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23 Dec 2008 10:44
RELEASE
23.12.2008
Moscow
Board of Directors Approves Investment Program, Budget and Cost Optimization (Reduction) Program for 2009
The Board of Directors' meeting has adjourned at the Company's Headquarters.
The Board of Directors took notice of the information on preliminary operating highlights of the Company in 2008, endorsed the draft Investment Program, Budget (Financial Plan) and Cost Optimization (Reduction) Program of Gazprom for 2009.
According to the approved Investment Program for 2009, the total amount of investments will make up RUB 920.44 bln, the amount of capital investments - RUB 699.88 bln, long-term financial investments - RUB 220.56 bln.
The approved Budget for 2009 provides for the total amount of cash income and revenues at RUB 3.72 trln; liabilities, expenditures and investments at RUB 3.8 trln, financial borrowings at RUB 90 bln. The budget surplus will account for RUB 0.5 bln.
The Cost Optimization (Reduction) Program for 2009 provides for the measures aimed at cost optimization (reduction) to result in a cumulative effect of RUB 11.3 bln.
Background:
When developing the Investment Program for 2009, the following documents were selected as the key sources: the List of Prioritized Projects elaborated within the Gazprom Development Program for a ten-year period and the approved comprehensive target programs for the development of Gazprom. The Company has also taken into account the assignments of the federal authorities relevant to the deadlines for the projects having strategic importance to the Russian Federation including the Eastern Siberian and the Far Eastern projects (provision of gas supply to the Kamchatka Peninsula in 2010 and to Vladivostok - in 2011 and further gasification of the Irkutsk Oblast during 2010-2011 involving gas deliveries from the Chikanskoye gas and condensate field, as well as arranging for the coalbed methane extraction from the Kuzbass coal mines).
Pursuant to the Investment Program for 2009, 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 and gas condensate field, the Kharvutinskaya area of the Yamburg gas and condensate field, the En-Yakhinskoye, Zapolyarnoye, Chayandinskoye and other fields.
The gas transportation priorities are: construction of the Bovanenkovo - Ukhta, Ukhta - Torzhok trunkline systems, the Gryazovets - Vyborg, Pochinki - Gryazovets, Murmansk - Volkhov gas pipelines, and the SRTO - Torzhok gas trunkline. A provision is made to allocate funds for the construction of the new Obskaya - Bovanenkovo railroad.
The document also provides for the allocation of funds to gasify the Eastern Russia: construction of the Sakhalin - Khabarovsk - Vladivostok and Zhigalovo - Irkutsk gas pipelines, GTU-2 Nizhnekvakchinskoye gas and condensate field - automated gas distribution station of Petropavlovsk-Kamchatsky gas trunkline.
Capital investments will also be channeled for upgrading the major gas production and transportation facilities, technically re-equipping underground gas storage sites, performing design & engineering and geological exploration, carrying out production drilling in fields. In addition, it is assumed that funds will be allocated for the acquisition of the rights to use the subsurface mineral resources in line with the Russian Federation Government decision to provide Gazprom with the licenses for the development of a number of fields on a sole source basis.
The Long-Term Financial Investment Plan for 2009 contemplates the participation of Gazprom in the development and operation of the Shtokman and Prirazlomnoye fields, the construction of the Nord Stream gas pipeline sections beyond Russia, as well as in the Sakhalin II project. In addition, funds have been allocated to increase the authorized capital of the Gazoenergeticheskaya Kompaniya in order to implement the projects of Gazprom in the power generation industry. The financing of projects implemented abroad (the Republic of Vietnam, the Bay of Bengal in India, Turkmenistan) has been taken into consideration. The Company also plans to allocate in 2009 the funds for the acquisition of a 51 per cent stake in SeverEnergiya's authorized capital.
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