Gazprom Domestic loisses to Shrink By 70% 2002

Gazprom, the world's top natural gas producer, expects its loss on domestic operations to shrink by over seventy percent to approximately 12 billion rubles ($381 million), Chief Financial Officer Boris Yurlov has said.

Russia, which caps energy prices to subsidize industry and slow inflation, boosted boost gas prices by fifteen percent starting July to 572 rubles per thousand cubic meters of gas. That is nineteen percent less than the 683 rubles that Gazprom needs to break even on local sales, Yurlov told the company's annual shareholders meeting. Gazprom's loss on domestic sales was forty two billion rubles.

Gazprom has said it expects exports, which generate four fifths of total revenue at the firm, to fall by a sixth this year to $12 billion, said Yuri Komarov, Gazprom's deputy chief executive for exports. With domestic sales running at a loss, that may make it harder for the company to fund plans to invest in new fields to reverse a trend of declining output.

The company, which supplies Europe with about a quarter of its gas needs, expects prices for exports will be $92 per 1,000 cubic meters, CFO Yurlov said. That compares with average prices of about $113 last year.

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