A Review of the Nigerian Energy Industry

Gazprom in ‘investment hike’

Gazprom07 October 2013, News Wires – Rising cost levels at Gazprom have again come under scrutiny after the Russian state-owned gas giant was reported to have increased its investment level for the current year by 46% to $32 billion.

The company has now increased its planned investments for this year to 1.03 trillion roubles ($32.01 billion) from 705 billion roubles envisaged previously, mainly due to higher long-term financial costs, Interfax news agency reported.

A company spokesman declined to comment.

Gazprom, which earlier this year acquired Moscow power generation company Moek with a bid of around $3 billion, has faced criticism from analysts over a swollen investment programme and ineffective spending.

“Gazprom continues to show extremely poor capital discipline, and significant structural and organisational changes are required to alleviate investors’ concerns over its investments,” Otkritie brokerage said in a note cited by Reuters.

Meanwhile, the company, led by executive chairman Alexei Miller, is set to face charges of anti-competitive practices under a European Union probe into claims that it abused its dominant position in the continent’s gas market.

According to EU rules, Gazprom could be fined up to 10% of its annual revenue if found guilty of the charges, which would equate to a fine of up to $15 billion.

– Upstream

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