A Gazprom delegation, led by Valery Golubev, Deputy Chairman of the Company’s Management Committee, paid today a working visit to the Kyrgyz Republic. As part of the visit Valery Golubev met with Igor Chudinov, Prime Minister of the Kyrgyz Republic and Tursun Turdumambetov, Chairman of the Kyrgyz State Property Committee.

The parties addressed the issues of cooperation deepening in the oil and gas sector, stressing in particular the join efforts in exploration and production of hydrocarbons, development of wholesale and retail markets of petroleum products in the Republic as well as transportation and distribution of natural gas in Kyrgyzia.

Special attention was placed on the terms & conditions and forms of Gazprom’s participation in the privatization of Kyrgyzstan’s natural gas and oil infrastructure.

The meeting participants confirmed their interest in further promoting the mutually beneficial long-standing partnership between Gazprom and Kyrgyzia across the entire spectrum of the bilateral cooperation.

Background:

The proven reserves of natural gas in the Kyrgyz Republic are estimated at 6 billion cubic meters. Gas field development is hindered by the geologic peculiarities and insufficiently developed infrastructure. The domestic production of natural gas in the Republic averages 30 million cubic meters per annum. Gas consumption – around 750 million cubic meters per annum.

In May 2003 Gazprom and the Government of the Kyrgyz Republic signed the long-term Agreement of Cooperation in the gas industry for a period of 25 years.

In January 2006 Gazprom and the Government of the Kyrgyz Republic signed the Memorandum of Intent to establish a joint Russian-Kyrgyz venture in the oil and gas industry. In May 2007 Gazprom and the Kyrgyz Government signed the Agreement on the common principles for the geological survey of subsoil resources in order to lay the cornerstone for the joint venture operation, under which:

- in February 2008 Gazprom obtained two licenses for the right to use the subsurface resources of Kugart and Eastern Mailu-Suu IV areas;

- in July 2008 Gazprom and the Kyrgyz Government approved the 2008-2011 Stepwise Program for geological survey of the subsurface resources in the said areas;

- in December 2008 Gazprom completed the geological exploration projects in these areas.

In October 2008 Gazprom and the Republican Government signed the Memorandum of Understanding to develop cooperation within the privatization of a part of the state-owned stake in Kyrgyzgaz. The Memorandum is targeted at fostering mutually beneficial long-term cooperation in gas transportation and distribution in Kyrgyzia. Within the Memorandum:

- in January 2009 a joint working group was shaped;

- in February 2009 the Program of Activities was approved to elaborate the joint principles and key provisions of the project.

In 2006 Gazprom neft Asia, a subsidiary of Gazprom Neft, was established in Kyrgyzstan. At present, the company is the country’s largest operator on the wholesale and retail markets dealing with petroleum products and liquefied hydrocarbon gases.