SHARP CHANGES DUE IN RUSSIAN GAS INDUSTRY

Russia's natural gas industry is undergoing drastic changes.

The federation has set ambitious production goals for the next 12 years.

To facilitate that effort, Moscow has given state owned Gazprom responsibility for handling all of Russia's natural gas exports under government contracts in 1993.

Meantime, President Boris Yeltsin has signed a decree to reorganize Russia's gas associations into joint stock companies.

GAS PRODUCTION

When all figures are in, Moscow expects Russian gas production to have declined slightly for 1992 at about 61.8 bcfd from 62.2 bcfd in 1991 (OGJ, Nov. 16, 1992, Newsletter).

However, gas flow is expected to recover and increase by the end of the decade, OPEC News Agency reported.

Vladimir Resunenk, a Gazprom board member, said by 2005 Russia's gas production is to climb to 88.5-89.3 bcfd.

Resunenk said Russia will not necessarily boost gas exports to major European markets. Instead, future gas developments and sales will hinge on international gas prices.

Resunenk reiterated the future of Russian gas production will focus on western Siberia. Gas from Yamal Peninsula is to be on stream in 1997-98, and offshore fields are to start production after 2002.

EXPORTS

Moscow decided Gazprom will be the sole exporter of Russian natural gas and has established an export quota for the gas firm.

The quota calls for exports of 10.9 bcfd in 1993. That compares with an average 9.5 bcfd the first 8 months of 1992, which earned the federation $5 billion.

Itar-Tass News Agency reported Gazprom will be exempt from export duties if it does not exceed the quota. About 55% of gas export revenues will go to the government, with the rest earmarked for the gas industry.

The only foreign trade intermediary will be Gazexport, which will be entitled to a 1% commission.

The government also ordered that clearing payments for Russian exports will be replaced by commercial terms, which may eliminate problems in the transactions but could pose problems for C.I.S. members that are trying to establish domestic currencies.

State production figures point to Russian gas exports to western Europe hitting 26 bcfd in 1995.

Resnenk said the collapse of the Soviet Union has changed Russia's gas export profile dramatically, with exports increasing to 27% of total production from 13%. He noted the major factor underlying those figures is that supplies to Ukraine and the Baltic states are now considered exports.

Official figures show that Russia's natural gas deliveries to foreign customers slipped during the first three quarters of 1992. They came to 64.6 bcm (2.28 tcf), 3.1% less than in the first 9 months of 1991.

STOCK COMPANIES

Yeltsin's reorganization decree calls for the Federal Property Management Committee to determine the amount of shares in the charter capital of each gas entity that is part of a larger association that will be owned by the state, districts, and cities, Tass reported.

Russian republics, territories, and regions will determine the shares to be owned by districts and cities for all other gas enterprises.

Tass reported production and development bases, gasoline service stations, and high and medium pressure gas pipelines are considered federal property.

The decree also defines the rights of workers in the reorganization process and sets up a procedure for transferring shares of regional joint stock gas supply and service companies on the republic, territory, and regional level.

State owned Rosstroigazifikatsia Association has been reorganized into a joint stock company, Rosgazifikatsia.

Tass said to ensure that republics, territories, and regions participate in managing the properties, the State Property Management Committee will earmark 40% of its shares in the company to territorial joint stock gas supply and service companies in equal proportion to their authorized capital.

All dividends from the state owned shares will be owned by the companies for the first 3 years.