Board of Directors approves Company’s investment policy
The Gazprom Board of Directors approved the Company's current investment policy.
The Board of Directors noted that Gazprom was among the world's largest players in the energy market and the absolute leader among Russian oil and gas companies in terms of investments. In 2012 Gazprom Group's capital investments reached RUB 1.221 trillion according to the International Financial Reporting Standards, while a number of leading domestic oil and gas companies had at most RUB 0.5 trillion.
Significant investments are explained by the specifics of Gazprom's activities as compared to other Russian oil and gas companies.
Gazprom is responsible for securing gas supplies to Russian consumers and meeting international gas supply obligations. For this purpose the Company ensures reliable operation and full-scale development of its production and gas transmission capacities, including the Unified Gas Supply System of Russia – the world's largest gas transmission system.
Gas is extracted under the conditions of declining production from the basic fields. The Company annually increases capital investments in order to maintain the current level of production.
Consistent efforts are made to develop the producing fields. In January 2013 the Company brought the Zapolyarnoye field to its nominal capacity of 130 billion cubic meters of gas per year, thus making it the most productive field in Russia.
In order to harmonize production growth with projected gas demand, Gazprom allocates considerable funds into exploration and development of new fields. These activities shift progressively towards Russia's hard-to-access regions that are remote from the main production areas and devoid of the necessary infrastructure. Gazprom has built a greenfield production facility at the Bovanenkovskoye field in Yamal. At present, the Company is engaged in production from the Kshukskoye and Nizhne-Kvakchikskoye fields in Kamchatka and is about to commission the Kirinskoye field in the Sea of Okhotsk offshore Sakhalin in 2013.
Gazprom invests substantial funds into gas transmission and storage projects, with over 50 per cent of the Company's overall capital investments annually channeled for these purposes. Gazprom lays gas transmission routes from new production regions, reconstructs operating gas pipelines, improves their technical reliability and increases the capacity of underground gas storage facilities. In 2012 Gazprom's major gas transmission projects were as follows: Bovanenkovo – Ukhta, Ukhta – Torzhok, Gryazovets – Vyborg and Southern Corridor. Such large-scale activities make it possible to ensure reliable gas transmission to consumers in Russia and abroad.
The implementation of complex projects in regions with unique natural and climatic conditions requires cutting-edge technologies. Only in 2012 Gazprom allocated about RUB 8 billion – more than any other Russian company – for research and development. Innovative technologies funded by Gazprom enable the Company to considerably reduce operational costs and mitigate adverse environmental impacts.
In addition, Gazprom invests considerable funds into the upgrading and reconstruction of existing gas and oil processing facilities, gasification of the Russian regions and construction of socially–oriented facilities. For instance, the Company is the investor of the key sports and infrastructure facility construction in Sochi as part of the preparations for the 2014 Winter Olympic Games.
Gazprom's investment activities have significant influence on the national industry. The Company is one of Russia's largest consumers of domestically produced goods – from basic metallurgical products to high-tech equipment. For instance, new transmission routes contribute to the development of the pipe sector, as 95 per cent of pipe products purchased by the Company are manufactured by Russian companies.
Gazprom's Investment Program covers the activities of hundreds of companies, including those operating in related sectors, and this permits to create new jobs. Besides, for many years Gazprom has increased tax payments to the budgets of all levels. According to the 2012 results, Gazprom became Russia's largest taxpayer with over RUB 1.9 trillion of payments.
In the coming decade the Company will face a wide range of crucial challenges. Those will be related to the development of new fields in Yamal, Russia's eastern regions and northern seas, upgrading and expansion of the Unified Gas Supply System, its development in Eastern Russia, construction of new routes for mineral resource transportation, diversification of sales markets and commercial products as well as build-up of advanced gas processing.
The Management Committee was tasked to continue large-scale investment projects with the Company's participation.