Royal Dutch Shell Plc  .com Rotating Header Image Gazprom without money for Shtokman development

The major investments placed in company acquisitions this year has forced Russian gas giant Gazprom to considerably cut its planned investments in the development of the Shtokman field. The cuts leave it up to French partner Total to invest in the huge project.

In a meeting last Friday, Gazprom’s Board of Directors approved the final version of the company’s investment plan for 2007. According to the plan, Gazprom will cut its investments in the Shtokman field with 50 percent from the original 17 billion RUB to 8.6 billion RUB, newspaper Kommersant reports.

The revision of the investment plan might significantly complicate Gazprom’s capability to meet deadlines in the Shtokman project. According to the official schedules, the Shtokman field will be up an running from year 2013.

According to a press release from the company, the Board of Director approved the investment plan with total 2007 investments amounting to 779.36 billion RUB, which is up 249.98 billion RUB compared with the 2006 plan. However, the company’s capital investments for the year are cut with 24.06 billion RUB, thus leaving little to projects like Shtokman.

According to Kommersant, several experts now voice their critics over the company’s policy line. They say that Gazprom will have to invest more, and not less, in new project in order to meet growing demands both internationally and domestically. The European Bank of Reconstruction and Development (EBRD) has already said that the adopted investment plan makes it impossible for it to allocate an expected loan to the Sakhalin-2 project.

It might now be up to French partner Total to follow up the project with necessary finances. A deal on the Shtokman project was signed by Gazprom and Total in early July this year and this agreement confirms that the development process is to start already this summer. Total’s Christophe de Margerie has already said that his company will contribute with at least 15 billion USD in the project, 5 billion USD of which will be invested over the first five years.

Analysts have long noted that Gazprom will have major difficulties with the funding of the huge Shtokman field, and that foreign capital inevitably will be needed. Gazpom currently has more than 950 million RUB of debts, and has made several major acquisitions only the last year, among which is takeover of the “Sakhalin-2” project, the “Kovykta” field and the investments in the Mosenergo company.

Experts now say that Gazprom will have to stagger its appetite for company acquisitions and rather start investing in field developments. Such a change of focus might force the company to stay out of new investment objects like the TGK-1 company. and its also non-profit sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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