Gazprom-AR2014

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Risk Management
Customs, currency and tax regulatory risks
Risk of changes in Russian currency regulations and tax legislation
While OAO Gazprom complies with the requirements of currency regulations and tax laws,
constantly monitors amendments and alterations to laws and other legal regulatory acts, assesses
and forecasts the extent of their potential implications for its operations, the risk of claims from
government authorities may not be ruled out.
Risk management/mitigation. Changes in currency and tax laws are monitored, and their
requirements are strictly followed in line with the best practices. The Company is focused on
cooperation with the government authorities to ensure contribution to the energy security of the
Russian Federation.
Risks related to changes in Russian rules on customs control and duties
Following the execution of the Treaty on the Eurasian Economic Union (EEU) in May 2014, a new
EEU Customs Code is expected to be enacted. Since the Code is not yet finalised, the risk
of additional customs requirements can not be ruled out if amendments are made to the rules
of customs control and export duty payment.
Risk management/mitigation. Gazprom Group is committed to strict compliance with all
requirements of customs laws, tracking proposed amendments to regulations at the earlier drafting
stages, and submits its proposals while interacting with the government authorities and stakeholders.
Financial risks
Foreign exchange, interest rate and inflation risks
A significant share of revenues is denominated in foreign currencies, while most of the costs are
denominated in Russian roubles. Exchange rate fluctuations have an impact on performance.
Risk management/mitigation. Foreign exchange and interest rate risks are hedged by:
— estimating the Gazprom Group’s net currency position and cash flow balance in terms of
currency, volumes and receipt dates;
— maintaining a balance of currencies in the debt portfolio close to the balance of revenue
currencies.
Credit and liquidity risks
Gazprom’s operations can be negatively affected by delayed or incomplete discharge of contractual
obligations by some counterparties.
Risk management/mitigation. A transparent policy is pursued to ensure the performance
of contractual payment obligations in respect of supplies. Foreign gas supply counterparties are
assigned an internal credit rating. The relations with credit institutions are subject to credit risk
limits revised on a regular basis.
Market risks
The key market risk factors include price risks associated with fluctuations of base product prices
underlying the export contract prices, as well as volume risks associated with a certain flexibility
that buyers have in terms of gas offtake.
Falling oil prices drive down natural gas prices. Revenues may decline if oil prices drop even
further or remain at the current level over a long period of time.
Risk management/mitigation. Risks are mainly managed by modifying existing, or entering
into new, contracts, and by determining approved types of transactions and financial instruments
and, accordingly, counterparties to enter into such transactions.
OAO Gazprom Annual Report 2014