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Russia’s Gazprom can implement investment program at oil prices of $30-40 — executive

February 19, 2015, 10:08 UTC+3 MOSCOW
Gazprom is in good financial shape despite currency fluctuations in Russia
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© AP Photo/Alexander Zemlianichenko

MOSCOW, February 19. /TASS/. Russia’s Gazprom will be able to implement all of its investment projects even if oil prices are as low as $30-40  per barrel, Gazprom’s top executive said on Thursday.

Andrey Kruglov, the financial director of the Russian gas giant, said in an interview with the Rossiya-24 television channel that while forming its budget for 2015 the company had considered a scenario of oil prices dropping to $30-40 per barrel. "The company will be ready to implement all of its investment plans even at such oil prices," he said, adding that even if oil prices stayed at $40 for a year, the company would not abandon its investment program.

According to the Gazprom executive, the gas giant draws its annual investment programs on the basis of a conservative scenario and adopts them in December, whereas it can judge about yearly performances already in November. That means that the company can can include only top-priority projects in its investment program.

Gazprom is in good financial shape

Kruglov said Gazprom is in good financial shape despite currency fluctuations and can repay its debts in a span of one year.

Dollar and euro earnings from exports of gas and other commodity account for a large part of the company’s revenues. "Thanks to it, the company is in a good financial shape," he said.

Apart from that, he said, the company always forms its budget on the basis of a conservative scenario and this fact makes it possible for the company to repay its debts in a span of one year, if need be.

According to Kruglov, Gazprom’s financial standing in the fourth quarter of 2014 is to be positive, primarily thanks to Ukraine’s repayment of part of its debts, although the outstanding debt is still exceeding 2.2 billion U.S. dollars.

He also said Gazprom sells its currency earnings. "We need roubles and we always sell practically all of our proceeds but for funds we need to make purchases outside Russia," he said.

Touching on possible uses of gas pipelines built in the Russian territory under the abandoned South Stream project, Kruglov said these facilities would be used for another project, the Turkish Stream.

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