Sustainability Report Natural Gas – Energy for Present and Next Generations OAO GAZPROM | Sustainability Report | 2008–2009 Table of Contents Message from Alexey Miller, OAO Gazprom Management Committee Chairman ......................................... 4 About Report and Reporting Procedures ........................................................................................ 6 Gazprom Group Profile ................................................................................................................................. 9 Gas Energy – Foundation for Sustainable Development .......................................................... 16 Strategic Goal and Mission ......................................................................................................................... 17 Corporate Governance ................................................................................................................................ 23 Innovation Activities .................................................................................................................................... 29 Reliability ................................................................................................................................................ 34 Resource Base ............................................................................................................................................ 35 Gas Production ........................................................................................................................................... 36 Gas Transmission Infrastructure ................................................................................................................. 40 Commercial Conditions of Gas Deliveries ................................................................................................... 42 Rationality ............................................................................................................................................... 48 Energy Saving ............................................................................................................................................. 49 Associated Petroleum Gas .......................................................................................................................... 51 New Types of Energy .................................................................................................................................. 52 Natural Gas Products .................................................................................................................................. 54 Safety ....................................................................................................................................................... 56 Process Safety ............................................................................................................................................ 57 Environmental Safety .................................................................................................................................. 61 Climate Change ........................................................................................................................................... 66 Responsibility ........................................................................................................................................ 68 Regional Policy ........................................................................................................................................... 69 Social Projects, Sponsorship and Charity ................................................................................................... 76 Employees’ Energy – the Company’s Strategic Resource ........................................................................... 80 Third-Party Assurance Statement ................................................................................................... 90 GRI Standard Disclosures and Performance Indicators as Used in Report and GRI Application Levels ............................................................................ 94 Acronyms and Abbreviations .......................................................................................................... 101 Contacts ................................................................................................................................................ 102 Note Hereinafter the terms “Gazprom”, “Gazprom Group”, “the Group” refer to the group of companies comprised of OAO Gazprom and its subsidiaries. The terms “OAO Gazprom” and “the Company” refer to the parent company of Gazprom Group, i.e. Open Joint Stock Company Gazprom (excluding representative offices and service branches). 3 OAO GAZPROM | Sustainability Report | 2008–2009 Message from Alexey Miller, OAO Gazprom Management Committee Chairman For the first time in the corporate history Open Joint Stock Company Gazprom presents its Sustainability Report. Today Gazprom is a global energy company, the world’s largest natural gas producer and a leader of the Russian economy. Gazprom’s large-scale activities have an impact on the lives of millions of people. This fact predetermines both an immense responsibility of Gazprom and a considerable public interest in a variety of the Company’s development aspects that are sometimes beyond the scope of statutory reports. In this Report we have strived to provide a thorough insight into the principles we adhere to in the process of identifying our Company’s development ways. The long-lasting history of Gazprom shows that the strategy pursued by the Company is in line with the sustainable development model which has recently gained wide public recognition. We believe that the primary challenge in achieving sustainability is balanced and efficient use of production resources to the benefit of the present and future generations. The sustainable development benchmarks help us build the Company’s business in the context of the global efforts aimed at addressing such critical international problems as energy efficiency, emissions reduction and social progress acceleration. 4 OAO GAZPROM | Sustainability Report | 2008–2009 Message from Alexey Miller, OAO Gazprom Management Committee Chairman The comprehensive analysis of the economic, environmental and social indicators of Gazprom’s performance carried out during the preparation of this Report has confirmed that the Company adheres to the basic principles of sustainable development. Reliability. Gazprom’s status of a reliable blue fuel supplier combines a solid and fast-growing resource base, unrivalled technologies of gas production under harsh environmental and geological conditions, a potent and constantly developing gas transmission infrastructure, a well-established system of long- term contractual arrangements with partners. Rationality. Efficiently meeting current and future needs of consumers is our main driver in determining gas production volumes. This is the only approach to making balanced decisions on the order of priority for large-scale field development projects and their synchronization with gas transmission development. A reasonable approach to devising gasification schemes for Russian regions allows us to comprehensively take into account local geographic and demographic features as well as the specificity of regional fuel balances. Rational use of production resources by Gazprom is an explicit indicator of the Company’s efficiency and, ultimately, competitiveness. Resource conservation is therefore an integral element of the production processes and falls within our permanent focus of attention. Safety. The industry specificity predetermines stringent health, safety and environmental (HSE) requirements for Gazprom’s companies. The process safety management system introduced at OAO Gazprom’s facilities is based on international standards, and the extensive corporate standardization system sets safety requirements for all lifecycle stages of gas production, transmission, processing and utilization facilities. In 1995 Gazprom was one of the first Russian companies to develop a corporate Environmental Policy. The restated version of this document was endorsed in 2008. The Policy updates the environmental protection challenges and outlines additional obligations assumed for securing sustainable development. Social Responsibility. Having operations in over 80 constituents of the Russian Federation, we endeavor to ensure that the sustainable development of our business contributes to socioeconomic progress, a better environmental situation and greater prosperity of people in Russia’s regions. The large-scale social programs implemented by the Company are not an abstract “social burden” but indispensable investments in social stability which is a prerequisite for long-term business development. We look upon the publication of OAO Gazprom Sustainability Report as an important factor for enhancing the corporate governance structure, a good way of self-analysis and an efficient communicative tool. We look forward to receiving extensive feedback that will help us better understand what people expect from our Company’s performance. Alexey Miller Management Committee Chairman 5 About Report and Reporting Procedures OAO GAZPROM | Sustainability Report | 2008–2009 About Report and Reporting Procedures Sustainable Development Concept Sustainable development is construed as a modern society development pattern which implies meeting