Gazprom

Environmental & Social Information • Jun 29, 2018

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RNS Number : 0650T

PJSC Gazprom

29 June 2018

PJSC GAZPROM

CONSOLIDATED REPORT ON PAYMENTS TO GOVERNMENTS

FOR THE YEAR 2017

1          GENERAL INFORMATION

This consolidated Report on payments to governments (the "Report") has been

prepared under the requirements of the UK Financial Conduct Authority's Disclosure Rules and

Transparency Rules 4.3А.

The Report contains information on payments made to governments in 2017 by PJSC Gazprom and its subsidiaries (the "Gazprom Group") engaged in exploration, prospection and extraction of mineral resources ("extractive activities"). The Report excludes payments made by

the Gazprom Group entities not engaged in extractive activities.

2          BASIS FOR PREPARATION

For the purposes of the Report, the Gazprom Group subsidiaries are defined as entities controlled by PJSC Gazprom.

Associates and joint ventures accounted for using the equity method are excluded from

the Report.

The Russian Ruble is the presentation currency of the Report and the consolidated financial

statements of the Gazprom Group prepared in accordance with the International Financial Reporting Standards ("IFRS"). All amounts disclosed in the Report are presented in millions of Russian Rubles.

Payments made in foreign currencies have been translated into Russian Rubles at the average

annual exchange rates of respective currencies set by the Central Bank of the Russian

Federation.

For the purposes of the Report, the term "governments" mean any national, federal or local authorities, ministries or agencies authorized for collection of taxes, budgetary and other payments in accordance with applicable legislation effective as of the date of the payment obligation occurrence. In the context of the Report, governments also include legal entities authorized

for collection of taxes, fees and other payments imposed by governments.

The Report includes all direct and indirect payments made to governments.

For the purposes of the Report, payments to governments include the following:

а) Production entitlements;

b) Taxes levied on the income, production or profit of companies (mineral extraction tax, profit tax (including profit tax paid by PJSC Gazprom consolidated group of taxpayers), land tax and other similar taxes), except for those specified in paragraph (h) below;

c) Royalties;

d) Dividends (except for those specified in paragraph (i) below);

e) Signature, discovery and production bonuses;

f) License fees, rental fees, other considerations for obtaining and using licenses or concessions;

g) Payments for infrastructure improvements (except for social expenses).

2          BASIS FOR PREPARATION (continued)

For the purposes of the Report, payments to governments do not include the following:

h) Turnover taxes (value added tax, sales tax and other similar taxes) or taxes withholding by

an entity acting as tax agent (personal income tax and other similar taxes);

i) Dividends paid to shareholders that are governments, on the same terms as to other

shareholders;

j) Export duties and other payments related to export and transportation of mineral resources.

There were no payments of royalties (c), dividends (d) or bonuses (e) to governments in 2017.

The Report presents payments breakdowns by the following categories:

·    Countries in which the Gazprom Group's organizations are engaged in extraction activities and projects implemented as part of extractive activities;

·    Countries in which the Gazprom Group's organizations are engaged in extraction activities and governments (budgets) for the benefit of which payments were made.

For the purposes of the Report, the term "project" means a legal entity engaged in the extraction activity. This definition is based on the existing tax regulations in the Russian Federation where the Gazprom Group performs most of its extraction activities. In accordance with the effective tax legislation in the Russian Federation, only mineral extraction tax can be determined for each particular field. All other taxes are calculated and collected at the level of a legal entity as a whole and cannot be allocated to particular fields.

If a Gazprom Group company is involved in several types of business activities (including extraction activities) and a portion of its tax obligations directly related to extraction activities cannot be determined, the whole tax payment is included in the Report.

Note 31 "Net cash from operating activities" in the consolidated financial statements of

the Gazprom Group prepared in accordance with IFRS  for the year 2017 discloses information on taxes paid and other similar payments made in cash by all subsidiaries of the Gazprom Group (regardless of their types of business activities) in 2017.

3          PAYMENTS TO GOVERNMENTS

The table below sets forth information on payments to governments,

summarized by countries and projects:

		Production entitlements	Taxes on income, production or profit	License fees, rental fees, entry fees and other considerations for obtaining and using licenses or concessions	Payments for infrastructure improvements	Total
	Russian Federation	1,236	1,020,330	2,410	2,238	1,026,214
	PJSC Gazprom	17	164,914	263	-	165,194
	LLC Gazprom dobycha Yamburg	-	196,473	69	22	196,564
	LLC Gazprom dobycha Urengoy	-	145,623	176	7	145,806
	Gazpromneft-Khantos	-	118,692	223	169	119,084
	LLC Gazprom dobycha Nadym	4	69,529	56	30	69,619
	JSC Gazpromneft-Noyabrskneftegaz1	15	67,372	281	601	68,269
	LLC Gazprom dobycha Astrakhan	-	39,233	8	1	39,242
	LLC Gazprom dobycha Noyabrsk	3	33,792	258	6	34,059
	LLC Gazpromneft-Yamal 1	2	32,302	52	955	33,311
	OJSC Severneftegazprom	4	32,757	70	25	32,856
	LLC Zapolyarneft1	-	31,748	88	6	31,842
	LLC Gazpromneft-Orenburg1	10	20,882	401	-	21,293
	LLC Gazprom dobycha Orenburg	-	16,395	38	389	16,822
	OJSC Vostokgazprom	-	13,576	73	-	13,649
	CJSC Purgaz	-	12,799	10	-	12,809
	LLC Gazpromneft-Vostok1	-	9,905	87	23	10,015
	LLC Gazprom neft shelf1	-	9,225	15	-	9,240
	LLC Gazprom dobycha Krasnodar	1,181	3,394	54	-	4,629
	JSC Yuzhuralneftegaz1	-	1,167	9	1	1,177
	LLC Gazprom transgaz Ukhta	-	301	79	-	380
	LLC Noyabrskoe 1	-	142	-	-	142
	LLC Gazprom geologorazvedka	-	1	68	3	72
	LLC Meretoyakhaneftegaz1	-	26	11	-	37
	LLC Gazprom transgaz Yugorsk	-	33	-	-	33
	LLC Gazpromneft-Angara 1	-	24	5	-	29
	LLC Gazpromneft-Zapolyarye1	-	20	3	-	23
	LLC Gazpromneft-Sakhalin 1	-	4	13	-	17
	OJSC Kamchatgazprom	-	1	-	-	1
	Republic of Iraq	-	261	1,769	-	2,030
	Gazprom neft Middle East B.V.1	-	261	1,769	-	2,030
	Republic of Serbia	-	1,493	192	-	1,685
	Naftna Industrija Srbije a.d.1	-	1,487	192	-	1,679
	NAFTAGAS-Naftni servisi d.o.o. Novi Sad 1	-	6	-	-	6
	Republic of Angola	-	1,389	-	-	1,389
	Naftna Industrija Srbije a.d.1	-	1,389	-	-	1,389
	People's Democratic Republic of Algeria	-	330	3	-	333
	Gazprom EP International B.V.	-	330	3	-	333
	Plurinational State of Bolivia	-	93	-	-	93
	GP Exploracion  y Produccion, S.L.	-	93	-	-	93
	Romania	-	4	-	-	4
	NIS PETROL doo Banya Luka1	-	4	-	-	4
	Kyrgyz Republic	-	-	1	-	1
	PJSC Gazprom	-	-	1	-	1
	Total payments	1,236	1,023,900	4,375	2,238	1,031,749

3          PAYMENTS TO GOVERNMENTS (continued)

The table below sets forth information on payments, summarized by countries and governments (budgets):

	Production entitlements	Taxes on income, production or profit	License fees, rental fees, entry fees and other considerations for obtaining and using licenses or concessions	Payments for infrastructure improvements	Total
Russian Federation	1,236	1,020,330	2,410	2,238	1,026,214
federal budget	35	846,115	434	2	846,586
regional budgets	1,201	173,680	1,681	30	176,592
local budgets	-	535	295	2,206	3,036
Republic of Iraq	-	261	1,769	-	2,030
Ministry of natural resources of КАR	-	261	1,769	-	2,030
Republic of Serbia	-	1,493	192	-	1,685
budget of Serbian Republic	-	732	71	-	803
regional budgets	-	90	121	-	211
local budgets	-	671	-	-	671
Republic of Angola	-	1,389	-	-	1,389
budget of Angolan Republic	-	1,389	-	-	1,389
People's Democratic Republic of Algeria	-	330	3	-	333
Major taxpayer department of the Ministry of Finance	-	330	3	-	333
Plurinational State of Bolivia	-	93	-	-	93
National Tax Service	-	93	-	-	93
Romania	-	4	-	-	4
local budgets	-	4	-	-	4
Kyrgyz Republic	-	-	1	-	1
local budgets	-	-	1	-	1
Total payments	1,236	1,023,900	4,375	2,238	1,031,749

PJSC Gazprom has its registered office at:

PJSC Gazprom

16, Nametkina Street

V-420, GSP-7,

117997, Moscow, Russia

Telephone: +7 (812) 609-41-29

Facsimile:  +7 (812) 609-43-34

www.gazprom.ru (in Russian)

www.gazprom.com (in English)

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