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The Present and Future of Gazprom

The Present and Future of Gazprom

Gazprom’s 2010-2011 financial results were phenomenal. An employment contract of Gazprom CEO Alexey Miller, who has been managing the gas giant for 10 years, was prolonged ahead of time for another five years. However, the country’s main company found itself under powerful pressure both on the domestic and external markets.

Authorities actively support expansion of NOVATEK, whose development is limited by a monopolistic character of the gas market, or, to put it differently, by the existence of Gazprom in its current form. This process unfolds without radical moves so far, considering the upcoming elections, but in the next electoral cycle serious reconstruction of the market is possible.

Outside the country Gazprom is also facing problems. Moscow and Brussels have entered tough confrontation over the rules of operation on European markets, as well as over variants of gas transit from the Caspian Sea region. The question of transit through Ukraine is not solved either. There is a complicated dialogue with China. Attempts to develop relations with Japan following the Fukushima NPP catastrophe and revive the project of laying a trans-Korean gas pipeline do not promise fast and obvious dividends.

Meanwhile, there is a necessity to sharply increase investments in gas production and transportation. The respite Gazprom received in the production segment during the crisis drop in the EU demand for natural gas is over.

A new report elaborates on the following issues:

  • Changes at Gazprom during A. Miller’s 10 year tenure

    • Revenues and expenditure, efficiency of the company’s operation
    • Situation in the production sector
    • Transportation and marketing
    • HR policies of the monopolist
  • Competition with NOVATEK as one of the main intrigues

    • Situation on the domestic gas market
    • Different taxation approaches to companies
    • The future of the single export channel
    • Shtokman vs. Yamal LNG
    • Competition in petrochemistry
  • Gazprom on external markets

    • Gazprom’s standing in the post-Soviet area
    • Situation around gas transit to Europe
    • European-Caspian storm
    • Asian vector of development, the future of LNG business
  • Forecast of developments

    • The time of grand spending
    • The future of Yamal, Shtokman, Eastern Siberian program, gas processing plants and new pipeline projects
    • Prospects of the Russian gas sector development after Vladimir Putin’s comeback as Russian president

The contents of the report:

Introduction 3
Chapter 1. How Gazprom Has Changed for 10 Years of Aleksey Miller’s Rule 4
  1.1. Capitalisation, Financial & Economic Standing of Corporation 6
  1.2. Upstream Unit 8
  1.3. New Lines of Business 10
  1.4. Second Wave of Splitting of Assets off from Gazprom 12
  1.5. Staff 13
Chapter 2. Growth of Novatek 15
  2.1. Domestic Market 16
  2.2. Novatek Strategy, Production Growth Prospects 19
  2.3. MRET 20
  2.4. Yamal LNG vs. Shtokman 21
  2.5 Scheming against Single Export Channel 22
Chapter 3. Gazprom in Foreign Markets 24
  3.1. Export Division Reorganisation 24
  3.2. From Intermediaries to Intermediaries 30
  3.3. Demand in Europe after Fukushima, Revision of Long-term Contracts 33
Chapter 4. “War” with Europe: from Nord Stream to Orientation towards Asia 38
  4.1. Gas to Europe Round Transit Countries 38
  4.2. Combat on Caspian Sea, Confrontation with Brussels 43
  4.3. Orientation Towards Asia, Solidarity with Other Exporters 45
Chapter 5 Time of Massive Expenditure 49
  5.1 Yamal Mega Project 50
  5.2. Sakhalin 52
  5.3. Yakutia 54
  5.4. Shtokman 54
  5.5. South Stream 56
Chapter 6. Forecast. Gazprom on Path to Restructuring 59
Date of issue: December 9th, 2011

If you are interested to obtain please contact » Elena Kim

Other issues:
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Analytical series “The Fuel and Energy Complex of Russia”:

New OPEC+ Deal and Future of Oil Business in Russia
Gazprom on the background of external and internal challenges
Regulation of Oil and Gas Sector in 2019 and Prospects for 2020
Fiscal Policy on Oil and Gas Sector: Revised as Often as Wikipedia
The tax system in the oil and gas sector continues to undergo radical changes. The beginning of 2019 saw the introduction of a new tax regime: additional income tax. That experiment was supposed to start migration of the oil industry to an innovative principle of taxation: on profit, not revenue. It seemed that a new main road was found. In the same year, however, the Finance Ministry launched an overt offensive against AIT. The fear of loss of government revenue now is more powerful than the threat of causing oil production to collapse in the medium term because of a tax system that does not stimulate investment. The Finance Ministry would strongly prefer to speed up the tax manoeuvre completion that earns the state budget additional money. Oil and gas companies respond to this with individual lobbying, attempting to wangle special treatment for their projects.
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The “zero hour” comes in less than a month: the contracts for gas transit through Ukraine and for supplying Russian gas to the country terminate at 10 am on 1 January. Meanwhile, Gazprom and Naftogaz are very far from looking for a mutually acceptable solution. The entire European gas business is watching intently the negotiations between Russia and Ukraine. Everyone is waiting for a new “gas war”: the January 2009 events proved to be a serious test both to European consumers and to Gazprom as a supplier. Is there still a chance of agreement? If there is not, will Gazprom cope with its obligations to deliver gas to Europe? Is Russia bluffing as it assures that the new infrastructure and gas in underground storage facilities will enable it to get by without Ukrainian transit even as soon as this winter? What will happen to Ukraine itself at the beginning of 2020?

All reports for: 2015 , 14 , 13 , 12 , 11 , 10 , 09 , 08 , 07

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