Payments to government

PJSC GAZPROM

CONSOLIDATED REPORT ON PAYMENTS TO GOVERNMENTS

FOR THE YEAR 2016

1 GENERAL INFORMATION

This consolidated Report on payments to governments (the "Report") has beenprepared under the requirements of the UK Financial Conduct Authority's Disclosure Rules andTransparency Rules 4.3А.

The Report contains information on payments made to governmental bodies in 2016 by PJSC Gazprom and its subsidiary undertakings (the "Gazprom Group") engaged in exploration, prospection and extraction of mineral resources ("extractive activities"). The Report excludes payments made by the Group entities not engaged in extractive activities.

2 BASIS FOR PREPARATION

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

Associated entities, joint ventures and joint arrangements accounted for using the equity methodare excluded from this Report.

The Russian Ruble is the presentation currency of this Report and the Consolidated FinancialStatements of the Gazprom Group prepared in accordance with the International Financial Reporting Standards ("IFRS"). All amounts disclosed in this Report are presented in millions of Russian Rubles.

Payments made in foreign currencies have been translated into Russian Rubles at the averageannual exchange rates of respective currencies set by the Central Bank of the RussianFederation.

For the purposes of this Report, the term "governments" mean any national, regional or local authority, ministry or agency authorized for collection of taxes, budgetary and other payments in accordance with applicable legislation effective as of the date of the occurrence of a paymentobligation. In the context of the Report governments also include legal entities authorizedfor collection of taxes, fees and other payments imposed by state authorities.

The Report includes all direct and indirect payments to governments.

For the purposes of this Report, payments include the following:

а) Production entitlements;

b) Taxes on income, production or profit of the organization (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 those that are social expenses innature).

2 BASIS FOR PREPARATION (continued)

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

h) Turnover taxes (value added tax, sales tax and other similar taxes) or taxes withholding byan entity acting as tax agent (personal income tax and other similar taxes);

i) Dividends paid to shareholders that are government bodies, on the same terms as to othershareholders;

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 2016.

The Report presents payments breakdowns by the following categories:

· Countries in which the Gazprom Group's organizations are engaged in extraction activities and projects for extraction 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 this Report, the term "project" means a legal entity engaged in extraction activities. 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 Russia, 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 this Report.

Note 31 "Net cash provided by operating activities" in the Consolidated Financial Statements ofthe Group for the year 2016, prepared in accordance with IFRS, discloses information ontaxes paid and other similar payments made in cash by all subsidiaries of the Gazprom Group (regardless of their types of business activities) in 2016.

3 PAYMENTS TO GOVERNMENTS

The table below sets forth information on payments to governments, summarized by countries and projects:

3 PAYMENTS TO GOVERNMENTS (continued)

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

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)