Board of Directors reviews efficiency of Gazprom major financial investments in oil business for 2008
Gazprom Headquarters keeps hosting the Board of Directors’ meeting.
The Board of Directors considered the information relevant to the efficiency of Gazprom major financial investments in the oil business based on the 2008 operational results.
The Management Committee was entrusted with increasing in 2009 the efficiency of Gazprom major financial investments in the oil business with due regard of the negative consequences provoked by the global financial crisis.
“Based on the 2008 operational results Gazprom Neft has once again demonstrated high performance rates and retained the leading position among all Russian oil companies in terms of operational efficiency. In general, upon transition under Gazprom management, Sibneft economic performance and operational efficiency are growing steadily,” pointed out Alexey Miller during the meeting.
Gazprom Neft is the main investment target of Gazprom in the oil business. Oil and its by-product prices are the key factor determining Gazprom Neft financial performance. The prices, in their turn, depend on the global market environment and the product supply and demand balance.
Over the first half of 2008 the global gas prices were increasing. In August, however, the prices hit a record high (for example, Brent – USD 140 per bbl) and started to decline sharply. The decline in global oil prices exceeded 70 per cent by late 2008 (Brent – down to USD 66 per bbl). The price collapse driven by the global financial crisis aggravation, export rates lag as well as changes in currency rates had a negative impact on Gazprom Neft performance in the fourth quarter of 2008.
At the same time, according to the 2008 consolidated financial information of Gazprom Neft under US GAAP, the company ’ s revenue accounted for USD 33.075 bln, a 52 per cent up versus 2007.
Compared to the 2007 results, the company’s net profit increased 12 per cent up to USD 4.658 bln, with EBITDA – up 28 per cent to USD 7.965 bln.
In 2009 Gazprom Neft plans to step up a number of actions aimed at achieving positive finance and economic results in the world crisis environment. These actions include:
- procurement cost reduction
- investment portfolio optimization including waiver of inefficient geological and engineering operations
- optimization of electricity energy supply to the Omsk refinery.