Gazprom confirms bullish price outlook
Gazprom is continuing its price negotiations with a number of European gas consumers with long-term contracts, a company representative told a telephone press conference on its 2010 International Financial Reporting Standard (IFRS) results on Thursday. "The talks are complex, and we want to take into consideration the interests of our customers, as well as our own interests. At this point, it is not possible for us to give the final word on what our pricing policy will be in this regard," the company added.
Several European companies have started arbitration procedures against Gazprom's pricing policy, and a lack of flexibility cost the Russian producer some market share in Europe during the previous year.
Up to now, however, Gazprom remained adamant that its oil-indexed price formula should stay intact.
Asked what Gazprom's price forecasts were for this year, Gazprom said, in line with an earlier statement made by Alexei Miller (see ESGM 26 April 2011): "In brief, we expect spot and contract prices to increase. Our CEO gave us a very precise indication that these prices could reach $500/thousand cubic metres (Km³) (€32.8/MWh)."
Gazprom said the share of central Asian gas in its exports in 2011 will stay the same as last year at 35 billion cubic metres (Gm³). Gazprom remained confident that its European exports are set to increase this year, compared with 2010, and as a result, would justify a possible increase in investments on the back of the additional revenues. "We revise the CAPEX [capital expenditure] budget every half year and do not rule out an increase later this year. It is important to note though, that 2012 and 2013 will be significant years for us in terms of production and transport development projects, including in the eastern region and Yamal," a Gazprom official said.
In 2010, Gazprom's gas sales volumes to Europe and other countries outside Russia/Former Soviet Union (FSU) came to 148.1Gm³ - more or less stable with 2009 levels of 148.3Gm³. The value of the net gas sales to Europe and other countries came to Russian rouble (Rb) 1.1 trillion (€0.27bn), down 1% on 2009.
Gazprom's total 2010 gas sales (net of excise tax, VAT and customs duties) came to Rb2.186 trillion, the company said, up 14% year on year. Gazprom said this was the result of an increase in sales volumes and prices to countries of the FSU, as well as an increase in Russian regulated gas tariffs.
Gazprom sold 70.2Gm³ to FSU countries in 2010, up 24% from the 2009 level of 56.7Gm³. The value of gas sales to the FSU in 2010 came to Rb450.14bn, net of VAT and customs duties, 45% up on 2009 (Rb309.9bn). The increase was not only the result of a rise in sales to the FSU, Gazprom said, but also because of a 10% increase in average realised gas prices in rouble terms (including excise tax and customs duties). The average 2010 price of gas sold to the FSU was $228.96/Km³, compared with a 2009 average price of $202.1/Km³ (including customs duties, but net of VAT).
Gazprom's average European gas price in 2010 was lower than the 2009 price in rouble terms, but higher in dollar terms. The average gas price in 2010 came to Rb9166.6/Km³ ($298.17)/Km³), compared with a 2009 figure of Rb9413.5/Km³ ($287.5/Km³).
Sales volumes on the Russian domestic market totalled 277.3Gm³ in 2010, up 1.4% from a 2009 total of 273.5Gm³. Gazprom's 2010 sales in the Russian Federation, at Rb636.8bn (net of VAT), were 27% up on the 2009 figure of Rb503.1bn. The increase was largely the result of a rise in the average regulated gas price in the Russian Federation.
Gazprom's 2010 average gas price in Russia, excluding VAT, was $74.71/Km³, compared with a 2009 price of $58/Km³.
Gazprom's gas transport sales totalled Rb92.6 billion in 2010, a 41% increase from the 2009 level. The company said this was mainly because of an increase in gas volumes transported on behalf of independent gas suppliers.
Gazprom reported pre-tax 2010 profits of Rb1.27 trillion, compared with Rb979.4 billion in 2009. Net profit came to Rb998 billion in 2010, up on the previous year's figure of Rb793.8 billion. ES
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