields.

Pursuant to the document, funds will also be channeled for upgrading the major gas production and transmission assets, re-equipping underground gas storage facilities, constructing and retrofitting gas processing capacities as well as performing survey, geological exploration and production drilling in fields.

Funds are earmarked for implementing the Company's projects within the Russian Government-approved Program for Construction of Olympic Venues and Development of Sochi as a Mountain Climate Resort.

The Company will also invest in establishing its Industry-Specific Integrated Information and Management System.

The long-term financial investment plan for 2012 prioritizes, inter alia, Gazprom's participation in the project for the Shtokman field development as well as the Nord Stream and South Stream gas pipelines construction. In addition, the Company intends to allocate funds for power generation projects, including the Adler CHPS construction.

The projects in Africa, Bolivia, the UK, the Republic of Vietnam, Latin America and Uzbekistan will also be financed.

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