Gazprom Dividends May Be Hurt by Ukraine Debt, CEO Says

OAO Gazprom’s investment and dividend plans may suffer because of Ukraine’s failure to pay for natural gas supplies, the Russian export monopoly said.

“Yes, Ukraine is in a deep political crisis, but they need to pay for gas,” Chief Executive Officer Alexey Miller said in an e-mailed statement after a meeting with German Vice Chancellor Sigmar Gabriel. “This situation can’t go on forever.”

Gazprom says debts for gas deliveries have grown to more than $1.8 billion as Ukraine seeks financial aid from the U.S. and Europe. Shipments to Europe, which gets about 30 percent of its gas from Russia, have been disrupted twice since 2006 when disputes between the two countries led Gazprom to cut sales to Ukraine.

Russia’s biggest gas producer estimated that it would pay 6 to 8 rubles a share in dividends on 2013 income, according to a March 3 company presentation. That compares with 5.99 rubles for 2012 earnings.

“We should be looking at the lower end of the range,” Alexei Kokin, an oil and gas analyst at UralSib Financial Corp., said by telephone from Moscow today.

The unpaid debt from Ukraine may be deemed by Gazprom as excessive receivables and be a reason to reduce dividends by as much as 2 rubles a share, he said. That calculation is based on Gazprom considering $1 billion or $1.5 billion in receivables as more than ordinary from Ukraine, he said.

The Gazprom boss said the company has refrained from exercising its right to seek pre-payment for gas deliveries, as it wants to avoid pushing Ukraine toward an economic collapse that may imperil European supplies, according to the statement. About half Russia’s exports to Europe pass through Ukraine.

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