Gazprom cuts gas production
Gazprom will produce 552-553 m3di gas this year, down from the originally planned figure of 561-563 m3. Unlike petrol, gas prices in the European Union have remained at their highest levels; in October, the average price of gas in Europe was above US$ 500 per 1,000 m3.
The impact of the world’s financial crisis on the metallurgic sector, the construction industry and power stations has forced companies to announce reductions in production volumes
Russian gas exports to EU countries have thus dropped; for example, by 19 per cent in Germany and 13 per cent in Poland.
Gas prices follow oil prices eventually, with a delay of several, and are expected to drop around February next year, another reason for buyers to put off purchases now.
But for the online journal EastWeek lower revenues from gas sales will exacerbate the problem of insufficient investments in developing new gas fields.
Indeed Gazprom has often been criticised for not investing enough in research and up scaling Russia’s gas fields, preferring instead to focus on foreign investment to ensure its leadership role in the world.
In Russia itself the authorities have given the energy giant a monopoly position at the expense of other gas producers.
Now its production cannot even cover the domestic market by 4 billion m3 which may reach 120 billion m3 in 2010 and 340 billion m3, this according to the International Energy Agency (IEA).
On the short run, lower demand at present will allow Gazprom to create reserves, but without major investments the risk of a gas deficit in a few years will increase given the growing demands at home and in the European Union.