Gazprom Management Committee approves adjusted draft Investment Program and Budget for 2010
The Management Committee approved the adjusted draft Gazprom Investment Program and Budget (Financial Plan) for 2010.
These draft documents as well as a draft Cost Optimization (Reduction) Program for 2010 will be submitted to the Company’s Board of Directors for consideration.
Pursuant to the adjusted draft Investment Program for 2010, the total amount of investments will make up RUB 905.23 billion, which is RUB 102.83 billion up as compared to the Investment Program approved in November 2009.
At the same time, the revised amount of capital investments will account for RUB 751.84 billion (a RUB 88.28 billion increase versus the Investment Program endorsed in November 2009), of which RUB 740.5 billion and RUB 11.34 billion will be allocated for capital construction and acquisition of non-current assets accordingly.
The revised amount of long-term financial investments will total RUB 153.39 billion (RUB 14.55 billion up on the Investment Program approved in November 2009).
The adjusted draft Budget for 2010 envisages a RUB 148.9 billion reduction in total income down to RUB 3.64 trillion, while liabilities, expenditures and investments will be decreased by RUB 95.6 billion down to RUB 3.78 trillion. Financial borrowings will remain unchanged at RUB 90 billion. The budget surplus will make up RUB 0.5 billion.
The 2010 Investment Program adjustment is mainly driven by the need to increase investments in the key projects aimed, inter alia, at constructing gas transmission infrastructure or establishing new gas centers in Eastern Russia.
The Budget adjustment stems from volumetric and price changes in gas marketing as well as macroeconomic indicators.
The adjusted draft Gazprom Investment Program for 2010 stipulates larger capital investments in pre-development of the Kirinskoye gas and condensate field, gas and condensate deposits of the Zapolyarnoye field as well as in construction operations aimed at offsetting declined gas production from existing fields.
The draft Investment Program envisages an investment increase for prioritized gas transmission projects such as the Gryazovets – Vyborg and the Pochinki – Gryazovets gas pipelines and the Ukhta – Torzhok gas trunkline system construction. Investments have been raised to reconstruct major gas transmission capacities, retrofit underground gas storage facilities as well as to construct and upgrade gas processing capacities.
The draft 2010 Investment Program provides for increasing long-term financial investments in the Nord Stream gas pipeline construction, the South Stream project execution and Gazprom’s operations in Libya and Algeria.
Pursuant to the draft Investment Program, the following gas production projects will continue to be a priority in 2010: pre-development of the Bovanenkovskoye and Shtokman fields, the Apt-Albian deposits of the Nyda area of the Medvezhye gas and condensate field, the Zapadno-Pestsovaya area of the Urengoyskoye oil and gas condensate field, the Yamburgskoye gas and condensate field, the Kharvutinskaya area inclusive, as well as the Zapolyarnoye, Urengoyskoye and other fields.
The gas transmission priorities will still include construction of the Bovanenkovo – Ukhta gas trunkline system, the Gryazovets – Vyborg, the Pochinki – Gryazovets, the Zapolyarnoye – Urengoy and the Dzhubga – Lazarevskoye – Sochi gas pipelines.
As part of the Eastern Gas Program, the draft Investment Program will still be focused on the Sakhalin – Khabarovsk – Vladivostok, the Sobolevo – Petropavlovsk – Kamchatsky gas trunklines construction as well as on the Kshukskoye and Nizhne-Kvakchikskoye fields pre-development.
The long-term financial investments for 2010 will be primarily made in Gazprom’s participation in the development and operation of the Shtokman and Prirazlomnoye fields as well as construction of the Nord Stream and the South Stream gas pipelines.