Gazprom and Sovereign Affirm Commitment to Common Goals

21 June 2003

Gazprom's CEO Alexei Miller met in Moscow yesterday with the CEO and President of Sovereign Asset Management, Richard & Christopher Chandler.

Sovereign is the largest portfolio investor in Gazprom, and has been investing in Russia and Gazprom for almost ten years. Sovereign has a history of promoting good corporate governance in Russia and throughout the markets where it invests.

In the course of the meeting ways were discussed to improve corporate governance at Gazprom. Mr. Miller noted that "Sovereign's unwavering support as a long-term shareholder has played a major role in the course of development and introduction in Gazprom of higher corporate governance standards. This in turn has helped Gazprom to reinforce its position among leading international energy companies".

Based on the results of the meeting representatives of Sovereign Asset Management noted that they appreciate and support:

• Efforts by the Management of Gazprom to recover assets;
• Activities by Management to stabilize Gazprom's finances including the reduction of costs, optimization of the borrowing program, and the implementation of budgetary systems.
• Work by Management to bring in the introduction of rational tariff policies.

Alexei Miller assured the representatives of Sovereign Asset Management that:

• The Management Board of Gazprom would continue work to improve Gazprom's dividend policies with the aim to increase Gazprom's attractiveness to investors;
• The Management Board realizes the need to improve the trading in Gazprom shares within the framework of the acting legislation. This intention was reflected in the efforts to establish a mechanism for the trading of Gazprom shares on the MICEX. The launching of MICEX trading has been postponed, however, due to reasons beyond the control of Gazprom's Management Board.
• The Management Board of Gazprom will continue to work in cooperation with the Government of the Russian Federation to develop a plan of concrete steps and a time-schedule to liberalize the market of Gazprom shares and will inform market participants about the results of this work;
• The Management of Gazprom will remain committed to further increasing the transparency of the Company and will continue to work to improve the level of corporate governance;
• The current policy of Gazprom to cut costs and shed non-core assets will be continued.

"Gazprom has made remarkable progress in the last two years. However, much remains to be done. We believe that the corporate governance initiatives outlined today will create significant shareholder value and demonstrate that Gazprom is on track to become a core holding for international investment portfolios", said Mr. Richard Chandler.

About Gazprom Gazprom is Russia's largest company and the world's largest gas producer with over 500 bcm of gas production in 2002 and at least 18 tcm of proven gas reserves. Gazprom's gas exports supply 25% of European demand. Gazprom is also the world's biggest pipeline operator with 150,000 kilometers of high-pressure pipeline.

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