Thursday, February 26, 2009
Gazprom cuts investments
02-26-2009 - BarentsObserver - Russian gas major Gazprom is adopting its investment plans on the assumption of further drop in oil and gas prices. Investments in 2009 might be reduced with 4,4 billion EUR. Gazprom plans to readjust the company’s budget and investment plans for 2009. A possible solution is to continue projects that are profitable at an oil price of 25 USD per barrel. This is the first time any Russian oil company has dropped below 32 USD per barrel in their most pessimistic prognoses. The Russian government is for the time being calculating with an oil price of 41 USD per barrel. Gazprom’s Board of Directors on Tuesday discussed costs adjustments in the investment program for 2009. A source familiar with the board’s decisions tells newspaper Kommersant that the Gazprom plans to continue its main investment projects, but cut investments with 200 billion RUB (app 4,4 billion EUR). The investment program was approved in December 2008 and calculated with an oil price of 50 USD per barrel. Experts believe that the budget and investment program might be reconsidered more times. The investor’s main concern will be that Gazprom continues its main projects – The Nord Stream pipe line from Russia to Germany and development of the Yamal and Shtokman fields in the Arctic. - The financial crisis deprives Yamal and Shtokman of a guarantee for demand on new gas, an analyst says. There is enhanced anticipation that Shtokman might be seriously postponed, or that Gazprom will start exploitation, but at far lower tempo than planned, he says. According to Kommersant, Gazprom ensures that all key projects are going according to plan and that their schedules are not to be altered.