AGM

Gazprom's Investment Strategy Runs Out Of Steam

By Sergei Blagov

Russian state-run gas giant Gazprom has cut its investment program in response to the difficulties it faces in the current economic downturn. These cost-saving measures contrasted sharply with Gazprom's pledge last year to become the world's largest company. Such efforts were supported by the Russian government. On July 13, the cabinet approved Gazprom's revised investment program worth 775 billion rubles ($25 billion) or 15.8 percent down from its 920 billion rubles ($29.7 billion) planned earlier. At a cabinet meeting, Prime Minister Vladimir Putin conceded that Gazprom's January-June 2009 production was 20.8 percent down year-on-year. However, Putin voiced confidence that Gazprom's production and sales will return to their pre-crisis levels eventually.