24 Nov 2009 10:28
RELEASE
24.11.2009
Moscow
Board of Directors accepted 2010 Investment Program, Budget and Cost Optimization (Reduction) Program and considered outlook for 2011-2012 key financial documents
The Board of Directors took notice of the information on the Company's preliminary operating results in 2009. It was noted that the implementation of the Gazprom Investment Program, Budget and Cost Optimization (Reduction) Program in 2009 was expected to match the level of the approved parameters.
The Board of Directors decided to accept the Gazprom Investment Program, Budget (Financial Plan) and Cost Optimization (Reduction) Program for 2010 and provide these documents to the Government for consideration.
According to the Investment Program, the total amount of investments in 2010 will make up RUB 802.4 billion, capital investments - RUB 663.56 billion, long-term financial investments - RUB 138.84 billion.
The Budget for 2010 provides for the total amount of cash income and revenues at RUB 3.79 trillion; liabilities, expenditures and investments - RUB 3.88 trillion. The amount of financial borrowings will total RUB 90 billion. The Budget surplus will account for RUB 0.5 billion.
The Cost Optimization (Reduction) Program for 2010 provides for the measures aimed at cost optimization (reduction) yielding a cumulative effect of RUB 11.7 billion.
The Gazprom Board of Directors reviewed the projection of the Gazprom Investment Program, Budget (Financial Plan) and Cost Optimization (Reduction) Program for 2011 - 2012.
Viktor Zubkov, Chairman of the Board of Directors, noted that "undoubtedly, Gazprom will execute its investment programs for the years 2010, 2011 and 2012 and this will secure reliable implementation of the company's obligations before customers in both local and international markets."
Background:
The 2010 Investment Program was shaped in compliance with the deadlines set for executing the top-priority investment projects of principle importance for development of Gazprom and the Russian Federation in general. The impact of the projects on the Domestic Gas Quotas and on reliable operation of the Unified Gas Supply System was taken into consideration.
Pursuant to the 2010 Investment Program, the prioritized production targets include pre-development of the Bovanenkovo and Shtokman fields. Work will be done to pre-develop 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 including the Kharvutinskaya area, as well as the Zapolyarnoye, Urengoy and other fields.
The gas transportation priorities are: construction of the Bovanenkovo - Ukhta gas trunkline system and the Gryazovets - Vyborg, Pochinki - Gryazovets, Zapolyarnoye - Urengoy, Dzhubga - Lazarevskoye - Sochi gas pipelines. A provision is made to allocate funds for the construction of a new Obskaya - Bovanenkovo railroad.
As part of the Investment Program funds are allocated for the Eastern Gas Program execution: in particular, construction of the Sakhalin - Khabarovsk - Vladivostok, CGTU-2 of Nizhne-Kvakchikskoye gas and condensate field - AGDS of Petropavlovsk-Kamchatsky gas trunklines, as well as pre-development of the Kshukskoye and Nizhne-Kvakchikskoye fields.
Investments will also be routed for upgrading the major gas production and transportation facilities, technically re-equipping underground gas storages, constructing and upgrading gas processing facilities, as well as performing design and engineering, geological exploration, production drilling operations in fields.
The 2010 Long-Term Financial Investments Plan provides, inter alia, for the Company's participation in the Shtokman and Prirazlomnoye fields development and operation, as well as the Nord Stream and South Stream gas pipelines construction. Gazprom's projects in power generation are also provided with funds.
Funding of the projects in the Republic of Vietnam, India's Bay of Bengal, and the Caspian Sea shelf was taken into consideration. In addition, the Company is planning to allocate funds for acquiring a 12.5 per cent stake in Beltransgaz and for settling the accounts related to a 51 per cent stake acquisition in SeverEnergia.
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