Open Joint Stock Company Gazprom

Neftegaspostavka filed two claims against Gazprom for damages resulting from Gazprom'srefusal to grant Neftegaspostavka access to its pipelines, allegedly in breach of anti-monopolyregulation. The first claim, relating to damages incurred in 1999, in the amount of RUR 177 million hasbeen granted by the court. The second claim, relating to damages incurred in 2000, in the amount ofRUR 726 million is pending.There has been recent press comment and speculation over potential proceedings surroundingrecent allegations made by a Russian Federal Tax Police official of tax evasion by Gazprom. However,as at the date of this Offering Circular no official statement had been issued by the Tax Police and noproceedings in this regard had been commenced. Gazprom believes that if any such proceedings areinstigated they will be unmeritorious.Local tax authorities in Moscow have recently demanded that Gazprom must pay RUR 29 billionto the budget on account of unpaid excise duties. The dispute arose out of differences betweenGazprom and the local tax authorities in the interpretation of excise duty regulations. Gazprom hasappealed the tax authorities' order in court and has successfully stayed its execution. The court isscheduled to consider Gazprom's appeal on 25 October 2002.The General Prosecutor's Office has been conducting an environmental audit on Gazprom toestablish compliance with Russian environmental regulations and has indicated that in certain instancesGazprom is in breach of such regulations. Whilst it is difficult to establish the cost of remedying any suchbreach, Gazprom does not believe any such additional cost to be material in the context of its businessas a whole.These proceedings and investigations have not had, and are not expected to have, individuallyor in the aggregate, a material adverse effect on Gazprom's business, operations and financial conditionor on Gazprom's ability to service its payment obligations under the Loan.Recent DevelopmentsThe financial information set out in the paragraph below is extracted from either the unaudited 30June 2002 consolidated accounts prepared in accordance with Russian Accounting Regulations andpublished by Gazprom on 24 July 2002 or the audited 31 December 2001 consolidated accountsprepared in accordance with Russian Accounting Regulations. Such extracted financial information isnot directly comparable to the financial information extracted from the Annual Data that is prepared inaccordance with IAS and set out elsewhere in this Offering Circular.As at 30 June 2002 current assets had increased to RUR553,835 million from RUR602,607million as at 1 January 2002, whilst total assets increased from RUR2,079,287 million as at 1 January2002 to RUR2,137,635 million.For the six month period ended 30 June 2002 Gazprom produced 264.8 bcm of gas, 4.8 milliontonnes of gas condensate and 348,600 tonnes of oil, an increase in gas production of 3.5 bcm and anincrease in gas condensate and oil production of 73,700 tonnes from the corresponding period in 2001.In the 6 month period ended 30 June 2002, Gazprom increased its exports of natural gas to Europe by2.2 bcm to 65.8 bcm from 63.6 bcm for the corresponding period in 2001. Exports to the CIS and BalticStates decreased from 23.9 bcm for the 6 month period ended 30 June 2001 to 23.1 bcm for the sixmonth period ended 30 June 2002.For the six month period ended 30 June 2002 net sales revenues increased by 15.1% to RUR298 billion from RUR 259 billion for the corresponding period in 2001. Gross profit for the 6 month periodended 30 June 2002 decreased by 61.6% to RUR 44 billion from RUR 114 billion as compared to thecorresponding period for 2001, primarily as a result of lower gas export prices. Pre tax profit for thesame period fell 74.4% to RUR 25 billion from RUR 98 billion for the 6 month period ended 30 June1001. Net profit fell 74.9% from RUR 64 billion for the 6 month period ended 30 June 2001 to RUR 16billion for the 6 month period ended 30 June 2002.57