The Gazprom Headquarters hosted today a working meeting between Alexey Miller, Chairman of the Gazprom Management Committee and Igor Chudinov, Prime Minister of the Kyrgyz Republic.

The meeting addressed further development of the bilateral cooperation in the petroleum sector. Special attention was paid to the prospects for the joint hydrocarbon exploration and production, development of the Republican wholesale and retail markets of petroleum products, as well as transportation and distribution of natural gas in Kyrgyzia.

The parties also discussed the terms & conditions and the forms of Gazprom’s participation in the privatization of gas infrastructure facilities in the Kyrgyz Republic.

Background:

The proven reserves of natural gas in the Kyrgyz Republic are estimated at 6 billion cubic meters. The development of natural gas fields is hindered by the geologic peculiarities and insufficiently developed infrastructure. Domestic production and consumption of natural gas average 30 million cubic meters and 750 million cubic meters per annum.

In May 2003 Gazprom and the Government of the Kyrgyz Republic signed the long-term Agreement of Cooperation in the gas industry for the term of 25 years.

In January 2006 Gazprom and the Government of Kyrgyzia signed the Memorandum of Intent aimed at establishing a joint Russian-Kyrgyz venture in the oil and gas industry.

In May 2007 Gazprom and the Government of Kyrgyzia signed the Agreement on the common principles for the geologic survey of subsoil resources in order to lay the cornerstone for the joint venture operation. Within the Agreement the following activities were carried out:

- in February 2008 Gazprom was granted two licenses for the right to use the subsoil resources in the areas of Kugart and Eastern Mailu-Suu IV;

- in July 2008 Alexey Miller, Chairman of the Gazprom Management Committee and Igor Chudinov, Prime Minister of Kyrgyzia approved the Stepwise Program for geological survey of the subsoil resources in these areas for 2008-2011;

- in December 2008 Gazprom finished the development of geological prospecting projects in the said two areas.

In October 2008 Gazprom and the Government of the Republic signed the Memorandum of Understanding to develop cooperation within the privatization of a part of the state-owned stake in Kyrgyzgaz for the purpose of developing long-term and mutually beneficial cooperation in gas transportation and distribution in Kyrgyzia. In pursuance of the MoU, a joint working group has been shaped, which is presently developing an Action Plan aimed at elaborating the principles and terms for the project implementation.

In 2006 Gazprom neft incorporated a subsidiary – Gazprom neft Asia. By now, the company is the largest Kyrgyzia’s operator on the wholesale and retail markets of petroleum products and liquefied hydrocarbon gases.