Russ Oil-Gas

2009-02-03 - Barents Observer - Russian energy major Gazprom in January produced 44,54 billion cubic meters of gas, which is down 13,7 percent year-on-year. Analysts believe the company in 2009 will experience a major reduction both in production and profits. The January production of 44,54 billion cubic meters is down 6,1 percent from December 2008 and down 13,7 percent compared with figures from January 2008. The reason for the major drop is lower demands, the warm winter and the gas transit conflict with the Ukraine, newspaper Vedomosti reports. Meanwhile, analysts from Goldman Sachs say to the newspaper that production in all of 2009 might drop to 517 billion cubic meters, which is a six percent decrease from 2008 results. Similarly, turnover might in 2009 drop four percent and net profits as much as 35 percent compared with 2008, the analysts say. The failing results come amid the company’s ambitious plans to boost production. According to company documents, production is to be boosted towards 560 billion cubic meters in 2010 and then further towards 590 billion cubic meters in 2020. The economic downturn both in domestic Russia and in the EU market now seriously challenges the gas giant. Some estimates say that demands in the Russian regions this year might drop up to 20 percent. Gazprom itself believes gas consumption in the country will drop between 4-10 percent. According to Vedomosti, electricity consumption in Russia will in 2009 decline about eight percent.