Open Joint Stock Company Gazprom

• 10.0% of Gazprom Shares held in the Federal Property Fund to be purchased by Gazpromitself before 1 June 1993 at nominal value in exchange for privatisation vouchers. Thesewere to be placed within a year in the securities market and the proceeds were to be usedfor the development of natural gas fields in Yamal and other regions.Presidential Decree of the Russian Federation No. 399 of 20 March 1996 extended the originalperiod for which 40% of Gazprom Shares were to be retained in Federal ownership by a further threeyears. Pursuant to Presidential Decree of the Russian Federation No. 887 of 25 July 1998, thepercentage of Gazprom Shares to be retained within Federal ownership was reduced to 35%, inanticipation of the sale of 5% of the Gazprom Shares, of which 2.5% was subsequently acquired byRuhrgas during a privatisation auction held in December 1998.Although Gazprom's privatisation plan envisaged the sale of the other 2.5% of Gazprom Sharesin the second quarter of 1999, these Gazprom Shares remained in Federal ownership, together with the0.87% of Gazprom Shares not placed during the privatisation programme in 1993 and 1994.Accordingly, the total State share holding currently comprises 38.37% of Gazprom Shares. The GasSupply Law states that 35% of the UGSS owner's shares (i.e. Gazprom) must be retained in Federalownership for an indefinite period of time.Pursuant to the terms of a trust agreement dated 20 December 1997 (the "Trust Agreement")between the Government and Gazprom, Gazprom holds 35% of the Gazprom Shares in a trust for thebenefit of the Government, must keep them separate from its other assets and has certain reportingrequirements. Furthermore, Gazprom may not sell, transfer or otherwise dispose of these GazpromShares and may not issue derivatives on or pledge these Gazprom Shares without the written approvalof the Government. In the last two years Gazprom has not exercised their right to vote on behalf of theGovernment at any shareholder meetings, as Government representatives had exercised the right tovote their 35% shareholding themselves. In addition, Gazprom Shares could not be voted on certainmajor issues (including the election of members of the Board of Directors) without the written approvalof the Government. The Trust Agreement was originally valid until 31 March 1999 but its term wasextended on a rolling one-year basis until such time as either Gazprom or the Government providenotice to the other party that they wish to amend or terminate the Trust Agreement. As at the date ofthis Offering Circular no such notice had been given by either party.However, these Gazprom Shares were never transferred to Gazprom as "trust manager" inGazprom's share register and are currently voted by representatives of the Government. Pursuant toArticle 6 of the Federal Law "On Privatisation of State Property and Principles of Municipal Propertyprivatisation in the Russian Federation" No. 123-FZ dated 21 July 1997 (as amended), the Governmentproposes candidates to the Board of Directors and Audit Commission, to be approved by a GeneralMeeting of Shareholders. The Government also appoints representatives at General Meetings ofShareholders who are obliged to act in accordance with the directions of the Government. Currently,there are six Government representatives on the Board of Directors who can be replaced by theGovernment at any time.Gazprom's name was changed from RAO Gazprom to OAO Gazprom by a shareholders'resolution passed on 26 June 1998.Shareholding StructureCurrently, Gazprom's charter capital is RUR 118,367,564,500, consisting of 23,673,512,900shares with a nominal value RUR 5 each.Pursuant to Government Resolution No. 654 of 30 May 1997, Gazprom's shares are traded inRussia on the Moscow Stock Exchange, the St. Petersburg Stock Exchange, the Yekaterinburg StockExchange and the Novosibirsk Stock Exchange.Gazprom has held shareholders meetings since 1995, The number of shareholders hasdecreased from approximately 1,030,000 in 1995 to approximately 515,366 as at 13 May 2002.In accordance with the Presidential Decree of the Russian Federation No. 529 of 28 May 1997,foreign equity participation (as defined in Decree No. 529) in Gazprom was restricted to 9% of the21