OAO Gazprom (OGZD) - Investment, Budget and Cost Reduction Program 2012
RNS Number : 8665P
30 October 2012
Board of Directors approves adjusted Investment Program, Budget and Cost
Reduction Program for 2012
The Gazprom Board of Directors approved the adjusted Investment Program,
Budget (Financial Plan), and Cost Optimization (Reduction) Program for 2012.
According to the adjusted Investment Program for 2012, the total amount of
investments will make up RUB 974.649 billion, which is a RUB 198 billion
increase if compared to the Investment Program approved in December 2011.
Meanwhile, the amount of capital investments will make up RUB 890.007 billion
(a RUB 180.403 billion increase if compared to the Investment Program approved
in December 2011), of which RUB 888.694 billion and RUB 1.313 billion will be
allocated for capital construction and acquisition of non-current assets, thus
showing an increase of RUB 179.13 billion and RUB 1.273 billion accordingly.
The amount of long-term financial investments will stand at RUB 84.642 billion
(RUB 17.599 billion up on the Investment Program approved in December 2011).
According to the adjusted Budget for 2012, revenues and gains will total RUB
4.972 trillion while liabilities, expenditures and investments - RUB 5.396
trillion. The external financial borrowings are determined at RUB 91.4
billion, showing a RUB 1.4 billion rise versus the amount of borrowings
approved in December 2011, which is explained by the USD appreciation against
RUB. The Budget surplus will account for RUB 0.2 billion.
The adjusted Cost Optimization (Reduction) Program for 2012 envisages measures
aimed at cost optimization (reduction) to result in a cumulative effect of RUB
The 2012 Investment Program adjustment is mainly driven by the need to
increase investments in the top-priority projects for natural gas production,
transmission and underground storage.
The Budget adjustment stems from volumetric and price changes in gas marketing
and macroeconomic indicators.
The adjusted Gazprom Investment Program for 2012 envisages increased
investments in pre-development of the traditional production areas, including
the Urengoyskoye and Astrakhanskoye fields.
The investments will be increased for the Bovanenkovo - Ukhta and Ukhta -
Torzhok gas trunkline systems construction as well as the Sakhalin -
Khabarovsk - Vladivostok gas transmission system and the gas pipeline
connecting the Kirinskoye field onshore processing facility (OPF) with the
Sakhalin main compressor station (MCS). Besides, additional funds will be
allocated for the Southern Corridor project implementation.
The Investment Program envisages increased investments inthe underground gas
storage system development.
As part of the Eastern Gas Program, the investments will be increased for
pre-development of the Kshukskoye, Nizhne-Kvakchikskoye and Kirinskoye gas and
The increase in the long-term financial investments is caused by, inter alia,
the necessity to allocate additional funds to power generation projects.
Pursuant to the adjusted Investment Program for 2012, the following production
projects will remain the top-priority investment recipients in capital
construction: pre-development of the Bovanenkovo, Zapolyarnoye, Medvezhye,
Urengoyskoye, Yamburgskoye and other fields.
The gas transmission priorities will include construction of the Bovanenkovo -
Ukhta and Ukhta - Torzhok gas trunkline, the Gryazovets - Vyborg, Pochinki -
Gryazovets and SRTO - Torzhok gas trunklines systems.
In Eastern Russia the Investment Program will still be focused on the Sakhalin
- Khabarovsk - Vladivostok gas transmission system, the Kirinskoye field OPF -
Sakhalin MCS gas trunkline and pre-development of the Kshukskoye,
Nizhne-Kvakchikskoye and Kirinskoye fields.
Funds are earmarked for retrofitting the major gas production and transmission
assets, re-equipping underground gas storage facilities, constructing and
retrofitting gas processing capacities, performing prospecting, geological
exploration and production drilling in fields.
The adjusted Investment Program for 2012 also envisages the investments for
Gazprom's projects implementation as part of the Russian Federation Government
approved Program for Construction of Olympic Venues and Development of Sochi
as a Mountain Climate Resort.
The adjusted long-term financial investment plan for 2012 prioritizes, inter
alia, Gazprom's participation in the Nord Stream and South Stream gas
pipelines construction as well as financing of the projects implementation in
Africa, Bolivia, Latin America, the UK, Vietnam and Uzbekistan.
This information is provided by RNS
The company news service from the London Stock Exchange
MSCUROORUOAROAA -0- Oct/30/2012 13:34 GMT
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