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I TALIA E RUSSIA – FORO DI DIALOGO

I TALIA E RUSSIA – FORO DI DIALOGO. Ve kselberg V. M arzo 200 7. B y 2030 net gas imports may account for two thirds of total consumption. Natural gas consumption in OECD Europe, reference case.

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I TALIA E RUSSIA – FORO DI DIALOGO

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  1. ITALIAE RUSSIA – FORO DI DIALOGO Vekselberg V. Marzo 2007

  2. By 2030 net gas imports may account for two thirds of total consumption. Natural gas consumption in OECD Europe, reference case • Natural gas is expected to be the fastest growing fuel source in OECD Europe (power generation sector) • The bulk of European gas demand growth is provided by just three countries: Italy, Spain and Turkey • Net gas imports to OECD Europe expected to grow by 120-150 bcm in next 10 years, which is two thirds of European gas consumption. • Average market share of Gazprom in EU countries is 27% bcm Source: IEA Gazprom’s exports to Europe outlook Source: Gazprom

  3. Call on Independents to Increase Sharply Forecast of gas demand and supply by sources • Gas Demand • Increasing domestic Russian demand fueled by increase in economic growth and electricity consumption • Growing European and FSU demand • Gazprom Supply • New production from incremental developments will match decline in 3 major fields • Significant capex required to keep supply flat. 2005-2015 1% CAGR supply growth • Assumes 70 bcma Central Asian supply in 2015 • Opportunity for Independents • Supply opportunity from independents increase from 105 bcma in 2006 to over 200 bcma in 2015 bcm 900 800 700 600 500 400 300 200 100 2005 2010 2015 Russia Demand Gazprom Supply Imports Central Asia Europe Demand FSU Demand Independents Source: IEA, TNK-BP

  4. The Rise of Russian Independent Gas Russian Gas Production Breakdown (Bcm) • Total non-Gazprom production up by over 100% during the past 10 years (to 106 Bcm in 2006) • Free gas production up by ~50 BCM since 1997 • Associated gas production by Russian oil companies back up to 1990 levels Independents can deliver 140 Bcm/y additional production capacity from existing reserves by 2015! Independents’ Gas Production Forecast (Bcm/Year) World’s Leading Gas Producers (BCMA) Source: Ministry of Industry and Energy; UBS

  5. BACKUP SLIDE

  6. Gas demand in Italy is expected to grow by 25 bcma to 2015; Gazprom will compete for Italian market with Algeria’s Sonatrach Italian gas consumption dynamics • Italy is the second largest gas market in continental Europe with consumption of 85 bcm in 2005. • Italy is the second largest European market for Gazprom, representing 14% of its exports to Europe. Gazprom provided 24% of Italian gas demand in 2005. • OIES predicts that gas demand in Italy should increase by 18 bcm to 2010 and by 25 bcm to 2015. • Algeria has two pipeline expansion projects which will allow to increase its exports to Italy by about 10 bcma. Source: OIES Past and projected Gazprom’s exports to Italy If Gazprom were to preserve its market share, it should increase gas deliveries to Italy by more than 6 bcma by 2015. Source: Gazprm, EIA, SNBD estimates

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