Gazprom prioritizes projects in economic downturn

Uchenna Izundu
OGJ International Editor

LONDON, Feb. 10 -- OAO Gazprom is prioritizing gas projects, determining which projects it will proceed with, because of decreasing gas demand and challenging financing issues amid the economic downturn.

Speaking through an interpreter, Chief Financial Officer Andrey Kruglov told reporters in London that the company had not yet confirmed its list. "We have also been prioritizing projects in our investment program…and this will allow us to see which projects will be financed and which projects are going ahead," he said. Its key Yamal Peninsula project is expected to go ahead.

Gazprom management came to London Feb. 10 to give a strategy and budget update to investors.

Kruglov said the company would wait until it determines this year's first quarter results before assessing how the global and Russian financial situation would impact its budget. "But we have started developing different scenarios which depend on oil price levels," he said.

Last December, the company approved a draft investment program of 920.44 billion rubles, another 699.88 billion rubles in capital investments, and 220.56 billion rubles for long-term financial investments. He said these investment figures remain unchanged.

The company will focus on improving efficiency and better handling of its liquidity. It intends to keep a tight reign on costs by cutting back on sponsorships, social activities, and personnel by 10%. It also has launched an advanced payment system to ensure that its customers don't fall behind on their bills. This applies to 1-year contracts and primarily Russian customers.

Priorities
Gazprom sait its major Shtokman gas condensate project in the Barents Sea is on track, however, and the shareholders, including Total SA and StatoilHydro, are to make a final investment decision in first-quarter 2010, said Alexander Medvedev, deputy chief executive of Gazprom.

The partners expect to run up high costs before they make the decision whether to execute it, which is unusual, Medvedev added, pointing out that this demonstrated how confident they were about it.

Shtokman is scheduled to export gas by pipeline in 2013 and the 7.5 million tonnes/year liquefaction plant would start in 2014.

Other major Gazprom projects include predevelopment work in Bovanenkovo and Prirazlomnoye fields; the Apt-Albian deposits in the Nyda area of Medvezhye gas and condensate field; the Zapadno-Pestsovaya area of Urengoy oil and gas condensate field; the Kharvutinskaya area of Yamburg gas and condensate field; and other fields.

Gas transportation priorities include construction of the Bovanenkovo-to-Ukhta and Ukhta-to-Torzhok trunkline systems; the Gryazovets-to-Vyborg, Pochinki-to-Gryazovets, and Murmansk-to-Volkhov gas pipelines; and the SRTO-to-Torzhok gas trunkline.

Gazprom's presence in London reignited rumors that it was interested in buying Centrica PLC. "We are not in talks with either the shareholders or the management of Centrica," Medvedev said.

Contact Uchenna Izundu at uchennai@pennwell.com.

Related Articles

PHMSA proposes pipeline accident notification regulations

07/02/2015 The US Pipeline and Hazardous Materials Safety Administration has proposed new federal oil and gas pipeline accident and notification regulations. ...

Quicksilver Canada gets LNG export approval

07/02/2015 Quicksilver Resources Canada Inc. has received approval from the National Energy Board of Canada to export 20 million tonnes/year of LNG from a pos...

FourPoint Energy to acquire Anadarko basin assets from Chesapeake

07/02/2015 FourPoint Energy LLC, a privately owned Denver company, plans to acquire oil and gas assets from Chesapeake Energy Corp. subsidiaries Chesapeake Ex...

Origin lets contract for Otway basin fields

07/02/2015 Origin Energy Ltd., Sydney, has let a $1.3 million (Aus.) contract to Wood Group Kenny for provision of a detailed engineering design for the onsho...

Puma Energy completes purchase of Murco’s UK refinery, terminals

07/02/2015 Singapore-based Puma Energy Group Pte. has completed its purchase of UK midstream and downstream assets from Murco Petroleum Ltd., a subsidiary of ...

BP to settle federal, state Deepwater Horizon claims for $18.7 billion

07/02/2015 BP Exploration & Production Inc. has agreed in principle to settle all federal and state claims arising from the 2010 Deepwater Horizon inciden...

MARKET WATCH: NYMEX oil prices plummet on crude inventory build, Iran deadline extension

07/02/2015 Oil prices plummeted more than $2/bbl July 1 to settle at a 2-month low on the New York market after a weekly government report showed the first ri...

API to issue recommended practice to address pipeline safety

07/01/2015 The American Petroleum Institute expects to issue a new recommended practice in another few weeks that addresses pipeline safety issues, but the tr...

Shell Midstream Partners takes interest in Poseidon oil pipeline

07/01/2015 Shell Midstream Partners LP has completed its acquisition of 36% equity interest in Poseidon Oil Pipeline Co. LLC from Equilon Enterprises LLC, a s...
White Papers

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by
Available Webcasts


The Resilient Oilfield in the Internet of Things World

When Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.

register:WEBCAST



On Demand

Taking the Headache out of Fuel License and Exemption Certificates: How to Ensure Compliance

Tue, Aug 25, 2015

This webinar, brought to you by Avalara, will detail the challenges of tax document management, as well as recommend solutions for fuel suppliers. You will learn:

-    Why it’s critical to track business partner licenses and exemption documents
-    The four key business challenges of ensuring tax compliance through document management
-    Best practice business processes to minimize exposure to tax errors

register:WEBCAST


Driving Growth and Efficiency with Deep Insights into Operational Data

Wed, Aug 19, 2015

Capitalizing on today’s momentum in Oil & Gas requires operational excellence based on a clear view of what your business data is telling you. Which is why nearly half* of oil and gas companies have deployed SAP HANA or have it on their roadmap.

Join SAP and Red Hat to learn more about using data to drive process improvements and identify new opportunities with the SAP HANA platform running on Red Hat Enterprise Linux. This webinar will also show how your choice of infrastructure impacts the performance of core business applications and your ability to achieve data-driven insights quickly and reliably.

*48% use SAP, http://go.sap.com/solution/industry/oil-gas.html

register:WEBCAST


OGJ's Midyear Forecast 2015

Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected