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Gazprom Chief Optimistic Despite Share Price Plunge

The Moscow Times

25 September 2008

Gazprom, whose debt bill exceeds $50 billion, has not suffered in the global financial crisis and is confident that it will be able to fund all its projects in due course, chief executive Alexei Miller was quoted as saying Wednesday.

The capitalization of Gazprom almost halved to $193 billion last week with the dive in the Russian share market. Its shares closed today up 5.4% on the MICEX.

“We see no risks for the company. The interest from financial credit institutions wanting to lend to Gazprom is as big as it was before the crisis,” said Miller during a trip to the Yamal-Nenets autonomous district, Kommersant reported.

Gazprom is expected to consider increasing its investment program from the earlier approved 821.7 billion rubles ($33 billion) for this year.

A source close to Gazprom’s board said the company was planning to cut its huge debt. The source said Gazprom, whose board is expected to discuss the debt situation Tuesday, was planning to “cut the debt to the level of the previous years.”

Gazprom’s consolidated debt stood at 1.2 trillion rubles ($48 billion) at the end of 2007, up 52 percent on a year earlier, after the company acquired control both of the major Sakhalin-2 offshore project and of Moscow utility Mosenergo.

Documents prepared for the meeting showed that the firm was by the end of this year going to cut its consolidated debt, comprising the debts of all its subsidiaries, to 920 billion rubles, the same amount as Gazprom’s head company had at the end of last year, the newspaper reported.

A part of the reduction, 360 billion rubles, is expected to be written off from Gazprom’s balance sheet after the company cuts its stake in Gazprombank, once its main banking arm.

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