Board of Directors approves Investment Program, Budget and Cost Reduction Program for 2011
The Gazprom Board of Directors took notice of the information on the Company’s preliminary 2010 operating results, projected Investment Program, Budget (Financial Plan) and Cost Optimization (Reduction) Program for 2012–2013.
The Board of Directors approved Gazprom’s Investment Program, Budget (Financial Plan) and Cost Optimization (Reduction) Program for 2011.
Pursuant to the approved Investment Program for 2011, the total amount of investments will make up RUB 816.363 billion. At the same time, the amount of capital investments will account for RUB 729.865 billion, of which RUB 727.276 billion and RUB 2.589 billion will be allocated for capital construction and acquisition of non-current assets accordingly. The amount of long-term financial investments will total RUB 86.498 billion.
According to the approved Budget for 2011, revenues and gains will total RUB 3.89 trillion while liabilities, expenditures and investments – RUB 3.98 trillion. Financial borrowings are determined at RUB 90 billion. The budget surplus will make up RUB 0.5 billion.
The Cost Optimization (Reduction) Program for 2011 envisages measures aimed at cost optimization (reduction) to result in a cumulative effect of RUB 14 billion.
The 2011 Investment Program was compiled with due regard to the preset deadlines for the prioritized investment projects having fundamental significance for the development of Gazprom and the Russian Federation in general.
Pursuant to the 2011 Investment Program, priority in capital construction costs allocation will be given to the following gas production projects: pre-development of the Bovanenkovo field, the Apt-Albian deposits of the Nyda area in the Medvezhye gas and condensate field, the Achimov deposits in the Urengoy oil, gas and condensate field, and other fields.
The gas transmission priorities will include construction of the Bovanenkovo – Ukhta and the Ukhta – Torzhok gas trunkline systems, the Gryazovets – Vyborg, the Pochinki – Gryazovets and the Northern Tyumen Regions (SRTO) – Torzhok gas pipelines.
Funds will be allocated to implement projects in Russia’s East, in particular, to construct the Sakhalin – Khabarovsk – Vladivostok GTS, the gas pipeline conveying gas from the Kirinskoye field to the main compressor station of the Sakhalin – Khabarovsk – Vladivostok GTS as well as to pre-develop the Kshukskoye, Nizhne-Kvakchikskoye and Kirinskoye fields.
Pursuant to the document, funds will also be channeled for upgrading the major gas production and transmission assets, technically re-equipping underground gas storage facilities, constructing and retrofitting gas processing capacities as well as performing prospecting, geological exploration and production drilling in fields.
Funds are earmarked for implementing the Company’s projects within the Russian Government-approved Program for the Construction of Olympic Venues and the Development of Sochi as a Mountain Climate Resort.
The long-term financial investment plan for 2011 contemplates, inter alia, Gazprom’s participation in the Shtokman and Prirazlomnoye fields development as well as the Nord Stream and South Stream gas pipelines construction. In addition, the Company intends to allocate funds for power generation projects, including the Adler TPP construction.
Finance is also earmarked for projects in the Republic of Vietnam, Africa and Latin America.