Board of Directors approves Investment Program, Budget and Cost Reduction Program for 2010
The Board of Directors approved the Gazprom Investment Program, Budget (Financial Plan) and Cost Optimization (Reduction) Program for 2010.
Pursuant to the approved Investment Program for 2010, the total amount of investments will significantly increase making up RUB 905.23 billion which is RUB 102.83 billion more as compared to the Investment Program approved in November 2009.
At the same time, the approved amount of capital investments will account for RUB 751.48 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 approved 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 approved Budget for 2010 will make up RUB 3.64 trillion while liabilities, expenditures and investments will make up RUB 3.78 trillion. Financial borrowings will remain unchanged at RUB 90 billion. The budget surplus will make up RUB 0.5 billion.
The Optimization Program will amount to RUB 11.7 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 and establishing new gas centers in Eastern Russia.
The Budget adjustment stems from volumetric and price changes in gas marketing, macroeconomic indicators and cost optimization measures.
The approved 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 document 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 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 endorsed Investment Program, the following gas production projects will continue to be a priority in 2010: pre-development of the Bovanenkovo and Shtokman fields, the Apt-Albian deposits of the Nyda area of the Medvezhye gas and condensate field, the Zapadno-Pestsovaya area of the Urengoy oil, gas and condensate field, the Yamburg gas and condensate field, the Kharvutinskaya area inclusive, as well as the Zapolyarnoye, the Urengoy 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 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 plan for 2010 will be primarily focused on Gazprom’s participation in the development and operation of the Shtokman and Prirazlomnoye fields, as well as in construction of the Nord Stream and the South Stream gas pipelines.