Friday, December 19, 2008
How to help out Gazprom?
2008-12-17 - Barents Observer - The Russian government is preparing several measures on how to support energy giant Gazprom in the current situation of looming crisis. A stock emission is one of the alternatives. In return the state demands that the company reduces its investment programme. As reported by BarentsObserver, the financial situation in Gazprom is increasingly troublesome as gas prices and revenues drop sharply. The company could get as much as a 20 billion USD reduction in revenues from sales to Europe in 2009. Meanwhile, the company is negotiating with the government over how to secure federal support. According to Vedomosti, several company proposals have been delivered to government. A government official confirms to the newspaper that among the proposed measures is the issuing of infrastructure obligations and the localization of alternative project financing. Also on the table is a stock emission, government sources say. A revision of the 2009 budget, the investment programme and other crisis measures are to be assessed in the upcoming board meeting due 23 December. The government will however demand that Gazprom reduces its 2009 investment programme, Vedomosti reports. According to Minister of Economic Development Elvira Nabiullina, the economic downturn in the country is resulting in lower prices on materials and services, and thus also lower project development costs. The recently adopted 2009 investment programme of the company envisages 920 billion RUB of investments. A major part of that will be spent on the development of the Bovanenkovo field in the Yamal Peninsula. Among additional major company expenses in 2009 is the 20 percent buy-out of ENI from the Gazprom Neft company, as well as 100 billion RUB to subsidiary companies’ investment programmes.