the RUSSIA oil & gas competitive intelligence report - Report Buyer

More documents

Recommendations

Info

Russia Oil and Gas Competitive Intelligence Report 2010 Company Profiles Gazprom Company Analysis SWOT Analysis The threat of a break-up appears to have passed, with Russia keen to consolidate the gas major’s position, strengthen its grip on aspects of the energy market and liberalise domestic and CIS pricing. It also intends to increase its direct ownership. With higher domestic selling prices, earnings will benefit and more cash will be available for supply and export expansion. The addition of Sibneft has accelerated the growth of Gazprom and established it as the leading Russian generator of hydrocarbons volumes, revenues and earnings. Strengths: Dominant share of upstream gas supply Control of gas transportation system Rising export demand for gas Huge exploration upside potential Scope for domestic merger Weaknesses: Cost and efficiency disadvantages Rising investment requirement Artificially low domestic gas prices Financial Statistics Revenues • RUB3.0trn (2009) • RUB3.52trn (2008) • RUB2.42trn (2007) • RUB2.15trn (2006) • RUB1.38trn (2005) Net income • RUB793.8bn (2009) • RUB742.9bn (2008) • RUB658.0bn (2007) • RUB613.3bn (2006) • RUB311.1bn (2005) Operating Statistics (inc. Gazprom Neft) Gas production: • 462.0bcm (2009) • 550.0bcm (2008) • 548.6bcm (2007) Crude production: • 645,600b/d (2008) • 680,000b/d (2007) Condensate production: • 220,000b/d (2008) • 226,000b/d (2007) Opportunities: Threats: Growth in domestic/CEE/EU gas demand Large areas of unexplored territory Incorporation of Sibneft assets and management Efficiency gains/price liberalisation Russian corporate governance Changes in national energy policy © Business Monitor International Ltd Page 21
Russia Oil and Gas Competitive Intelligence Report 2010 Market Position Gazprom accounts for 80% of Russia’s gas production (2009) and holds at least two-thirds of the nation’s gas reserves (or 15% of world reserves). The company also has a virtual monopoly control over the domestic gas pipeline network, which supplies fuel to almost every Russian region, the CIS states and over 25 European nations. The firm remains heavily reliant on overseas gas sales, as it is forced to supply gas to the domestic market at subsidised rates. Domestic prices, however, are gradually being liberalised and are set to reach around US$70/mcm in 2010 and US$90/mcm in 2011, up from around US$20/mcm in early 2000s. Notable foreign assets include minority stakes in China’s West-East gas pipeline, and in phases 2 and 3 of Iran’s giant South Pars project. Strategy In 2009, Gazprom’s production fell to 460bcm, according to preliminary government figures. This was the worst performance in Gazprom's history, with the current low of 512bcm registered in 2001. In Q110, however, domestic demand began to recover, pushing up Gazprom's production figures. This led CEO Alexei Miller to announce a more ambitious target of 529bcm for 2010. In April 2010 he told Russian media that by 2013 the company expected to produce 565.5bcm, which would be a 13-year production high. Speaking at a news conference on June 9, however, Gazprom's gas and condensate departmental head, Vsevolod Cherepanov, said that from mid-May 2010 the company had begun to see a much sharper seasonal drop in demand than it had expected. Cherepanov said that the company has now revised its gas production forecasts. The company now expects to produce 519.3bcm in 2010, down roughly 10bcm on Miller's forecasts. He said that the company expects this to increase to 528.6bcm in 2011 and to 542.4bcm in 2012. By 2030, Gazprom wants to become a global energy player, reaching new markets with LNG and underwater pipelines. It wants to add 90mn tonnes of LNG capacity by 2030. At present Sakhalin-II is the only operational liquefaction terminal. With output at its mature Western Siberia fields in decline, Gazprom expects new generation projects in the Arctic (Yamal, Shtokman), East Siberia (Kovykta, Chayandinskoye) and the Far East (Sakhalin) to fuel future growth, accounting for half of its production by 2020. Gazprom also planned to supply about 25% of the world’s LNG needs by 2030, but that target was scrapped following the decline of the US import demand. By early 2010 Gazprom’s executives had acknowledged the need for a strategic overhaul owing to the negative impact of rising domestic US gas production. In December 2005, then deputy chairman Medvedev announced Gazprom's aim 'to gain more than 10% of the US market by 2010, increasing to 20% [at a later date]'. With US demand for gas imports on the wane, these targets are now looking decidedly unrealistic. Having scuppered Gazprom's North American ambitions, the spreading 'shale revolution', is beginning to pose a threat to its core business closer to home. The first negative consequences are already being felt by the company, as LNG cargoes head for European ports having been turned away from the US. There is, © Business Monitor International Ltd Page 22
Page 1 and 2: 2010 www.businessmonitor.com the RU
Page 3 and 4: Russia Oil and Gas Competitive Inte
Page 21: Russia Oil and Gas Competitive Inte
Page 73 and 74:
Russia Oil and Gas Competitive Inte
Page 75 and 76:
Page 77 and 78:
Page 79 and 80:
Page 81 and 82:
Page 83 and 84:
Page 85 and 86:
Russia Oil & Gas Competitive Intell
Page 87 and 88:
Page 89 and 90:
show all

the RUSSIA oil & gas competitive intelligence report - Report Buyer

Create successful ePaper yourself

Delete template?

Save as template?