Board of Directors addresses preliminary operationg highlights over 2005 and endorses budget, investment program and cost optimization (reduction) program for 2006
Message to the Media
A Gazprom Board of Directors’ meeting has been held in absentia.
The Board heard a report on Gazprom’s preliminary operating highlights over 2005.
The Board endorsed Gazprom’s investment program, budget (financial plan) and cost optimization (reduction) program for 2006.
Under the endorsed budget for 2006, overall income & revenues (together with the funds as of the year-start), liabilities, expenses & investments and financial borrowings will account for RUR 1,889.3 bln, RUR 1,980.2 bln, and RUR 90 bln, respectively, with the budgetary surplus projected at RUR 0.153 bln.
The endorsed cost optimization (reduction) program for 2006 prescribes RUR 11 bln to be saved.
In accordance with the approved investment program for 2006, total investments stand at RUR 310.1 bln including RUR 278.42 bln and RUR 31.68 bln as capital and long-term financial investments, respectively.
With the Gazprom 2006 budget and investment program built with so far no data on Sibneft, the 2006 draft budget earmarks finance to settle the Sibneft deal by timely fulfilling obligations before a syndicate of banks.
Background
On December 28, 2005, the Board of Directors endorsed a new edition of Gazprom’s budget (financial plan) for 2005. Given the year-end re-endorsement, the newly edited budget and scenarios are expected to be executed at 100 per cent.
In accordance with the preliminary highlights over 2005, Gazprom provided all its customers with 547.9 bcm of gas, of which exported 198.5 bcm including 147 bcm beyond the former Soviet Union.
Gazprom’s net profit over 2005 hit a record high RUR 177.9 bln.
When drafting its investment program for 2006, Gazprom has taken into account the following key development targets:
- 548 bcm of gas production;
- 195.6 bcm of gas exports including 151 bcm beyond FSU;
- providing the reliability and technological safety of the core businesses;
- maintaining the required level of gas reserves;
- meeting social priorities.
The top business priorities of Gazprom are as follows:
- building up gas, condensate and oil reserves as scheduled;
- commissioning prominent facilities incorporated in the capital construction projections for 2006;
- initiating construction of key facilities to be brought into operation in 2007;
- debottlenecking the United Gas Transmission System;
- upgrading core gas extraction assets;
- performing design and survey works for prospective investment projects.
The Gazprom 2006 investment program encompasses the most crucial investment projects including those aimed at:
- extracting gas (developing the Bovanenkovskoye, Kharasaveyskoye, Yety-Purovskoye, Vyngayakhinskoye, Yen-Yakhinskoye, Urengoyskoye, Zapolyarnoye, Yamburgskoye and other fields);
- constructing and upgrading gas transmission capacities including the North European, Northern Tyumen Region – Torzhok and Yamal – Europe gas pipelines, expanding the Urengoy gas transmission hub, etc.;
- creating underground gas storage capacities;
- creating gas processing capacities.
In 2006 Gazprom is resolute to bring on stream 1,231.65 km of gas mains and branches, six compressor stations at gas pipelines and underground gas storage depots and a gas treatment unit as well as to hook up 178 wells on gas fields and 11 wells at UGS depots.
Making up some 60 per cent of the total, capital investments are mainly intended for gas transmission projects.
Information Directorate, OAO Gazprom