"The adjustment of the 2010 investment program was stipulated by a need to increase investments in key projects, in particular in the sphere of gas transportation and establishing new gas [production] centers in Russia's Far East," the company said in a statement.
The increase in the investment program indicates that Gazprom had recovered from the economic crisis despite that fact that gas demand is expected to return to pre-crisis level no sooner than in 2012, analysts with Finam investment company said in a note.
"We view the increase in the investment program as a positive signal. It shows the company's recovery from the crisis and can help to renew earlier frozen projects," they said.
They added that Gazprom's debt-to-capital ratio has reduced to 17% in 2010, a bit below an industry average, while the figure was as high as 29% last year.
Gazprom said it has increased investments in the development of the Kirinsky gas field offshore Sakhalin Island in Russia's Far East and Zapolyarnoye gas field as well as in the projects to compensate for a decline in gas production at existing fields.
According to the draft of the revised investment program for 2010, capital expenditure is set at Rb751.84 billion, up 13.3% from the previously planned Rb663.56 billion, including capital construction spending at Rb740.5 billion, Gazprom said.
Long-term financial investments are now set at Rb153.39 billion, up 10.5%, mainly on the construction of the North Stream gas pipeline across the Baltic Sea to northern Europe, the South Stream gas pipeline across the Black Sea to southern Europe as well as work in Libya and Algeria.
Drafts of the updated investment program as well as the budget for 2010 have been submitted to Gazprom's board of directors for final approval.
2010 BUDGET REVISED DOWN
The company's amended budget for 2010 envisages a cut in total expenditure to Rb3.64 trillion, down 4% from the previous Rb3.79 trillion, Gazprom said.
Liabilities, expenses and investments will amount to Rb3.78 trillion, a cut of Rb95.6 billion.
Borrowings are remain unchanged at Rb90 billion.
"The adjustment of the budget was stipulated by changes in volumes and prices of gas sales as well as macro-economic parameters," the company said without elaborating.
In the upstream, development of the Bovanenkovo gas field on the northern Yamal Peninsula and Shtokman in the Barents Sea remain a priority for the company, Gazprom said.
Gazprom aims to launch gas production from Bovanenkovo, which is the biggest gas field in Yamal with reserves estimated at 4.9 trillion cubic meters, in late 2012.
Production at Shtokman was postponed earlier this year to 2016 from the initially planned 2013 for natural gas production and to 2017 from 2014 for LNG production.
Among other priority projects are plans "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," Gazprom said.
In East Siberia, funds are allocated for pre-development of the Kshukskoye and Nizhne-Kvakchikskoye fields, among other projects.
China Chemical Weekly: http://news.chemnet.com/en/detail-1411716.html
