Message from Gazprom CEO

Dear friends,

The Gazprom Group is among the leaders of the global energy market. Our operations influence the lives of millions of people both in Russia and abroad. Therefore, the needs and interests of society are at the core of our large-scale activities.

Gazprom’s top priorities include reliable gas supply to consumers, environmental protection, ensuring safe labour conditions and staff development, as well as facilitating social and economic development of the Russian regions.

Consumer access to natural gas is a prerequisite for a high quality of life. Gazprom is the key supplier of this energy source to the Russian market and its largest exporter globally. In 2018, we sold 201.9 bcm of gas abroad. The share of our gas consumed in Europe increased to 36.8%. Domestic supplies increased as well: in 2018, they amounted to 239.7 bcm. The gas penetration rate in the Russian regions reached 68.6%.

Gazprom takes due care of energy resources replenishment. In 2018, we added 796.6 bcm of gas in Russia as a result of geological exploration activities, which is 1.6 times more than was produced during the Reporting Year. For 14 years running, we have maintained gas reserves growth rate above production rates.

We focus a lot on environmental matters: improvement of the energy efficiency of our operations, sustainable use of natural resources, and minimization of environmental footprint. To that end, Gazprom implements a comprehensive set of activities, in particular, it develops the Environmental Management System, upgrades production facilities, introduces energy-efficient equipment and innovative green technologies, and consistently reduces greenhouse gas emissions. Gazprom is also paving the way for converting motor vehicles to natural gas as the most efficient and environmentally friendly type of fuel. In 2018, Gazprom built more than 20 NGV refuelling stations in Russia, and the Company’s country-wide network of refuelling stations now comprises more than 300 facilities.

Our environmental protection efforts are highly appreciated by reputable experts. Gazprom has the lowest carbon footprint among the leading global oil and gas companies according to the international climate ranking of the Carbon Disclosure Project (CDP). Moreover, the Company traditionally holds the top position in the “Energy” Section of the CDP ranking for Russia.

Gazprom does not rest on its laurels. During the Reporting Year, the Company signed the Guiding Principles on Reducing Methane Emissions Across the Natural Gas Value Chain. We will continue working in this direction and promoting these ideas among other market participants.

The Gazprom Group is one of the largest employers in the Russian Federation, with its team comprising over 466,000 people. We ensure advanced labour safety and strictly adhere to regulatory requirements. We carry out comprehensive work aimed at advanced training and professional retraining of our employees.

Gazprom is a socially responsible Company. We support sports, culture and arts, and provide assistance to educational and healthcare institutions. For instance, the Gazprom Group participated in the construction and launch of the first Palliative Care Centre in the Toksovo settlement, Leningrad Region, for children suffering from oncological diseases and infant cerebral palsy which was opened in 2018. Gazprom on an annual basis provides financial support to the St. Petersburg State Autonomous Healthcare Institution “Hospice for Children” in order to ensure the procurement of pharmaceuticals and expendable medical materials.

We pay the utmost attention to the preservation of the original living environment, local economy and trade of the indigenous peoples of the North where the core resource base of Gazprom is located. For example, we build our production facilities in such a way that they would not interfere with the traditional lifestyle of the local population.

For more than ten years, we have been implementing the “Gazprom for Children” Program which is a unique project in terms of its scale. In 2018, the Program covered 25 regions of Russia, and the construction of 51 sports facilities was completed within its framework.

Gazprom develops steadily and shows strong financial performance. In 2018, we achieved record-high levels of revenue, EBITDA and net income. The positive free cash flow was preserved amid simultaneous implementation of several large-scale infrastructure projects. The total taxes and fees of similar kind paid by Gazprom exceeded RUB 3.2 trillion in 2018, which is 28% more than in 2017.

On the basis of the outcomes of the Reporting Year, it was resolved to pay record-high dividends to shareholders in the amount of RUB 393.2 billion, or RUB 16.61 per share, which is an unprecedentedly high dividend payout in the history of Gazprom.

Dear friends,

Sustainable development remains an invariable guiding principle for us. We will continue pursuing it in our work for the sake of the present and future generations.