SIBUR Plans to Increase Production by Over USD 100 Million in 2003

The SIBUR oil and gas holding has completed its examination of business plans for its subsidiary companies. According to SIBUR's press office, it plans to increase the average working efficiency of its companies from 55% to 69% of capacity. The holding's production output will increase by 3.9 billion roubles (USD 122 million), and its overheads will decrease by 5% to 9.7 billion roubles (USD 305 million). It plans to increase production without increasing its workforce, and the average output per employee will increase from 290,900 roubles (USD 9,150) in 2002 to 336,200 roubles (USD 10,570) in 2003. The holding currently employs over 100,000 people.

In 2003 a significant increase in expenditure on energy is predicted in the structure of the companies' breakeven margin - from 36.6% in 2002 to 40.5%. The increase in expenditure is due to the forthcoming 20% rise in energy tariffs in 2003. To neutralize this negative trend SIBUR is continuing its implementation of programme to reduce energy dependency, which is based on establishing its own generating capacity, and introducing energy-saving technologies. The holding plans to develop its own generating capacity by building gas-turbine power stations. SIBUR-Khimprom already has such a power station, and another is being designed for the SIBUR-Heftekhim plant in Nizhny Novgorod.

SIBUR is also developing cooperation with other leading oil companies to establish joint gas-energy companies. At the beginning of 2003 a memorandum was signed with Sibneft on the creation of a joint gas-energy firm based on the November Complex. Talks with other oil companies are continuing.

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