The Ministry of Economic Development of Russia prognosticates that in 2015 Gazprom will produce the smallest amount of fuel in its entire history. In the near future the state corporation may have to put off the completion of some projects and revise their scale. At the same time the corporation will continue to diversify, albeit at a slower pace, the Head of the Department for Strategic Studies in Energy of the Analytical Center Alexander Kurdin commented on the situation in an interview for the 'Kompaniya' business weekly.
Gazprom to Continue Diversification
Gazprom’s output was declining at an uneven pace from 2011 (back then it produced 505 billion cubic meters of gas) through 2014 (when it produced 432 billion cubic meters), the expert noted. (The Ministry of Economic Development prognosticates that in 2015 Gazprom will produce the smallest amount of fuel in its entire history.) In 2015, the company will also be looking at the risk of declining domestic demand due to the economic recession Russia is experiencing. Sales outside of Russia are declining as well. In H1 2015, exports of Russian natural gas fell to 89 billion cubic meters from 99 billion cubic meters sold in the first 6 months of 2014. “To a large extent this stems from less natural gas being sold to Ukraine,” Mr. Kurdin explains.
“In 2014, the mineral production tax and the natural gas export duty accounted for a little over 10% of the federal treasury’s oil and gas revenue. With the devaluation of the ruble taken into account, the price of hydrocarbons only have a limited impact on its balance. If a threat of budget deficit results from this, it has got a lot more to do with the oil sector rather than with the natural gas industry,” the expert considers.