Risk management system. Key Risk Factors Gazprom Environmental Risk Management Strategies for an Industrial Enterprise
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1 UDC RISK MANAGEMENT OF A GAS TRANSPORTATION ENTERPRISE (BY THE EXAMPLE OF GAZPROM TRANSGAZ TOMSK LLC) V.E. Zaikovsky (Senior Lecturer, Department of Engineering Entrepreneurship) (National Research Tomsk Polytechnic University, National Research Tomsk Polytechnic University) Activities of any economic entity are accompanied by risks. Risks must be identified, their impact assessed and managed appropriately. The article classifies the risks of a gas transportation company and provides examples of their management by the company. It is shown that risk management is carried out using the whole complex of interrelated legal, organizational, administrative, economic, engineering and other measures. Risk management in a company is defined as a continuous cyclical process of making and implementing management decisions, consisting of identifying, assessing and measuring risks, responding to risks, monitoring performance, planning activities to manage and monitor risks. Risk management is part of the overall management process of the company, aimed at optimizing the magnitude of risks and extending to all areas of its practical activities. Gazprom, the largest Russian enterprise, is a leader among global energy companies, pursuing a policy of developing new markets, diversifying activities, ensuring the reliability of supplies, actively attracts funds from investors to implement its projects and, as a public company, informs creditors and shareholders about the risks of its activities. Subsidiaries of JSC "Gazprom" move in line with the strategy of the holding, perform local tasks in the territory of their presence, partially bear the risks of the parent company. OOO Gazprom transgaz Tomsk (hereinafter referred to as the Company) is the easternmost gas transportation company of OAO Gazprom. Carries out production activities in 12 constituent entities of the Russian Federation, in Eastern, Western Siberia and the Far East, the number of employees is more than 6.5 thousand people. Due to the participation in the implementation of major gas transmission projects of OAO Gazprom, the length of the main gas pipelines serviced and the number of the Company's personnel increase by % annually. At present, OAO "Gazprom" in general and OOO "Gazprom transgaz Tomsk" in particular pays great attention to the sustainable development of the industry and its individual subsystems. Development sustainability analysis involves the development of medium- and long-term forecasts together with multifaceted assessments of various risks and their management. At the same time, "risk assessment" is understood as a comprehensive, scientifically based methodology for probabilistic forecasting of economic activity and its consequences under conditions of a high degree of uncertainty, especially in the long term. The very concept of risk includes a probabilistic measure of danger or a set of dangers established for a particular object in the form of possible losses for a given time. As a result of the analysis of the risks of a gas transmission company, 2 large groups were identified: strategic risks (related to project activities) and risks associated with the current (operational) activities of the company. Risk management at OOO Gazprom transgaz Tomsk is carried out in accordance with 4 standard strategies: evasion, transfer, reduction, acceptance. one
2 I. Strategic (project) risks 1. Risks associated with entering new regions and new markets By the decision of the Chairman of the Gazprom Management Committee A.B. Miller, the Company was appointed responsible for the operation of gas transmission systems (GTS) created and acquired by OAO Gazprom in the regions of Eastern Siberia and the Far East. In connection with the beginning of the implementation of promising tasks, the Company plans to operate in new regions, where territorial expansion is carried out in conditions of uncertainty. Branches of the Company are created in order to obtain the necessary work experience in new regions. In order to increase the effectiveness of the Company's interaction with state authorities, enterprises, companies and organizations of the relevant regions, information and analytical support is provided for the activities of the Company's branches and active work is carried out to build relations with the public and the media. The Company's strategy is aimed at mutually beneficial cooperation with regional authorities in order to fulfill the tasks of OAO Gazprom and implement the Eastern Gas Program and is carried out in fruitful cooperation with state territorial bodies. 2. Risks associated with the implementation of new gas transmission projects In connection with the expansion of the territorial scope of OAO Gazprom, the Company was appointed as the customer for the construction of gas transmission facilities in the regions of Eastern Siberia and the Far East, having no experience in implementing such major projects as the Power of Siberia gas pipeline. In accordance with the principles of project management, the directions of organizational activities of OOO Gazprom transgaz Tomsk in Eastern Siberia and the Far East are substantiated, including the creation of an organizational structure, the organization of a personnel training center, project management by life cycle phases, including a comprehensive survey of facilities under construction, their design, development of plans and schedules for construction and commissioning of completed facilities, introduction of a risk management system for the implementation of investment projects. 3. Risks associated with vertical integration and diversification of activities 2
3 In order to strengthen the raw materials and fuel and energy base, OAO Gazprom expanded the scope of its activities by acquiring shares in the Khabarovsk gas transportation company OAO Daltransgaz, placing the obligation to bring its management system to the standards of OAO Gazprom on the Company. Also OAO Gazprom, in order to improve the management structure, decided to carry out the procedure for the merger of OOO Gazprom invest Vostok with the Company. Any badly executed merger or acquisition can have a negative impact on the reputation, financial condition and results of the Company's activities. The Company carries out continuous improvement of the internal corporate management system in order to increase the efficiency of its activities. Work is underway to bring the organizational structure in line with the corporate requirements of OAO Gazprom, including the approved standards for the number of employees and corporate norms manageability, a quality management system based on the international standard ISO 9001:2008 has been introduced. The Company has accumulated positive experience in integrating acquired assets into the company's activities and bringing them in line with Gazprom's corporate requirements. The current management procedures in the Company and ongoing projects to improve management efficiency are planned to be extended to integrating companies as having an impact on the Company's activities. In accordance with the informatization strategy of OAO Gazprom, work is underway to create a single information space, projects are being implemented to create vertically integrated information management systems, an automated budget management system, and an automated system for generating consolidated reporting. The ongoing work will increase the transparency of corporate reporting from primary data sources to key performance indicators and risks. II. Risks Associated with the Company's Operating Activities 1. Risks Associated with Geographical and Climatic Conditions The Company operates gas trunkline systems running through the territories of the Urals, Siberian and Far Eastern Federal Districts. Peculiarities of the climate and remote geographical location of the regions of operation have a significant impact on the Company's activities. A significant share of the volume of gas transportation falls on Western Siberia, where the harsh climate increases the cost of transporting natural gas. The construction of the gas transmission system in Eastern Siberia will be carried out in even more difficult natural and climatic conditions. Certain impact on the gas withdrawal and receipt of the Company's revenue may have weather short term. However, the influence of this factor, which is of a probabilistic nature, on gas transportation over several years is insignificant, since mutual compensation occurs as a result of the alternation of cold and warm winters. 3
4 The Company successfully applies efficient technological processes for harsh climatic conditions. Programs are being implemented to improve the efficiency of the transmission system and the operation of the gas transmission system. The Company actively participates in the development and implementation of sectoral programs to improve the efficiency of energy resources use and energy conservation. 2. Operational risks production facilities The Company operates hazardous production facilities and the main type of the Company's production activity for the transportation of natural gas is associated with a wide range of risks of a technological, technical and climatic nature, as well as the risks of negative actions of personnel and third parties, including the risks of personnel errors, theft, terrorist acts, sabotage. The implementation of these risks may cause significant damage to the Company's property interests and entail a decrease in production and economic performance. At the same time, the elimination of the consequences of natural and man-made accidents and other adverse events requires significant financial costs. When implementing the investment programs of the Company and OAO Gazprom, the primary task is to ensure the completion of construction (reconstruction) of investment objects, which is associated, among other things, with construction and installation risks characterized by a high level of damage. The stability of the functioning of the gas transmission system is ensured through the introduction of advanced diagnostic methods, reconstruction and modernization. The Company's gas transmission system ensures the reliability of gas supplies, which implies that in the event of an accident at any of its sections, gas supplies can be carried out along other routes, and the consequences of the accident are eliminated as soon as possible. The high speed of elimination of accidents is ensured by the professionalism of the Company's personnel, the availability of the necessary equipment and an emergency stock of material and technical resources. The Company has developed, approved and is implementing the Policy in the field of labor protection and industrial safety based on the international standard OHSAS 18001:2007, aimed at creating safe working conditions and preserving the life and health of workers, as well as ensuring the reliability of hazardous production facilities. In order to ensure the sustainable operation of the gas transmission system and minimize the volume financial resources directed to eliminate the consequences of natural and man-made accidents, as well as other adverse events (including terrorist acts and sabotage), a comprehensive insurance protection of the Company's property interests is organized, including property insurance, liability insurance during the construction, repair and operation of hazardous industrial objects. 4
5 3. Risks Associated with Environmental Pollution The Company's activities by their nature involve the risk of harm to the environment. As a result of causing harm to the environment or its pollution, the following are possible: legal consequences, including prosecution; financial costs associated with the payment of fines and compensation for the harm caused; damage to business reputation. The Company pursues a consistent environmental policy, implements programs and measures to reduce environmental impact, finances environmental activities, and introduces advanced resource-saving and other environmental technologies. The Company's environmental management system has successfully passed certification for compliance with the requirements of the international standard ISO 14001:2004. Pre-project environmental surveys are being carried out, environmental impact assessment of the planned activities is being carried out, and environmental expertise of projects is being carried out. At all stages of construction, operation and decommissioning of facilities, control over compliance with the requirements of environmental legislation and corporate environmental standards is carried out, environmental monitoring is organized, environmental measures are developed and implemented. As part of the comprehensive insurance coverage of the Company, liability insurance is provided for the construction and operation of hazardous production facilities, which ensures the payment of compensation for damage caused to the environment and minimizes the risk of negative financial consequences. The environmental information of the Company is public. 4. Risks of inability to renew licenses for the use of natural resources and other licenses The Company uses natural resources in accordance with licenses for the right to use subsoil for the purpose of extracting groundwater, and also carries out licensed activities in accordance with the obtained licenses. Most licenses provide for the ability to suspend, modify or revoke them if the requirements of the license agreements are not met. The licenses obtained by the Company cover the period Russian legislation provides for the possibility of renewing the license, but does not provide the licensee with an unconditional right to renew. five
6 The Company strictly complies with the requirements of licenses, takes the necessary actions to minimize the likelihood of revocation, suspension or change of licenses. The use of licenses and license legislation is systematically monitored. 5. Risks of cost growth Unit costs in capital construction in the oil and gas industry in the pre-crisis years grew at a rate exceeding inflation due to an increase in prices for raw materials, materials, components, services, including prices for metal, gas pumping units, etc. During the crisis, the costs of certain items stabilized or even decreased, but there is still a possibility of outpacing growth in costs in the future. The Company uses competitive procedures to select suppliers and works directly with suppliers. Monitoring of market prices for the main products, control of pricing of suppliers is carried out. Carried out successful work to increase the information transparency of the Company's activities, the improvement of competitive procedures continues. 6. Risks associated with the registration of rights to real estate and land OAO "Gazprom" In the conditions of constant increase of property and land resources and activities on an extended territory, in case of untimely or incorrect registration of rights to real estate objects and land plots, the Company may face claims of third parties. Lack of formalized rights to real estate and land plots may adversely affect the safe operation of production facilities and increase the risk of delays in investment construction. The intensive development of the gas transmission system in the regions of the Company's presence revealed the need to minimize the risk of violation of the security zones of the facilities of the Unified Gas Supply System. The Company carries out intensive and timely work on registration of rights both to the land plots used for the location of production facilities and to real estate objects. Legal methods are actively used to protect the interests of the Company, including appeals to the courts, in terms of confirmation and subsequent registration of rights to real estate and land plots. With the help of the electronic database "Unified register of registration of property rights to real estate", a monitoring system was organized for registering rights to real estate objects of branches and submitting relevant information from the regions to the central office of OAO Gazprom. Society holds a large-scale 6
7 work to prevent and eliminate violations of buffer zones by generating maps (plans) of buffer zones and entering relevant information about them into the state real estate cadastre. In the process of sustainable development, it is important not only to understand the possible risks associated with the multivariate development of the gas industry and its sub-sectors, especially when implementing programs for the reconstruction and development of gas transmission systems at Gazprom Transgaz Tomsk. When assessing the risk in general or any of its types, in particular, it is necessary to apply measures to manage this risk using the whole complex of interrelated legal, organizational, administrative, economic, engineering and other measures aimed at reducing or preventing possible or existing losses. The enterprise risk management system must be considered as an important component of the company's management system, which ensures an acceptable level of industrial and environmental safety, optimal use of resources and efficient functioning of the organization in the conditions of development variability. REFERENCES 1. OAO "Gazprom" strategy [Electronic resource]. URL: (date accessed:). 2. Markelov V.A. Reconstruction and development of regional gas transportation facilities based on system analysis (on the example of OOO Gazprom transgaz Tomsk). Diss. cand. tech. Sciences. Moscow, The main risk factors of OAO "Gazprom" [Electronic resource]. URL: (date accessed:). National Research Tomsk Polytechnic University NI TPU Russia, Tomsk, prosp. Lenina, 30 Tel.: 8 (3822) Fax: 8 (3822) URL: 7
UDC 65.014.1 IMPLEMENTATION OF THE PROVISIONS OF THE EASTERN GAS PROGRAM WITH THE HELP OF PROJECT MANAGEMENT METHODOLOGY V.E. Zaikovsky (Senior Lecturer, Institute for Social and Humanitarian Technologies) (National
Zaikovsky Viktor Eduardovich Lecturer, Department of Engineering Entrepreneurship, Institute of Social and Humanitarian Technologies, TPU. Email: [email protected] Research interests: UDC 65.014.1
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The management of environmental risks of an industrial enterprise should be carried out within the framework of the environmental management system at the stages of planning, organization and implementation of environmental actions and activities, contributing to the optimization of management decisions.
In order to organize risk management work at the enterprise, lists of objects, equipment, materials, professions, positions, teams should be compiled, the failure of which can cause: catastrophic damage; obviously great damage; damage comparable to the cost of preventing damage; minor damage.
The objective basis for building an environmental risk management system at an enterprise is the concept of acceptable risk. The content of this concept is based on three levels of environmental risk at different times: the initial level of environmental risk, i.e. the risk level of an idea, an idea for the development of economic activity without taking into account measures for its analysis; this risk is unknown, unestimated and, therefore, of a rather high level due to the unpreparedness of the manager for emerging environmental events; the estimated level of environmental risk, taking into account the measures for its analysis, as a result of which a real assessment of the level of risk was obtained; it is a risk analyzed and, therefore, a lower level due to the manager's readiness for environmental consequences; the final (final, acceptable) level of environmental risk, taking into account the developed and implemented active and passive measures to reduce its initial level.
The main provisions of the concept of acceptable risk, in the case of environmental risk, can be represented as follows: environmental risk is often a manageable parameter, the level of which can and should be influenced; a high level of initial environmental risk should not serve as a basis for refusing to make any economic decision; a detailed analysis of the environmental risk and the development of measures that reduce its negative consequences, as a rule, make it possible to make economic decisions that are actually implemented at an acceptable or acceptable level of environmental risk; The task of environmental risk management is to balance the benefits received from the implementation of an economic decision and the possible losses.
Thus, managing the environmental risk of industrial
enterprises is a balancing act between the level of possible losses and the potential benefit from the implementation of an environmentally risky economic decision through the use of various methods of influencing the level of environmental risk.
When managing the environmental risks of an industrial enterprise, their nature should be taken into account. In this regard, the enterprise acts as an environmental object, which is a specific social group, and the environmental risks arising from its operation are characterized as the probabilities of changing its stability and / or death (bankruptcy) due to changes in the environment. At the same time, from the point of view of simplifying the tasks of analyzing and managing environmental risks, probable changes in the sustainability of an industrial enterprise should be considered as primary in relation to changes in the environment, consisting of: the natural environment, which corresponds to natural environmental risks; the surrounding technogenic environment that generates technical and environmental risks; environmental and social environment from which social and environmental risks arise.
Natural and environmental risks, as a rule, do not have a special impact on an industrial enterprise, therefore it seems appropriate to keep them “without funding”.
As methods of influencing the level of technical and environmental risks of an industrial enterprise, it is proposed to use such methods as: risk avoidance; risk reduction; preservation (acceptance) of risks; transfer (transfer) of risks.
Evasion of environmental risks means the rejection of technical and technological actions and activities that entail the realization of an unacceptable level of risks.
Maintaining environmental risks at the current level may mean: refusal of any actions aimed at compensating the damage arising from the realization of risks (“without funding”); creation at the enterprise of special reserve funds (self-insurance funds or risk funds), from which losses will be compensated in the event of an adverse environmental event; receipt of state subsidies, credits and loans to compensate for losses and restore production.
The transfer of environmental risks implies the preservation of their existing level with the transfer in whole or in part to third parties. This includes insurance (property, personal, liability insurance), which involves the transfer of technical and environmental risks for a fee to an insurance company, as well as various financial guarantees and guarantees. The transfer of environmental risks can also be carried out by introducing into the text of documents (for example, contracts for the supply of products) special clauses that reduce the company's own liability in the event of unforeseen adverse events or transfer risks to the counterparty after the realization of environmental risks. Complete transfer of environmental risks can occur as a result of outsourcing, which in this case means the sale of environmentally hazardous business areas.
Of all the above methods of influencing the level of technical and environmental risks, their reduction plays a decisive role, which implies a reduction in either the size of possible environmental damage or the likelihood of environmental events, and is based on the greening of industrial production associated with the implementation of preventive environmental activities and the organization of environmentally friendly production (in the English transcription "cleaner production"), which is a logical completion of a multi-stage process of transformation in the system of environmental measures: technologies of the "end of the pipe" - low-waste, resource-saving technologies - production focused on preventing the formation of waste in places of their occurrence.
The methods of influencing the level of social and environmental risks of an industrial enterprise are: signaling; implementation of the strategy for improving the environmental image of the enterprise; creation of bilateral and multilateral transactional relations.
Signaling is understood as the behavior of an enterprise that is the opposite of opportunistic (i.e., pursuing selfish interests), which allows you to convince interested parties of its readiness to solve any environmental problems. Examples of signaling include so-called verifiable self-restrictions or commitments in the environmental sphere, long-term binding of an enterprise for environmental investments, environmental sponsorship, conditional contracts (for example, an obligation to re-equip transport in the event of
introduction of more stringent exhaust gas standards in the country), etc. All these signals should confirm the seriousness of the environmental intentions and actions of an industrial enterprise and thereby influence the public's perception of environmental risks associated with its activities.
The strategy for improving the environmental image of an industrial enterprise includes signaling as one of the possibilities, as well as various forms of public relations. Another means of improving a company's environmental reputation is to buy a so-called environmentally friendly portfolio, for example by purchasing shares in a recycling or recycling company.
Creation of two- and multilateral transactional relations
is mainly based on the use and formation of adequate institutions for regulating the relationship between an industrial enterprise and interested parties and, in particular, for regulating the exchange processes occurring within these relations. Thus, through the conclusion of labor contracts between the administration and the personnel of the enterprise, it is possible to provide for compensation in the form of bonuses to wages for the impact on the health of unfavorable working conditions, and thereby reduce or eliminate the uncertainty for the enterprise associated with the possibility of claims from workers for damages, inflicted on their health.
In a similar way, the institutions that regulate the relationship of the enterprise with its political and administrative external environment also function. An example is the licenses (permits) issued to an enterprise for pollution (within certain limits) of the natural environment. A similar role is played by EIA and environmental impact assessment of projects. The latter, including both state and public evaluation of the project and confirming the feasibility (from the economic, social and environmental aspects) of its implementation, also acts as a means of regulating relations between the investor and relevant stakeholders and managing the corresponding risks. The risk management tool in this sense is the certification of environmental management systems for their compliance with the requirements of ISO 14001 (GOST R ISO 14001) or EMAS.
Along with fairly well-established institutions that allow managing socio-environmental risks, there are quite a few
an accrued group of stakeholders with whom relations do not have such a degree of certainty (for example, various kinds of informal environmental organizations, local communities, etc.). In order to regulate relations with them, it is necessary to develop innovative institutions. In this case, we are talking about the formation of bilateral and multilateral transactional relations. Bilateral transactions encompass the contractual relationship between an industrial enterprise and its various stakeholders. At the same time, the design of contracts is determined by the enterprise and interested parties independently, without direct connection with formal institutions existing in society (environmental licenses, certificates, standards, etc.).
Due to the variety of ways to influence the environmental risks of an industrial enterprise, an analysis of their comparative effectiveness is required, the main methods of which are: the cost-benefit method (another name is cost-profit analysis) and the cost-effectiveness method (another name is efficiency analysis). costs). The cost-benefit method is based on comparing the benefits (results) expected from the implementation of activities with the costs of their implementation. The cost-effectiveness method is applied if a decision has been made on the expediency of achieving a specific goal in the field of environmental risk management. At the same time, the main task is to select such activities (scenarios) that ensure the achievement of the goal in the least costly way. An analysis of the environmental risks of an industrial enterprise and ways of influencing them contributes to the optimization of management decisions in this area.
JSC Gazprom Neft has a Risk Management Policy that defines the goals and principles of risk management to improve the reliability of the Company's operations in the short and long term.
The Company's goal in the field of risk management is to provide additional guarantees for Gazprom Neft to achieve its strategic goals through early warning / identification of risks and ensuring maximum efficiency of risk management measures.
The main goal of the risk management process at Gazprom Neft is to ensure continuity production process and stability of activities by preventing threats and limiting the degree of impact of external and internal negative factors on the Company's activities.
Risk management is an integral part of the internal environment of JSC Gazprom Neft, which includes:
- introduction of a risk-based approach to all aspects of production and management activities;
- conducting a systematic analysis of identified risks;
- building a risk control system and monitoring the effectiveness of risk management activities;
- understanding by all employees of the Company of the basic principles and approaches to risk management adopted by the Company;
- providing the necessary regulatory and methodological support;
- distribution of powers and responsibilities for risk management among the structural divisions of the Company.
Isur implementation - key stages
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The implementation of the Integrated Risk Management System of JSC Gazprom Neft began in August 2008 with the approval of the Concept for the Implementation of the IRMS by the Management Board |
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| 2008–2010 | 2011 | 2012–2013 (Goals) |
In 2 stages in June 2009 and March 2011 an analysis of the IRMS was carried out for compliance with best practices ( Ernst & Young). The risk management system is recognized as consistent with international practices for building ERM systems (Enterprise Risk Management). |
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The Company has developed and formalized a unified approach to the risk management process within the framework of the Integrated Risk Management System (IRMS) standard.
IRMS at JSC Gazprom Neft is a systematic continuous process of identifying, assessing and managing risks.
The key approach of the IRMS is the distribution of powers by management levels in the Company depending on the financial impact of the risk.
As of the end of 2011, the Company had implemented basic IRMS processes in most significant subsidiaries and affiliates, which made it possible to form a detailed Corporate Risk Map for 2011 by consolidating risk events from the level of individual SDCs to the level of the Company as a whole.
This approach made it possible to form areas of responsibility for risk management and risk monitoring at all levels of the Company's management and to ensure the development target plans responding to significant risks both in each SDC and for Gazprom Neft as a whole. The Company is continuously improving its approach to the basic IRMS processes, including special attention to improving the approach to risk assessment and integrating the risk management process into such key processes like business planning, project management, M&A.
Levels of financial impact of risk and distribution of powers within the IRMS
Schematic diagram of the IRMS process in the Gazprom Neft Group
* Depending on the criticality of the risks.
Industry risks
The main activities of Gazprom Neft are oil and gas production, oil refining, the sale of oil and oil products, therefore the Company is exposed to the risks traditionally inherent in the oil and gas industry, namely:
- risks associated with a possible change in prices for purchased raw materials, services;
- risks associated with possible changes in prices for oil and oil products;
- risks associated with industry competition;
- risks associated with geological exploration activities.
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Risk Descriptions |
Risk Management Measures |
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Risks associated with possible changes in prices for purchased raw materials, services |
In the course of its business activities, Gazprom Neft uses the infrastructure of monopoly providers of services for the transportation of oil and petroleum products and the supply of electricity. The Company has no control over the infrastructure of these monopoly suppliers and the amount of tariffs charged. It should be noted that the tariffs are regulated by the regulatory authorities of the Russian Federation, however, despite this, the tariffs increase annually, which leads to an increase in the Company's costs. |
The Company is taking a number of measures aimed at reducing the impact of such risks:
These measures make it possible to reduce the risks associated with the use of services and the purchase of goods from monopoly suppliers to an acceptable level and ensure continuity the Company's activities. |
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Risks associated with possible changes in prices for oil and oil products |
The financial performance of the Company is directly related to the level of prices for crude oil and petroleum products. The Company does not have the ability to fully control the prices of its products, which depend on fluctuations in the balance of supply and demand in the global and domestic markets for oil and petroleum products, as well as the actions of regulatory authorities. |
These measures make it possible to reduce risks to an acceptable level and ensure that the Company fulfills its obligations. |
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Risks associated with industry competition |
In the Russian oil and gas industry, there is intense competition between leading Russian oil and gas companies in the main areas of production and economic activity, including:
The implementation by the management of the portfolio of strategic projects aimed at the development of JSC Gazprom Neft in key areas of activity ensures the gradual strengthening of the Company's position in the competitive environment of the oil and gas industry, reducing the risks associated with industry competition. |
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Risks associated with geological exploration activities |
The key strategic objective of the Company is to increase the hydrocarbon resource base in quantitative and qualitative terms to ensure the required level of production, which in turn largely depends on the successful implementation of geological exploration activities. The main risk associated with exploration activities is the non-confirmation of the planned levels of hydrocarbon reserves. An important factor is the conduct of geological exploration in various geographic regions, including areas with adverse climatic conditions, which often leads to the risk of increasing costs. |
Gazprom Neft has significant experience in geological exploration and the use of the most modern geophysical methods for prospecting and exploration of hydrocarbons, as well as advanced technologies in the field of drilling and field development, which, as a result, leads to a decrease in the likelihood of such risks. |
Country and regional risks
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Risk Descriptions |
Risk Management Measures |
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|---|---|---|
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Political risks |
At present, the political situation in Russia is stable, which is characterized by the stability of the federal and regional branches of government. OJSC Gazprom Neft is registered as a taxpayer in St. Petersburg, which is the second largest city in the Russian Federation and the administrative center of the Northwestern Federal District, which has significant natural resource potential, a highly developed industry, and a dense transport network. Gazprom Neft's subsidiaries are represented in the Central, Northwestern, Urals, Volga, Siberian and Far Eastern federal districts. |
In general, the Company assesses the political situation in the country as stable and believes that no risks of negative changes are foreseen at the moment. |
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Risks associated with foreign assets |
The company is implementing a number of foreign projects aimed at expanding the geography of production activities. Entering new regions is associated both with the possibility of gaining additional competitive advantages and with the risks of underestimating the economic and political situation in the countries where the Company's assets are located, which may subsequently lead to failure to achieve planned performance indicators. |
Currently, Gazprom Neft assesses the level of risks associated with foreign assets as acceptable, but cannot guarantee the absence of negative changes, since the described risks are beyond the control of the Company. |
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Corruption risks |
As part of the Company's active entry into new international markets, the risks of anti-corruption laws of the United States and Great Britain being applied to it are increasing. |
Gazprom Neft is developing a program to manage corruption risks. The essence of the strategy is to act proactively and, as a result, to minimize the risks of liability for the lack of procedures to prevent bribery. As part of the program, it is planned to assess the place of corruption risk in the Company's risk management system, develop a local regulation, form a strategy for project communication support and employee training. |
Environmental risks
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Risk Descriptions |
Risk Management Measures |
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|---|---|---|
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Environmental risks |
Production activity Gazprom Neft is associated with a potential risk of environmental damage or pollution, which, as a result, may lead to civil liability and the need to carry out work to eliminate such damage. The Company is fully aware of its responsibility to society for creating safe working conditions and maintaining a favorable environment, constantly monitors its activities in order to ensure compliance with relevant environmental standards, implements programs for environmental protection. |
Gazprom Neft's environmental protection policy is aimed at ensuring compliance with the requirements of current environmental legislation by investing significant funds in environmental protection measures, including the use of technologies that ensure minimization of the negative impact on the environment. The result of such activities was a significant reduction in the likelihood of risks associated with environmental pollution. |
Financial risks
Financial risk management in the Company is carried out by employees in accordance with the areas of their professional activity.
The Financial Risk Management Committee defines a unified approach to managing financial risks in the Company and its subsidiaries. The activities of the employees of the Company and the Financial Risk Management Committee help to reduce potential financial damage and achieve the set goals.
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Risk Descriptions |
Risk Management Measures |
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|---|---|---|
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Credit risk |
The Company's management pays special attention to the credit risk management process. |
Gazprom Neft has implemented a number of measures to manage risk, including: assessing the creditworthiness of counterparties, setting individual limits depending on the financial condition of the counterparty, controlling advance payments, managing receivables by business area, etc. . |
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The risk associated with attracting credit |
Gazprom Neft effectively manages the risk associated with raising credit funds. |
Along with bank lending, the Company actively uses alternative sources of debt financing. In addition, the stable financial condition of the Company, confirmed by international rating agencies, makes it possible to freely attract the necessary credit resources from Russian and foreign banks. |
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Currency risk |
The main part of Gazprom Neft's gross revenue is formed by export operations for the sale of oil and oil products. Accordingly, fluctuations in exchange rates against the ruble have an impact on the result of the financial and economic activities of the Company. |
The Company's currency risk is significantly reduced due to the presence of liabilities denominated in foreign currencies. The Company attracts a significant part of its loans on the international credit market in dollars. The current obligations to service these loans are also denominated in dollars. The currency structure of revenue and liabilities acts as a hedging mechanism where multidirectional factors offset each other. A balanced structure of claims and liabilities in foreign currency minimizes the impact of currency risk factors on the result of the Company's financial and economic activities. |
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Interest risk |
As a large borrower, the Company is exposed to risks associated with changes in interest rates. The main source of borrowing is the international financial market. Most of the debt portfolio - credits and loans denominated in dollars. The interest rate for servicing a part of existing loans (the share is not fixed and may change) is based on interbank loan rates (LIBOR). An increase in these interest rates may increase the cost of servicing the Company's debt. An increase in the cost of loans for the Company may adversely affect solvency and liquidity indicators. |
Currently, the LIBOR rate has a slight upward trend, however, given the need to stimulate the growth of the global economy, the likelihood of significant growth (over 1%) is insignificant, which, given the structure of the current loan portfolio of JSC Gazprom Neft, suggests a low level of influence interest rate risk on the Company. |
Legal risks
Gazprom Neft builds its activities on strict compliance with the standards Russian legislation, as well as the laws of the jurisdictions in which Gazprom Neft operates.
The Company cannot guarantee that there will be no negative changes in Russian legislation in the long term, since most of the risk factors are beyond the control of the Company. Reducing the negative impact of this category of risks is achieved by monitoring and promptly responding to changes made to acts of various branches of legislation, as well as through active interaction with legislative and executive authorities and public organizations on issues of interpretation, correct application and improvement of legislative norms.
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Risk Descriptions |
Risk Management Measures |
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|---|---|---|
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Change Risks tax legislation |
Gazprom Neft is one of the largest taxpayers in the Russian Federation, paying federal, regional and local taxes, in particular value added tax, corporate income tax, mineral extraction tax, corporate property tax, and land tax. |
In the course of operating activities, the Company's specialists continuously monitor changes in tax legislation, changes in the practice of interpreting and applying the norms of the current tax legislation. The company acts as an expert in the process of improving the regulatory framework and developing new legal acts of tax legislation. |
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Risks associated with changes in the rules of customs control and duties |
The Company is a participant in foreign economic relations, as a result of which it is exposed to risks associated with changes in legislation in the field of state regulation of foreign trade activities, as well as customs legislation governing relations on establishing the procedure for moving goods across the customs border of the Russian Federation, establishing and applying customs regimes, establishing, introducing and collection of customs duties. As a risk, one can single out the possibility of the Government of the Russian Federation changing the rates of customs duties (both import and export) by individual goods, in respect of which Gazprom Neft enters into foreign trade transactions. The main negative consequence of the realization of this risk is an increase in costs and a decrease in export efficiency. |
JSC Gazprom Neft complies with the requirements of customs control, timely draws up all the documentation required for both export and import operations, and has sufficient financial and human resources to comply with the rules and regulations in the field of customs regulation. |
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Risks associated with changes in licensing requirements for core activities |
The development of modern subsoil legislation is based on the detailed regulation of the processes of subsoil use by the state, the need to increase the rational use of subsoil plots, and careful observance of legislative norms for environmental protection. |
Gazprom Neft operates in license areas subject to the stringent requirements of Russian subsoil legislation, ensuring that license agreements are updated to reflect changes in current legislation. The Company carries out work on the analysis and evaluation of legislative initiatives of interested ministries and departments in the field of subsoil legislation and licensing of certain types of activities. The proposed and discussed amendments to the current legislation, in general, will favorably affect the subsoil use regime and the implementation of licensed activities in the Russian Federation. Legal risks associated with the loss of the right to use subsoil plots or violation of the current legislation as a result of these changes are not seen directly for Gazprom Neft. |
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Risks associated with changes in judicial practice on issues related to the Company's activities |
In the current system of law enforcement in the Russian Federation, the legal positions of the Supreme Courts (the Constitutional Court of the Russian Federation, the Supreme Court of the Russian Federation, the Supreme Arbitration Court of the Russian Federation) are of great importance, which can affect the conditions for conducting business activities of the Company. |
Gazprom Neft regularly monitors decisions made by the highest courts, and also assesses trends in law enforcement practice that is emerging at the level of district arbitration courts, actively applying and using it not only in protecting its rights and legitimate interests in court, but also in resolving legal issues arising in the process of carrying out activities. In this regard, the risks associated with changes in judicial practice are assessed as insignificant. |
5.1 Root cause analysis of significant risks in OAO Gazprom based on the Ishikawa diagram
According to the previous calculation results, the number of significant risks in the activities of OAO Gazprom for the year 2013 under review included:
1. Price risk.
With regard to these significant risks for OAO Gazprom, it is necessary to carry out an analysis of cause-and-effect relationships based on the Ishikawa diagram. To identify the initial causes of their occurrence for subsequent work on the development of adequate measures of influence. Influences are carried out not on the risk, but on the causes and factors causing them.
Price risk belongs to the category of financial risks, therefore, among the basic sources of price risk occurrence, the following should be singled out:
1. Market (external and internal);
2. State;
3. Currency.
The main factors affecting the price risk in the Company's activities:
· economic and political developments in the oil-producing regions of the world;
· the current ratio of supply and demand, as well as the forecast of demand and supply of liquid fuel for the future;
· the ability of OPEC, as well as oil-producing countries that are not members of this organization, to regulate oil production in order to maintain the price level;
the military-political situation in the world;
· the state of the global general economic situation;
prices for alternative energy carriers;
The main goal of risk management in the Company is to ensure the continuity of the production process and the stability of activities by preventing threats and limiting the degree of impact of external and internal negative factors on the Company's activities.
Risk management is an integral part of OAO Gazprom's internal environment and includes:
· introduction of a risk-based approach to all aspects of production and management activities;
· conducting a systematic analysis of identified risks;
· building a risk control system and monitoring the effectiveness of risk management activities;
· understanding by all employees of the Company of the basic principles and approaches to risk management adopted by the Company;
• providing the necessary regulatory and methodological support;
· Distribution of powers and responsibilities for risk management among the structural units of the Company.
In the event of a decline in world prices for petroleum products, there will also be a (albeit smaller) decrease in prices for natural gas supplied by OAO Gazprom to European customers, which will lead to a reduction in the Company's export revenues.
In the markets of European countries, OAO Gazprom faces competition from suppliers of alternative types of energy carriers (liquid fuel, coal). In addition, there is competition from other natural gas suppliers, especially Norway, Algeria, and the Netherlands.
The Company's goal in the field of risk management is to provide additional guarantees for the Company's achievement of strategic goals through early warning and identification of risks and ensuring the maximum effectiveness of their management measures.
Price risks. The main activities of Gazprom are oil and gas production, oil refining, sales of oil and oil products, therefore the Company is exposed to the risks traditionally inherent in the oil and gas industry, namely such price risks as:
possible changes in prices for purchased raw materials, services;
· possible changes in oil and gas prices;
Risks associated with possible changes in gas prices in the domestic market.
Prices for natural gas supplied to Russian consumers and tariffs for its transportation services provided to independent organizations are regulated by the state. At the same time, they are significantly lower than the prices that apply to buyers in Western Europe, even taking into account export duties, customs duties and transport costs. OAO Gazprom is taking steps to improve the pricing system for gas supplied to the domestic market. Recently, it has been possible to change approaches to the formation of gas prices.
The Government of the Russian Federation has acknowledged that the current regulated prices for natural gas are below the economically justified level and should increase at a rate that exceeds the rate of inflation. According to the decision by 17%.
According to OAO Gazprom's proposals, the Energy Strategy of Russia for the period up to 2020 (approved by the Government of the Russian Federation in August 2003) provides for long-term predictive parameters for changes in gas prices.
OAO Gazprom's calculations show that the predicted dynamics of gas prices will not have a significant impact on other sectors of the economy.
If the Government of the Russian Federation continues the policy of gradually bringing gas prices in line with the actual costs of its production, transportation, storage and sale, as well as with the main quality parameters of gas compared to alternative fuels, this will allow eliminating gas price subsidies for industries which are its consumers, to attract, mainly at the expense of the Company's funds, the necessary financial resources for the development of new gas fields and further development of the gas transmission system.
The Ishikawa diagram in relation to the price risk in the activities of OAO Gazprom is as follows:
Posted on http://www.allbest.ru/
Rice. 5.1 Ishikawa chart of price risk for a company
1.1 Factors influencing changes in gas and oil prices in external domestic markets;
1.2 Factors affecting the change in prices for petroleum products in foreign and domestic markets;
1.3 Factors affecting the purchased raw materials;
1.4 Factors affecting purchased services;
2.1 Violation of the subsoil use regime;
2.2 Loss of rights to use licensed areas;
2.3 Violation of the current legislation on subsoil use;
2.4 Changes in the rules of customs control and duties;
2.5 Factors affecting the rate of export duty on oil;
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Russian market.
Over the past decade in Russia, the share of gas in energy consumption has increased in relation to other types of fuel. The share of gas in the country's fuel and energy balance has increased from 42% in 1990 to 50% at present. This is largely due to relatively low regulated gas prices. In Russia, gas is mainly supplied to power generating companies, metallurgical and chemical industry. According to OAO Gazprom estimates, the structure of gas supplies to the domestic market, including its own purchases from independent organizations, is characterized by the following data (according to the results of 2009):
16.75% - for the needs of the population,
38.86% - to power industry organizations,
32.03% - to other industrial consumers,
12.36% - household consumers.
Russia's energy strategy assumes a reduction in the share of gas in the fuel and energy balance due to its more rational use. At the same time, JSC "Gazprom" plans annual production in the amount of 650-670 billion cubic meters by 2020 (taking into account production in the East of Russia). At present OAO "Gazprom" occupies a dominant position in the domestic gas market and provides about 80% of supplies. In accordance with the Energy Strategy of Russia, in the long term, by 2020, OAO Gazprom will retain the main share in the volume of production and supply of gas to the Russian market.
Regulation of relations in the field of transportation and supply of gas to Russian market.
Relations between suppliers and buyers of gas are regulated by the Rules for the supply of gas in the Russian Federation, approved by Decree of the Government of the Russian Federation No. 162 dated February 5, 1998.
The buyers of gas for state needs, for household needs and the population, as well as buyers who have concluded gas supply contracts earlier and wish to extend their validity, have the priority right to conclude gas supply contracts.
Organizations whose activities are financed from the federal budget are required to enter into state contracts for gas supplies with suppliers. Such contracts are concluded in accordance with the procedure established by the Decree of the Government of the Russian Federation "On the Conclusion of State Contracts for the Supply of Gas to Organizations Financed from the Federal Budget" dated October 4, 2000 No. 753. account of the federal budget funds of organizations ensuring the security of the state" dated May 29, 2002 No. 364 establishes special conditions for the supply of gas and their payment, which are mandatory included in state contracts for the supply of gas concluded by state customers with gas suppliers, as well as in supply contracts gas, concluded by gas supply organizations, regardless of the organizational and legal form, with organizations financed from the federal budget, consuming fuel and energy resources, ensuring the security of the state. These conditions, in particular, provide that the state customer is obliged, when bringing the limits of budgetary obligations to subordinate organizations, to proceed from the need to ensure payment for the gas they consume in full. At the same time, the supplier is obliged not to allow the termination or restriction of gas supply below the limits of budgetary obligations brought by the customer to his subordinate organizations.
In order to improve state regulation of gas prices and develop market principles for pricing in the domestic gas market, on May 28, 2007, the Government of the Russian Federation adopted Decree No. for gas is carried out based on the gradual achievement of the level of equal profitability of gas supplies to the domestic and foreign markets and taking into account the cost of alternative fuels.
The resolution establishes that wholesale prices for gas produced by Gazprom and its affiliates at the exit from the main gas pipeline transport system are determined by agreement of the parties when concluding gas supply contracts (including long-term ones), including cases of its resale, in the range between the maximum and minimum levels of wholesale prices, taking into account the specifics determined by the federal executive body in the field of state regulation of prices (tariffs) for the following consumer groups (except for the population):
· end-users who have entered into gas supply contracts for the first time with the start of delivery after July 1, 2007;
· end-users purchasing gas in excess of the volumes fixed in gas supply contracts for 2007;
· end consumers who are supplied with gas in connection with the expansion of the Unified Gas Supply System.
In accordance with Decree of the Government of the Russian Federation No. 858 dated July 14, 1997, OAO Gazprom provides independent organizations with access to its gas transmission system. Such access is provided subject to the availability of free capacities in the gas transmission system, as well as on the condition that the quality and parameters of gas from independent organizations comply with the standards and specifications in force in the Gazprom gas transmission system, and that gas pipelines have been laid to consumers, and suppliers there are supply pipelines.
In accordance with the Federal Law "On Gas Supply in the Russian Federation", consumers are required to pay for gas supplies and gas transportation services, as well as the Supplier's supply and marketing services in accordance with the resolution of the Federal Tariff Service. If consumers do not make such payment, suppliers have the right to reduce or stop gas supplies to such consumers in accordance with the procedure established by the Decree of the Government of the Russian Federation "On the procedure for terminating or restricting the supply of electrical and thermal energy and gas to consumer organizations in case of non-payment for the supplied (used by them) ) fuel and energy resources" dated January 5, 1998 No. 1.
Gas supplies to Russian consumers.
The table below presents data on the sale of natural gas by OAO Gazprom (the parent company) to consumers in Russia for 2005-2009 and for 3 months of 2010 (1) :
(1) Due to differences in the methodology for preparing management reports and financial statements, the indicators of the volume of gas supplies to consumers calculated using these methods may not coincide. In this table, the methodology for preparing financial statements was used to calculate the indicators.
The sale of gas in the territory of the Russian Federation is mainly carried out by the subsidiary LLC Mezhregiongaz. At the same time, minor volumes of gas are sold directly by OAO Gazprom, as well as by gas producing and gas transport organizations.
The structure of gas supplies to consumers in the Russian Federation by Gazprom Group companies in 2009 and 3 months of 2010 was as follows:
In accordance with Decrees of the Government of the Russian Federation dated September 2, 2006 No. 534 "On conducting an experiment on the sale of gas on an electronic trading floor" and dated December 10, 2007 No. 851 "On the continuation of an experiment on the sale of gas on an electronic trading floor in 2008", OJSC Gazprom sold limited volumes of gas through the Mezhregiongaz LLC electronic trading platform along with gas from independent producers at prices not regulated by the state. From January 2008 to December 2008 inclusive, 6.09 billion cubic meters of gas were sold, of which 2.99 billion cubic meters - gas from independent producers and 3.10 billion cubic meters - gas from OJSC "Gazprom" and its affiliates.
As of January 1, 2009, gas trading at the ETP was terminated due to the absence of a relevant resolution of the Government of the Russian Federation. The next auction on the Electronic Trading Platform of Mezhregiongaz LLC will take place after the adoption of a new resolution of the Government of the Russian Federation "On the sale of gas using exchange technologies".
Gas supplies to the CIS and Baltic countries.
In 2009 and the 1st quarter of 2010 OAO Gazprom sold 65.624 and 16.343 billion cubic meters of natural gas in the territory of the CIS and Baltic countries, respectively.
The table below presents data on the volume of gas sales to the CIS and Baltic countries, as well as on sales at the border with Ukraine and the countries of the Caucasus in 2005-2009 and the first quarter of 20101) :
1) Due to differences in the methodology for preparing management reports and financial statements, indicators of the volumes of gas supplies (sales) to consumers calculated using these methods may not coincide. In this table, the methodology for preparing management reporting was used to calculate the indicators.
2) Operational data.
(3) Due to differences in the methodology for preparing management reports and financial statements, indicators of the volume of gas supplied to consumers, calculated according to these methods, may not coincide. To calculate the indicator, the methodology for preparing financial statements was used.
The main gas pipeline routes from gas fields in Western Siberia to the export markets of Western Europe pass through Ukraine, which, in turn, is the largest consumer of gas among the CIS and Baltic countries. Until 2006, gas supplies from Russia to Ukraine were carried out in payment for the transit of Russian natural gas through the territory of Ukraine in accordance with the Addenda to the Contract between NJSC Naftogaz Ukrainy and OAO Gazprom on the volumes and conditions for the transit of natural gas through the territory of Ukraine for the period from 2003 to 2013 dated June 21, 2002. These Addenda were signed on the basis of annual intergovernmental protocols to the Agreement between the Government of the Russian Federation and the Cabinet of Ministers of Ukraine on additional measures to ensure the transit of Russian natural gas through the territory of Ukraine dated October 4, 2001.
On October 2, 2008, Prime Minister of the Russian Federation V.V. Putin and Prime Minister of Ukraine Yu.V. Timoshenko signed a Memorandum in which they agreed to establish direct long-term relations between OAO Gazprom and NAK Naftogaz from January 1, 2009 Ukraine" and acknowledged that the effectiveness of the transition to direct relations is due to the repayment of accumulated debt, the timely payment of future supplies and the ability of Gazprom Group enterprises to supply natural gas to Ukrainian consumers. In addition, the said document confirms the intention of the Parties within three years to carry out a phased transition to market, economically justified and mutually agreed prices for imported natural gas for Ukrainian consumers and tariffs for gas transit through the territory of Ukraine. In January 2009 Gazprom and NJSC Naftogaz Ukrainy signed a direct long-term contract for the supply of gas to Ukrainian consumers.
OAO "Gazprom" is currently dependent on Ukraine in terms of gas transit sold in Western Europe. Payment for the transit of natural gas by JSC "Gazprom" through the territory of Ukraine is carried out in cash. At the same time, the construction of the Yamal-Europe and Blue Stream gas pipelines, as well as the implementation of the Nord Stream and South Stream projects, will reduce Gazprom's dependence on Ukraine in terms of gas transportation to Western Europe. At the same time, Ukraine itself, in terms of meeting its domestic gas needs, is dependent on OAO Gazprom, through whose gas transportation system transits the Central Asian gas it purchases.
On December 27, 2005 OAO "Gazprom" and OAO "Beltransgaz" signed a contract on the volumes and terms of natural gas supply to the Republic of Belarus and gas transit through the territory of the Republic of Belarus in 2006, which retains the terms of the 2005 contract. Since 2007 JSC "Gazprom" and JSC "Beltransgaz" signed a contract, which provides for the conditions for a gradual increase in prices to the market level. In 2007, the price of gas supplied to the Republic of Belarus was $100 per 1,000 cubic meters of gas. Since 2008, the price of gas supplied by JSC "Gazprom" to JSC "Beltransgaz" is calculated quarterly according to the formula, taking into account the indices of changes in prices for gas oil and fuel oil. In the 1st quarter of 2010, the contract price was 169.22 US dollars per 1,000 cubic meters.
In the first half of 2006, Russian natural gas was supplied to the Republic of Moldova at a price of USD 110 per 1,000 cubic meters. Starting from the second half of 2006 JSC "Moldovagaz" signed a contract for the supply of gas at a price of 160 US dollars per 1000 cubic meters. In 2007, the gas price was set at $170 per 1,000 cubic meters. In the future, a gradual increase in prices to the market level is envisaged. Since 2008, the price of gas supplied by JSC "Gazprom" to JSC "Moldovagaz" is set quarterly according to the formula, taking into account the indices of changes in prices for gas oil and fuel oil. In the 1st quarter of 2010, the estimated contract price was USD 227.26 per 1,000 cubic meters.
Complications in the economy of the Republic of Belarus in the context of the global crisis led to a decrease in the level of solvency of gas consumers. For gas delivered in January-June 2009, a debt to OAO "Gazprom" was formed in the amount of 285 million US dollars. In August 2009 JSC "Beltransgaz" began to partially repay the said debt. Full repayment of the debt was made on December 23, 2009.
In the first quarter of 2010, Beltransgaz's debt for gas supplied in January-March amounted to USD 137.49 million.
In the 1st quarter of 2010, due to non-payments by Transnistrian consumers, the receivables of the Republic of Moldova increased even more.
Non-payments of the named gas consumers lead to a shortfall in the receipt of funds by OAO Gazprom.
Since 2005, by agreement of the parties, OAO Gazprom has been carrying out a gradual, calculated for three years, increase in prices for natural gas exported to the Baltic countries in order to achieve profitability on deliveries by 2008 at the level of non-CIS countries. Since 2008, the price of gas for the Baltic buyers has been in line with the European level and is monthly calculated according to a formula depending on the average price of fuel oil and gas oil over 6-9 months. In the 1st quarter of 2010, the weighted average price was USD 318.2 per 1,000 cubic meters. All contractual obligations to pay for gas have been fulfilled, there are no receivables.
European market.
In 2009 and the first quarter of 2010 OAO Gazprom sold 140.65 and 39.40 billion cubic meters of natural gas to Europe, respectively.
OAO Gazprom sells natural gas to Europe mainly under long-term contracts, most of which contain, among other things, the following conditions:
The contract price, which is tied to the price change of competing energy carriers such as oil products and, in some cases, coal;
The possibility of revising the price of natural gas under the contract, as a rule, once every three years, if market conditions have changed significantly;
Conditions that prevent the unilateral termination of contracts, except in cases of prolonged force majeure;
The "take-or-pay" condition, according to which the buyer, who withdraws during the year less than the minimum annual volume of natural gas specified in the contract, partially pays for the untaken amount of goods. Subsequently, this quantity can be selected by the buyer with an appropriate surcharge after the withdrawal of the minimum annual volume stipulated by the contract in the relevant year of delivery.
To date, agreements have been reached to extend supply contracts with all major buyers of natural gas in the European market.
In 2009, E.ON Ruhrgas approached OOO Gazprom Export with a request to reduce the contract price and/or change some other contract terms. The claims were due to significant market changes, among other things, a decrease in demand for gas due to the global economic crisis and an increase in supply, incl. on liquid trading floors, as well as a significant gap in prices linked to petroleum products under long-term contracts and on spot markets.
As a result of the negotiations, it was decided to provide for measures that would ensure the competitiveness of Russian gas in the current conditions. In particular, a link to spot prices was introduced for a certain proportion of the delivered volumes with a change in the selection conditions (100% daily take-or-pay obligations). At the same time, however, a compensatory mechanism is provided, which ensures, in case of non-selection of minimum contract quantities under "oil" contracts, recalculation of the corresponding part of the volumes from spot prices to oil-pegged prices.
Similar agreements have been reached with the companies WIEH and WINGAS.
On June 18, 2009, a contract was signed with EGL for the supply of gas to Italy from October 1, 2009 for a period of 20 years with an annual supply of 684 million cubic meters during the first 13 years of supply and 184 million cubic meters. m in subsequent years. On July 3, 2009, a contract was signed with ERG for the supply of gas to Italy from October 1, 2009 for a period of 10 years (with an option to extend for the next 10 years) with an annual supply of 123 million cubic meters. On August 7, 2009, a contract was signed with Synergy Italiane for the supply of gas to Italy from October 1, 2009 for a period of 10 years with annual volumes of 900 million cubic meters in 2009, from 2010 to 2011. 985 million cubic meters, since 2012 362 million cubic meters On September 24, 2009, a long-term contract was signed for the supply of natural gas to Italy by Premium Gas (formerly the company was called A2A Beta) from October 1, 2009 for a period of 13 years (with an option to extend for the next 5 years) from annual supply volume of 1 billion cubic meters, which from October 1, 2010 provides for an increase in gas supplies in the amount of 500 million cubic meters per year.
In November 2008, the "Basic Agreements" were signed with the Slovak Gas Industry (SPP) and Eurostream (Slovakia) companies, which provide for the supply and transportation of natural gas to the Slovak Republic until 2028 inclusive. The volume of supply is 6.5 billion cubic meters per year, the maximum volume of transit in the direction of Baumgarten is 51.7 billion cubic meters per year, and in the direction of Lanzhgot (presumably until 2011-2013, depending on the commissioning gas pipeline "Nord Stream") - 17.7 billion cubic meters per year. The volume of transportation for the entire period of the contract will be more than 1 trillion cubic meters. In accordance with the "Basic Conditions of the Contract for Access to the Transport Network and Gas Transportation", the tariff will be applied lower than under the contract for gas transportation through the territory of Slovakia dated April 29, 1997, which ended on December 31, 2008, and also lower and in comparison with officially published gas transportation tariffs in Slovakia. With regard to gas supplies to the Slovak Republic, an agreement was reached to increase the price.
In February 2009 Gazprom Export signed a long-term contract with Shell Energy Europe B.V. for the supply of gas, starting from October 2010, up to 1.2 billion cubic meters per year (total volume of 22 billion cubic meters).
In addition to the previously signed agreement on the supply of 1 billion cubic meters per year to DONG for a twenty-year period through the Nord Stream gas pipeline, an agreement was reached, recorded in the relevant documents, to increase the volume of deliveries to 2 billion cubic meters per year.
Western Europe.
In 2009 and the first quarter of 2010 OAO Gazprom sold 104.11 and 28.0 billion cubic meters of natural gas to Western Europe, respectively.
The table below shows data on natural gas sales to Western European countries for 2005-2009 and for 3 months of 2010 (1) :
(1) Due to differences in the methodology for preparing management reports and financial statements, the indicators of the volume of gas supplies to consumers calculated using these methods may not coincide. In this table, for the calculation of indicators, the methodology for preparing management reports of LLC Gazprom Export was used.
(2) Included among Western European countries for the purposes of this table.
(3) Operational data.
OAO Gazprom has been supplying gas to Western Europe since the late 1960s, which has allowed the Company to gain considerable commercial experience in the region. Through its subsidiary OOO Gazprom Export, OAO Gazprom supplies gas to Western European countries mainly on the basis of long-term contracts, which typically last 20 years or more. The current long-term contracts with major buyers in Western Europe will remain in place for another 4 to 30 years.
The main partners of OAO Gazprom in Western Europe are: in Germany, E.ON Ruhrgas and joint ventures with BASF concern WIEKH (Gazprom Group share 50%) and WINGAS (Gazprom Group share 49.98%), and also "ENI" (Italy), "GDF-SUEZ" (France) and "Botash". For gas sold in Western Europe, OAO Gazprom is paid in US dollars or euros and, to a lesser extent, in British pounds sterling.
One of the fastest growing export markets in the region is Turkey. Gazprom currently exports natural gas to Turkey via the Trans-Balkan gas pipeline through the territories of Ukraine, Romania and Bulgaria, as well as via the Blue Stream gas pipeline under the Black Sea, which directly connects Russia with Turkey.
Central Europe.
OAO "Gazprom" occupies a leading position in the gas markets of the countries of Central Europe, which is due to the prevailing historical, economic, geographical and political factors.
In 2009 and the first quarter of 2010 OAO Gazprom sold 36.54 and 11.4 billion cubic meters of natural gas to Central Europe, respectively. For gas sold in Central Europe, JSC "Gazprom" receives payment in US dollars.
The table below shows data on natural gas sales to Central European countries for 2005-2009 and for 3 months of 2010 (1) :
(1) Due to differences in the methodology for preparing management reports and financial statements, indicators of the volume of gas supplied (sales) to consumers calculated using these methods may not coincide. In this table, for the calculation of indicators, the methodology for preparing management reports of LLC Gazprom Export was used.
Negative factors
Negative factors that may affect the sale of OAO Gazprom's products are political risks associated with relationships with the Government and local authorities; economic risks associated with price fluctuations; competitive, related to competition from alternative fuels and competition in Europe with other gas suppliers; risks associated with operation (production and transportation of gas), as well as other risks.
A more detailed description of the impact of negative factors on the sale of OAO Gazprom's products and possible response actions of OAO Gazprom is presented in Section 2.5. "Risks associated with the acquisition of equity securities to be placed" of this Quarterly Report.
Investment risks
Currently, in order to ensure the sustainable development of OAO Gazprom and improve the quality of decision-making, the Company is working to create a risk management system. The main tasks for the formation of the risk management system are set out in the Action Plan for the development of the corporate system for managing the main risks of OAO Gazprom.
OAO Gazprom's risk management within the framework of a unified corporate system is defined as a continuous cyclic process of making and implementing management decisions, consisting of identifying, assessing and measuring risks, responding to risks, monitoring efficiency, planning management and monitoring risks, built into general process management of the Company, aimed at optimizing the magnitude of risks in accordance with the interests of OAO "Gazprom" and extending to all areas of its practical activities.
Industry risks
A high degree of government regulation of the industry.
JSC "Gazprom" is the largest gas producing company, transports and supplies natural gas to about 80% of Russian consumers, occupies a leading position in the Russian economy. OAO Gazprom's activities related to the transportation of gas through pipelines, in accordance with the Federal Law of the Russian Federation "On Natural Monopolies", are regulated as activities of natural monopolies.
By virtue of the ownership of a controlling stake, the state influences the activities of the Company. Thus, the state exercises control over the movement of financial flows of JSC "Gazprom" through the participation of its representatives in the Company's Board of Directors, whose competence includes the approval of the financial plan and investment program.
In addition, the Federal Tariff Service regulates wholesale prices for gas supplied to Russian consumers, tariffs for gas transportation services through the main gas pipelines of OAO Gazprom provided to independent organizations, tariffs for gas transportation services through gas distribution networks, as well as fees for supply and marketing services rendered to end consumers of gas.
The Russian Federation includes 83 subjects of the Russian Federation. Some of them have significant powers in terms of self-government by virtue of treaties with federal authorities. Despite the fact that in order to achieve uniformity in the regulation of natural gas supplies throughout Russia, the federal authorities have taken it upon themselves to develop and implement state policy regarding natural gas supplies, as well as the industrial and environmental safety of such supplies within Russia, regional and local authorities have a significant degree of autonomy in exercising their rights in relation to the use of land and natural resources (including natural gas). The lack of unity in the decisions of federal, regional and local authorities on gas supply issues may have a significant impact on the conditions of the Company's activities in certain regions.
JSC "Gazprom" reduces this risk through active work with the regions of the Russian Federation, the conclusion of cooperation agreements with local administrations.
Risks associated with the directive setting of gas prices in the domestic market.
So far, regulated wholesale gas prices have not reached an economically justified level that fully takes into account consumer properties, as well as technological and environmental advantages of gas, which ultimately contributes to the formation of an irrational ratio of gas prices to prices for alternative fuels. Between 2000 and 2008, regulated prices did not reach a level that would ensure break-even sales of gas on the domestic market.
From the end of 1996 to November 1999, there was no increase in regulated natural gas prices. Since 2000, Government decisions to increase regulated gas prices have been taken annually, and since 2002 the rate of price growth has exceeded the rate of inflation.
Parameters of changes in regulated wholesale gas prices for industrial consumers and households:
2 Average annual increase in gas prices. In 2009, gas prices changed from 01/01/2009 by 5%, from 04/01/2009 by 7%, from 07/01/2009 by 7%, from 10/01/2009 by 6.2%.
3 Average annual increase in gas prices. In 2010, it is planned to change gas prices for the population from 01.01.2010 by 5%, from 01.04.2010 by 15%.
The scenario conditions for the functioning of the economy of the Russian Federation and the main macroeconomic parameters of the forecast of the socio-economic development of the Russian Federation for 2010 and the planned period of 2011 and 2012, approved by the Government of Russia, provide for the following maximum gas price increases in 2011-2012:
1 The maximum size of the average annual increase in wholesale gas prices upon the transition to the use of a market price formula for all categories of consumers (except for the population), which provides for the principle of equal profitability of gas supplies to the external and internal markets (to be clarified).
In order to mitigate the risks associated with the directive setting of low gas prices, OAO Gazprom continues to conduct an active dialogue with federal executive authorities on improving the government's pricing policy and switching from wholesale gas price regulation to regulation of service tariffs in 2011 for its transportation through main pipelines, which are classified as natural monopoly activities, using the gas price formula independently determined by OAO Gazprom and the regulated gas transmission component. The implementation of this proposal will significantly expand the gas market and create real conditions for the most complete consideration of the ratio of supply and demand for it in gas prices, as well as an objective accounting of it. consumer properties.
Risks associated with possible changes in gas prices in the European market.
OAO Gazprom sells a significant part of the produced natural gas in Western and Central Europe, which is the Company's main source of foreign exchange earnings and stable cash flows. For more than 40 years, Gazprom and its predecessors have been exporting natural gas to European countries mainly under long-term contracts at prices that are mainly indexed in accordance with changes in world prices for competing petroleum products.
It should be noted that there is no single generally accepted gas price formula in Europe, since there is no single gas market. The specific equations used to determine the cost of gas in each individual contract are classified commercial information. Pricing is based on linking the gas price with the price of alternative energy carriers - usually a "basket of petroleum products": gas oil and fuel oil with different weights that reflect the specifics of the national gas consumption pattern. Other alternative types of energy carriers may also appear in the price formula: oil, coal, electricity, etc. Alternative types of energy carriers, as a rule, are commodities, which makes it possible to indirectly determine the price of gas.
Due to the specifics of pricing in the European gas market, which is expressed, in particular, in the presence of a reference period (usually 9 months) in the gas price indexation formula, the dynamics of export prices for natural gas lags behind changes in liquid fuel prices. These prices may fluctuate significantly under the influence of a number of factors beyond Gazprom's control.
These factors include:
Economic and political events in the oil-producing regions of the world, primarily in the Near and Middle East;
The current ratio of supply and demand, as well as the forecast of demand and supply of liquid fuels for the future;
The ability of OPEC, as well as oil-producing countries that are not members of this organization, to regulate oil production in order to maintain price levels;
Activity of exchange speculators ("raw material" bubble);
The military-political situation in the world, including the threat of terrorist acts;
The state of the global general economic situation;
Prices for alternative energy carriers;
Development of new equipment and technology;
Weather;
Requirements to reduce greenhouse gas emissions.
In the markets of European countries OAO "Gazprom" is faced not only with inter-fuel competition. There is intense competition from traditional pipeline natural gas suppliers, especially from Norway, Algeria, and the Netherlands. The Company's competitors are also LNG producers, primarily Qatar and Nigeria.
Risks associated with the liberalization of the European gas market.
The European natural gas market is undergoing significant structural changes aimed at developing competition. In 1998, the European Union Gas Directive 98/30/EC was approved, which was replaced by the Second Gas Directive 2003/55/EC as of 1 July 2004 (adopted in June 2003). Both the First and Second Directives were aimed at liberalizing the EU gas market by increasing third party access to gas transmission and distribution infrastructure and setting published tariffs for third party use of gas transmission networks (managed access), as well as greater cost transparency by separating production accounting , transportation, sales (marketing) and storage of gas. On July 13, 2009, the EU adopted a package of new legislative measures on energy, providing for further liberalization of the EU energy market (the "Third Energy Package"), including Directive 2009/73/EC, replacing the Second Directive (Third Directive).
The third energy package provides for the separation of generating capacities (extracting - in the case of natural gas and generating - for electricity) from transport networks - gas pipelines or high-voltage power lines. The requirements for property and legal separation apply not only to European companies, but also to foreign energy concerns operating in the EU market, including OAO Gazprom. After a long discussion, the Third Directive reflected three types of vertical disintegration. The first and most radical version of vertical disintegration denies the possibility of any ownership of power lines and main gas pipelines by energy and natural gas producers and obliges them to sell their transport network assets to an independent company. The second, more compromise option, allows the mining/generating company to retain ownership of pipelines/high-voltage transmission lines, but excludes any participation in the management of transport networks, which is transferred to independent system operators. Finally, the third, "soft" variant of decoupling does not exclude the ownership and participation of the gas supplier in the management of networks, albeit on a limited range of issues and under stricter control by the national regulator in order to prevent any of its attempts to limit competition. The regulation of pipeline ownership issues by third-party companies will most likely be transferred to the competence of the national regulator of the EU country, which, when opening access to gas transmission networks, should take into account the principle of the need to ensure the reliability of energy supplies to the EU. The choice of the vertical disintegration option is determined by the national legislation of the Member State. The EU states are obliged to implement the provisions of the Third Directive by 2011.
In the event of the most unfavorable development of the situation (i.e., when the EU Member States implement the most radical version of vertical disintegration - property and legal separation), the gas transmission infrastructure owned by the vertically integrated company OAO Gazprom will be alienated. The conditions for alienation will be provided for in the national legislation of the respective state. The protection of OAO Gazprom's investments in the gas transmission network is ensured within the framework of international public law, in particular, by the continuing Partnership and Cooperation Agreement between Russia and the EU, as well as bilateral agreements on the promotion and mutual protection of investments, signed by Russia with almost all member countries EU.
Russia has signed and applied on an interim basis for a long time the ECT, which establishes the legal basis for international cooperation on energy issues. This Treaty, however, was not ratified by the State Duma. The mechanism for resolving transit disputes provided for by the ECT proved to be ineffective during the Russian-Ukrainian "gas crisis" in January 2009. In particular, it was not used by any of the ECT contracting states to resolve the situation. On August 20, 2009, Russia announced the termination of the provisional application of the ECT in accordance with Art. 45(3)(a) ECT. Thus, the provisional application of the ECT has been terminated for Russia since October 20, 2009.
The implementation of the provisions of the European Union gas directives objectively contributes to the development of the market for spot, exchange trading in gas. In cases where spot market prices, determined by the ratio of supply and demand, turn out to be lower than prices for gas supplied under long-term contracts, gas withdrawals under these contracts may decrease. However, in cases where it is economically feasible, JSC "Gazprom" carries out "spot" operations through its subsidiaries, using emerging opportunities to sell additional volumes of gas or price arbitrage. It should also be emphasized that the European Union has officially recognized, in Directive 2004/67/EC on measures to ensure the security of natural gas supplies, the importance of long-term contracts for the gas supply of EU member states.
Another important aspect of the liberalization of the European gas market is to ensure the energy security of the gas importing countries, which consists in stimulating the efficient use of energy, the use of alternative energy sources, as well as reducing dependence on energy imports from a single source. The Company recognizes the existence of this risk, however, it is currently assessed as insignificant due to a significant decrease in the forecast levels of own production in Western Europe against the backdrop of growing demand for natural gas.
Risks associated with the reorganization of OAO Gazprom.
The vertically integrated structure of OAO "Gazprom" makes it possible to ensure guaranteed gas supply to Russian consumers and Russian gas supplies for export in accordance with intergovernmental agreements and concluded long-term contracts. Violation of the integrity of JSC "Gazprom" and the creation on its basis of independent production, transport and other companies will lead to the destruction of a single technological chain, weaken the manageability of the gas industry, create uncertainty in the distribution of responsibility for gas supplies to socially sensitive sectors of gas consumption. Moreover, this division is associated with big amount risks not only for the Company itself, but also for Russia as a whole, the main of which are: the risk of the state losing control over a strategic industry, foreign policy risks, the risk of an increase in man-made disasters and, as a result, a threat to Russia's energy security.
For the sustainable functioning of the Russian gas industry, OAO Gazprom seeks in the long term to maintain the Company as a vertically integrated company that ensures the reliable operation of the Unified Gas Supply System, including gas production, transportation, storage and supply.
Risks associated with technological innovation in the industry.
One of the factors that largely determines the competitive positions of companies operating in the global oil and gas market is the factor of using technical and technological innovations.
The use of new technologies allows oil and gas companies to receive additional competitive advantages by increasing the efficiency of exploration and development of hydrocarbon reserves, increasing the duration of field operation and the volume of recoverable explored reserves, significantly reducing the negative impact on the environment while reducing the costs of the full project cycle.
Gazprom's business prospects are related to the implementation of projects in regions with complex and specific natural-climatic and mining-geological conditions, in connection with this, the need for unique equipment created specifically for these projects will also increase.
In order to provide the Company with new equipment of the required quality and in the required volumes, OAO Gazprom constantly carries out activities in the field of R&D to create highly efficient gas technologies, new equipment and materials. The Company has developed a managerial and financial mechanism for implementing a full innovation cycle and bringing Gazprom's scientific and technical developments to the stage of serial production.
Risks associated with the development of gas production from unconventional sources
Rising prices for natural gas and scientific and technological progress in recent decades have led to an increase in interest in the development of unconventional natural gas resources. In North America, the share of gas production from unconventional sources is expected to continue to grow in the long term. This leads to a decrease in LNG imports to the United States and the redirection of released volumes by LNG suppliers to the markets of Europe and Northeast Asia and, as a result, to increased competition in these markets.
Unconventional natural gas resources (tight gas, coal bed methane, shale gas, etc.) are much poorer in terms of reserves than traditional gas accumulations, have a lower density, and their production requires constant stimulation and other advanced technologies. Unconventional gas production can be economically justified if a number of conditions are met, the main of which are consistently high gas prices on the world market and significant annual investments to maintain production.
In the medium term, the production and supply of Russian natural gas in the traditional markets of OAO Gazprom will remain economically competitive.
In order to maintain the economic competitiveness of the production and supply of natural gas produced by conventional methods, OAO Gazprom:
Controls the investment and operating costs of production;
improves and introduces new technologies that increase the efficiency of conventional gas production;
Russia also has large unconventional gas resources, and OAO Gazprom is developing technologies to develop them.
Regional risks
In the event of one or more of the risks listed below, OAO Gazprom will take all possible measures to minimize negative consequences. In order to neutralize part of the risks, the Issuer has taken a number of protection measures, to a greater extent related to the implementation production program the Issuer, and possible measures have been developed for the Issuer's actions in the event of a particular risk. However, it should be noted that the preliminary development of measures adequate to the corresponding events is hampered by the uncertainty of the development of the situation, and the parameters of the measures taken will depend to a greater extent on the specifics of the situation in each particular case. OAO "Gazprom" cannot guarantee that actions aimed at overcoming the negative changes that have arisen will lead to improvement of the situation, since the described factors are beyond the control of OAO "Gazprom".
Political and economic risks.
In accordance with changes in the political and economic environment, and in order to improve the banking, judicial, tax, administrative and legislative systems, the Government of the Russian Federation is implementing a series of consistent reforms aimed at stabilizing the modern Russian economy and integrating it into the world system. During the process of reforming the business and legal infrastructure, risks remain such as the inconvertibility of the national currency abroad, low liquidity in the long-term lending and investment markets, as well as higher inflation than developed countries.
Risks associated with the process of globalization.
The globalization of economic activity is one of the main trends in the development of the modern world. The consequences of globalization are reflected in the economic development of almost all countries of the world, including Russia, which is on the path of active integration into world economy.
The factors of globalization, which include the formation of a single energy space, the strengthening of international cooperation, the development of global vertically integrated companies, the creation of consortiums for the implementation of large investment projects, lead to increased competition, strengthening the competitive positions of individual companies and increasing dependence of partners due to the need to implement joint projects.
In the era of globalization, the high interdependence of markets leads to the synchronization of different economies, and, as a result, to the possibility of a rapid transfer of recessions or crises from the economy of one country to another. Under such conditions, the market risks of OAO "Gazprom" may increase.
Risks associated with the development of crisis phenomena in the global economy
After a period of deep global recession, there remains high uncertainty about how and at what pace the global economic recovery will proceed.
Unfavorable economic conditions may have a negative impact on the Group's operations.
OAO Gazprom is implementing the Comprehensive Action Plan for the company's financial strategy. In the opinion of Gazprom's management, the developed comprehensive plan will make it possible to adequately respond to a possible worsening of the situation. At the same time, given the high uncertainty regarding the further development of crisis phenomena in the global economy, there are no absolute guarantees that the implementation of this strategy will achieve the desired results.
Risks associated with entering new regions and new markets.
One of the main principles of building the strategy of the Gazprom Group is diversification and expansion of activities - new markets, new transport routes, new products. At present, the Gazprom group of companies' product portfolio includes natural gas, oil, oil products, petrochemicals, and liquefied natural gas. The Company is preparing to enter new export markets - the USA, China, Japan, and South Korea. In 2007, the Gazprom Group entered the Sakhalin-2 project as a majority shareholder through the purchase of 50% and one share of the project operator Sakhalin Energy Investment Company Ltd.. As part of the Project, the Piltun-Astokhskoye oil and Lunskoye gas fields are being developed. The project is focused on the supply of liquefied natural gas to the countries of the Asia-Pacific Region - the most dynamically developing energy market, as well as to the west coast of North America. Entering new markets is associated both with the possibility of obtaining additional benefits and with the risks of underestimating the economic and political situation in the countries of the region.
So, for example, Gazprom is interested in entering the US natural gas market, the level of demand for which is almost a quarter of the global figure. According to OAO Gazprom, when entering the US market, the Company may face risks associated with insufficient experience in operating in market segment liquefied natural gas from the United States and high competition from suppliers of this type of fuel operating in this market, as well as a possible reduction in demand for imported gas as a result of an increase in domestic gas production from unconventional sources. If OAO Gazprom enters the US market in order to participate in other elements of the value chain, there may be additional risks associated with the implementation of investment projects due to the high degree of gas market liberalization characteristic of the US.
Risks associated with the transit of natural gas.
JSC "Gazprom" is under the influence of the risks associated with the transportation of natural gas through the territory of transit countries. The absence of a stable political and social environment in such countries can lead to violations contractual relations on transit and failures in the supply of natural gas under the export contracts of JSC "Gazprom". Thus, cases were noted when a part of Gazprom's natural gas was misdirected during transportation through the territory of Ukraine, despite its interest in the stability of natural gas transit for Ukrainian consumers through the territory of the Russian Federation.
JSC "Gazprom" is taking measures to minimize the risks associated with the transit of natural gas through the territory of Ukraine. Thus, in January 2009, Naftogaz Ukrainy and OAO Gazprom signed long-term (11 years) contracts in the field of gas transit and supply. Contracts operate independently of each other. This creates additional guarantees that the situation with the termination of gas transit through Ukraine to European consumers, which developed in early January 2009, will not happen again.
In addition, in order to compensate for this risk, OAO Gazprom is diversifying export routes for gas supplies. An example of such work is the Yamal-Europe project, which passes through the territory of Belarus and Poland. The Belarusian section of the gas pipeline is owned by OAO Gazprom, and the Polish section is owned by Europol Gaz (a joint venture between OAO Gazprom, the Polish national company PGNiG S.A. and the Polish Joint Stock Company Gaz-Trading). In order to reduce the risks associated with the transit of natural gas, in December 2006, a five-year contract was signed for the supply and transit of gas through the territory of Belarus in 2007-2011.
JSC "Gazprom" is carrying out work on the implementation of the construction project of the gas pipeline "Nord Stream", a fundamentally new route for the export of Russian natural gas to Western Europe. This is one of the priority long-term projects of the Company, which will improve reliability and increase the volume of Russian natural gas exports. The gas pipeline will run directly from Russia (Vyborg region) to Germany through the Baltic Sea, bypassing third countries.
It is planned to build two pipelines. The design capacity of Nord Stream will be about 55 billion cubic meters. m of gas per year. The length of the route is more than 1200 km.
As part of the strategy of diversifying Russian natural gas supplies, OAO Gazprom, along with the implementation of the Nord Stream project, is developing the South Stream gas pipeline.
The South Stream project involves the construction of a gas transmission system from Russia through the Black Sea to the coast of Bulgaria and further through the territories of the countries of Southern and Central Europe. The capacity of the designed system can be up to 63 billion cubic meters. m of gas per year. The total length of the Black Sea part of the gas pipeline will be about 900 km.
At present JSC "Gazprom" is studying possible options for the route of the gas pipeline. The choice of the final version of the implementation of this project will be carried out based on the criteria of its technical feasibility and economic feasibility, as well as on the basis of minimizing associated risks.
(More detailed information about OAO Gazprom's projects is presented in clause 3.3 of the Issuer's Future Activity Plans)
Risks associated with non-monetary settlements.
OAO Gazprom's activities may be adversely affected by the limited ability of individual consumers in Russia and abroad to pay for natural gas supplied by OAO Gazprom in cash. In the past, due to the difficult economic situation, in working with many Russian companies OAO Gazprom was forced to use various forms of non-cash payments, including promissory notes and bonds, stakes in the capital of gas companies, as well as goods and services, in order to pay for gas supplies to consumers. To date, the debt of a part of Russian consumers and consumers of the countries of the former USSR for natural gas supplied in the past has not been fully repaid, and the Company does not have guarantees for the full payment of this debt in cash.
In recent years, the situation with payment for natural gas supplies has gradually stabilized. As of the date of the end of the 1st quarter of 2010, the share of cash payments in the proceeds from consumers in Russia amounted to 99.8%. Consumers in the Baltic republics and CIS countries paid for the supplied natural gas in cash.
Of the consumers of gas from the near abroad, in violation of contractual obligations, JSC Moldovagaz and JSC Beltransgaz pay. Nevertheless, it is impossible to guarantee that in the future, due to reasons beyond Gazprom's control, non-monetary forms of payment for gas will not appear.
Thus, non-cash settlement of transactions has in the past and may in the future adversely affect OAO Gazprom's ability to finance operating or capital expenditures that must be made in cash, as well as OAO Gazprom's ability to pay taxes and make other obligatory deductions.
Risks associated with geographical and climatic conditions.
A significant share of OAO Gazprom's gas production falls on Western Siberia, where the harsh climate complicates production and increases the cost of natural gas. Significant geographic remoteness of the developed West Siberian fields from the main regions for the sale of products requires significant costs for gas transportation.
The Urengoyskoye, Yamburgskoye and Medvezhye fields in the Nadym-Pur-Tazovsky region of Western Siberia, which historically provide the main production volume of the Gazprom group of companies, are in the stage of declining production. The natural decline in gas production at these fields in the coming years is planned to be compensated by bringing the Yuzhno-Russkoye field and the Kharvutinskaya area of the Yamburgskoye field to design capacity, increasing production from the Cenomanian deposits of the Zapolyarnoye field, as well as by developing new fields in the Nadym-Pur-Tazovsky district - Nydinskaya area, Zapadno-Pestsovaya area, Lower Cretaceous deposits of the Zapolyarnoye and Pestsovoye fields, Achimov deposits of the Urengoyskoye field, Muravlenkovskoye field. Since 2012, it is planned to put into operation the fields of the Yamal Peninsula and other gas production facilities.
The climatic conditions of the Yamal Peninsula are more severe than in the main production region of OAO Gazprom, and the Yamal fields are even further removed from the main consumers. JSC "Gazprom" plans to introduce progressive technical, technological and organizational solutions to reduce the cost of developing the Yamal Peninsula and the cost of production and transportation of gas.
Financial risks
In the event of one or more of the risks listed below, OAO Gazprom will take all possible measures to minimize negative consequences. To neutralize part of the risks, the Issuer has taken a number of protection measures, to a greater extent related to the implementation of the Issuer's production program, and developed possible measures for the Issuer's actions in the event of a particular risk. However, it should be noted that the preliminary development of measures adequate to the corresponding events is hampered by the uncertainty of the development of the situation, and the parameters of the measures taken will depend to a greater extent on the specifics of the situation in each particular case. OAO "Gazprom" cannot guarantee that actions aimed at overcoming the negative changes that have arisen will lead to improvement of the situation, since the described factors are beyond the control of OAO "Gazprom".
Risks related to monetary policy Central Bank Russian Federation.
The Central Bank of the Russian Federation, pursuing a monetary policy with the help of various instruments at its disposal, has an impact on financial markets and the money supply, which indirectly affects the performance of economic entities.
In the context of the crisis in the global financial markets, the Bank of Russia used a strategy of controlled devaluation of the national currency as an operational tool for maintaining macroeconomic stability. Thus, against the backdrop of falling oil prices and a sharp deterioration in Russia's trade balance, since November 2008, the Bank of Russia has been implementing the practice of gradually widening the range of fluctuations of the ruble exchange rate to the dual-currency basket, which includes the US dollar and the euro.
During 2009, the situation in the domestic foreign exchange market changed significantly under the influence of external factors. The exchange rate policy of the Bank of Russia under these conditions was aimed at ensuring the stability of the national financial system and smoothing out the impact of the effects of the global financial crisis on the Russian economy.
According to the Main Directions of the Unified State Monetary Policy for 2010 and 2011-2012 approved by the Bank of Russia, the exchange rate policy of the Bank of Russia in 2010-2012 will be aimed at smoothing significant fluctuations in the ruble exchange rate against the basket of major world currencies. During this period, the Bank of Russia sees as its task the creation of conditions for the implementation of a monetary policy model based on inflation targeting, while gradually reducing direct intervention in exchange rate formation processes. At the same time, the parameters of exchange rate formation during the transition to a new model of monetary policy will be determined taking into account the tasks of curbing inflation and providing conditions for diversifying the economy.
In the medium term, the system of monetary policy instruments of the Bank of Russia will be focused on creating necessary conditions to implement an effective interest rate policy.
As inflation rates and inflationary expectations decrease, the Bank of Russia intends to continue its policy of lowering the refinancing rate and interest rates on liquidity provision and absorption operations. Further steps by the Bank of Russia to reduce (change) interest rates will be determined by the development of inflationary trends, the dynamics of production and lending activity, and the state of financial markets.
Any actions taken by the Central Bank of the Russian Federation may both reduce and increase the risks of the Company, which will accordingly affect its financial indicators.
The risk of a global financial crisis
High uncertainty regarding the pace of the global economic recovery keeps the possibility of the Company's financial risks arising. The persistence or worsening of unfavorable conditions on the world financial markets may have a negative impact on OAO Gazprom's ability to raise new loans and refinance the current part of the debt on the same terms. The general decrease in the level of liquidity may affect the solvency of Gazprom's counterparties and their ability to ensure timely repayment of debts to the Company.
Uncertainty in the development of the situation in the capital markets may require a revision of the Company's forecasts regarding future cash flows and provisions for impairment of financial and non-financial assets. Under the current conditions, OAO Gazprom is taking the necessary measures to ensure the sustainable development of the Group's activities.
Risks associated with changes in exchange rates
Currency risk for OAO Gazprom is associated with fluctuations in the exchange rates of the ruble against those foreign currencies in which part of OAO Gazprom's income, expenses and liabilities are denominated, mainly against the US dollar and euro.
In particular, OAO Gazprom's profit indicators may be adversely affected by the appreciation of the ruble against the US dollar or the euro, as this may lead to a decrease in revenue relative to costs.
The depreciation of the ruble for OAO "Gazprom" may result in additional expenses for servicing and repayment of liabilities denominated in foreign currency. Also, a decrease in the value of the ruble against major currencies will lead to an increase in the ruble equivalent of costs denominated in foreign currency.
However, the risks associated with a decrease in the value of the ruble can be limited, and even partially or completely offset by an increase in the ruble equivalent of revenue from export contracts denominated in foreign currency, which makes up a significant part (more than 60%) of the total revenue of OAO Gazprom ".
JSC "Gazprom" has a number of investments in foreign companies, the value of net assets of which is exposed to the risk of changes in the exchange rate.
Risks associated with changes in interest rates.
A substantial part of Gazprom's debt portfolio is made up of syndicated loans from Western banks. The interest rate for servicing many of these loans is based on LIBOR/EURIBOR interbank lending rates. An increase in these interest rates may lead to an increase in the cost of servicing Gazprom's debt.
In the period from 2004 to 2009, the trend associated with the predominance of credits and loans with a fixed interest rate in the Company's debt portfolio persists, as a result of which this risk is somewhat reduced. Since 2004, there has been a decrease in the share of borrowings from the Russian market in the Company's debt portfolio, associated with the work carried out by OAO Gazprom as part of the implementation of a strategy aimed at improving the structure of the debt portfolio and reducing the cost of servicing it. In April 2009, in order to finance the acquisition of a 20% stake in OAO Gazprom Neft, under an option with ENI, the Company attracted long-term loans from Sberbank of the Russian Federation in the amount of USD 3 billion, GPB Credit Risk Management S.A. in the amount of 600 million dollars. USA and Rosselkhozbank in the amount of 600 million US dollars.
Loans from GPB Credit Risk Management S.A. and Rosselkhozbank were fully repaid ahead of schedule in September and December 2009. respectively. In December 2009 a partial early repayment of a loan from Sberbank in the amount of USD 720 million was also made.
Risks associated with OAO Gazprom's attraction of funds on the Russian corporate bond market.
At present, there are four issues of OAO Gazprom's ruble bonds of series A8, series A9, series A11 and A13 placed in November 2006, February 2007 and June 2009, respectively, in circulation on the Russian market.
Ruble bonded loans of OAO "Gazprom", circulating on the Russian market, have a fixed coupon rate. Unlike floating interest rates, which are usually tied to certain economic indicators, fixed interest rates allow leveling the interest rate risk and the impact of changes in economic indicators on the value of coupon rates. In addition, fixed interest rates protect the calculated amount of future obligations to service bonded loans from the influence of political, economic and other factors.
Risks associated with the impact of inflation.
Changes in the consumer price index have a certain impact on the level of profitability of JSC "Gazprom", and, as a result, on the financial condition and the ability to fulfill obligations, but this impact is not a factor of direct dependence.
The low dependence of Gazprom's profitability on changes in the consumer price index is mainly due to the fact that during periods of moderate inflation, when the Central Bank's monetary policy is usually aimed at maintaining the ruble exchange rate, resulting in a drop in the purchasing power of the national currency, the increase in OAO Gazprom's expenses will be compensated by an increase in revenues from sales on the domestic market, since, in accordance with the tariff policy of the Russian Federation, a gradual increase in gas prices is expected at a rate comparable to the rate of inflation.
Despite the fact that even with a significant increase in consumer prices, OAO Gazprom maintained its profitability, there are no guarantees that a possible increase or decrease in consumer prices will not lead to a drop in the level of profitability of OAO Gazprom in the future. It is not possible to predict a critical level of inflation for OAO "Gazprom" because, in addition to the level of consumer prices, it is necessary to take into account the change in the real purchasing power of the ruble, the situation on the export gas markets and the future policy of the state in relation to natural gas tariffs.
Impact of financial risks on financial reporting indicators.
In accordance with Order No. 67n of the Ministry of Finance of the Russian Federation dated July 22, 2003, data on the availability and flow of funds are recalculated at the exchange rate of the Central Bank of the Russian Federation as of the date of preparation of financial statements. Changes in foreign exchange rates comparable to those in 1998 will have a significant impact on cash flow statement items that include foreign currency transactions.
In the Profit and Loss Statement, as part of other income and expenses, positive and negative exchange differences are reflected - the result of the revaluation of the relevant asset, including receivables, or liabilities, including loans and borrowings, the value of which is expressed in foreign currency.
currency (recalculated in accordance with the Order of the Ministry of Finance of the Russian Federation dated July 22, 2003 N 67n), and, as a result, their amount may have a significant impact on the Company's net profit.
Since Gazprom's export receivables are denominated in US dollars and other convertible currencies, a change in the exchange rate of foreign currencies will lead to a change in the balance sheet items that reflect this receivable.
An increase in the exchange rate of foreign currencies against the ruble will lead to an increase in the balance sheet item reflecting debt on loans and borrowings due to the presence of a large portfolio of credit resources denominated in convertible currency (US dollars or euros).
Changes in gas prices will primarily affect the volume of proceeds from the Company's sales and will have a significant impact on the Company's net profit.
Inflationary processes, as a result of which there is an increase in the cost of materials and raw materials used in production, may have an impact on the increase in the balance sheet.
Also, inflationary processes in the economy of the Russian Federation may have a significant impact on the Company's net profit due to the fact that OAO Gazprom's ability to raise prices for gas sold on the domestic market is limited by state regulation, that is, they cannot be changed by the Company depending on changes in inflation rates and, at the same time, the Company's costs, which are mainly expressed in rubles, change in accordance with inflation rates.
Legal risks
In the event of one or more of the risks listed below, OAO Gazprom will take all possible measures to minimize negative consequences. To neutralize part of the risks, the Issuer has taken a number of protection measures, to a greater extent related to the implementation of the Issuer's production program, and developed possible measures for the Issuer's actions in the event of a particular risk. However, it should be noted that the preliminary development of measures adequate to the corresponding events is hampered by the uncertainty of the development of the situation, and the parameters of the measures taken will depend to a greater extent on the specifics of the situation in each particular case. OAO "Gazprom" cannot guarantee that actions aimed at overcoming the negative changes that have arisen will lead to improvement of the situation, since the described factors are beyond the control of OAO "Gazprom".
Risks associated with changes in currency regulation.
OAO Gazprom is a participant in foreign economic relations, has a part of its assets and liabilities in foreign currency, as well as foreign currency accounts in foreign banks and their branches located on the territory of foreign states, respectively, the Company is exposed to significant risks associated with changes in currency regulation.
In force since June 2004, the law on foreign exchange regulation allows the Government and the Central Bank of the Russian Federation to take measures to further regulate and strengthen foreign exchange controls, including operations with foreign securities and foreign currency borrowing by Russian companies. This Law abolished the need to obtain licenses for specific transactions from the Central Bank. Instead, generally applicable restrictions on foreign exchange transactions are established, such as the implementation of mandatory reserves with the Central Bank and authorized banks for specific foreign exchange transactions, the implementation of notifications about the opening of accounts, the conduct of certain other foreign exchange transactions and the opening of special accounts for settlements in foreign currency.
As part of the liberalization of foreign exchange legislation, on July 1, 2006, Directive of the Central Bank of Russia dated March 29, 2006 No. 1689-U came into force canceling the requirement of the Bank of Russia to reserve when conducting certain types of foreign exchange transactions established by the Directives of the Bank of Russia dated June 29, 2004 No. 1465-U and No. 1577-U of May 6, 2005, as well as from January 1, 2007, the Decree of the Government of the Russian Federation of October 17, 2005 on the mandatory preliminary registration of an account (deposit) opened in a bank for outside the territory of the Russian Federation.
Against the backdrop of the ongoing liberalization of foreign exchange legislation, the Government and the Central Bank of the Russian Federation took measures to strengthen control over the conduct of foreign exchange transactions. So, at the end of 2006, legislatively fixed Additional requirements to the volume of information reflected by authorized banks in the database on foreign exchange transactions, as well as the Rules for Ensuring the Interaction of Professional Participants of the Securities Market, Customs and tax authorities as agents of currency control with the Central Bank of the Russian Federation. Decree of the Government of the Russian Federation No. 98 dated February 17, 2007 approved the Rules for the Submission by Residents and Non-Residents of Supporting Documents and Information in the Course of Foreign Exchange Transactions to Foreign Exchange Control Agents.
The restoration of restrictions that reduce the possibility of converting ruble income into foreign currency and reverse converting rubles due to the requirements for mandatory repatriation and conversion may adversely affect the results of operations and the ability of the Company to make payments on loans and borrowings. In fact, the ruble is not used in settlements outside the Commonwealth of Independent States, so OAO Gazprom's ability to insure risks associated with changes in exchange rates through conversion into other currencies is significantly limited. In Russia, the conversion of rubles into other currencies is regulated by rules and procedures that limit the range of purposes for which conversion and payment in foreign currencies is allowed.
Risks associated with changes in tax legislation.
OAO Gazprom is one of the largest taxpayers in the Russian Federation, paying federal, regional and local taxes, in particular, value added tax, corporate income tax, transport tax, corporate property tax, and land tax.
One of the features of the Russian legislation on taxes and fees is its constant variability.
The principles of taxation in the Russian Federation, on which the tax system of Russia is based, are established by part one tax code Russian Federation (NK RF). Part one of the Tax Code of the Russian Federation determined the general rules that should guide the subjects of tax legal relations, secured their rights and obligations, as well as procedural rules that facilitate the observance of these rights and obligations.
Issues related to the payment of specific taxes are established by part two of the Tax Code of the Russian Federation, which is also subject to regular changes and additions. Despite the assurances of the Government of the Russian Federation on the stability of tax legislation, laws amending the Tax Code of the Russian Federation in terms of changing the procedure for calculating and paying specific taxes are adopted annually. This makes it difficult to make medium- and long-term forecasts of taxpayers' activities.
In the context of the economic crisis, a number of laws aimed at reducing the tax burden have been adopted. Thus, from January 1, 2009, the corporate income tax rate was reduced from 24% to 20%, and a "depreciation premium" was introduced in the amount not exceeding 30% for certain types of fixed assets.
At the same time, in 2009 a number of amendments to the RF Tax Code were adopted, which entered into force on January 1, 2010 and introduced significant changes in the taxation of organizations and individuals. For example, the replacement from January 1, 2010 of the unified social tax with insurance premiums in accordance with the Federal Law of July 24, 2009 No. 212-FZ is associated with an increase in the burden on the organization to pay mandatory payments, since, unlike the UST, when calculating insurance premiums, the use of regressive scale is not provided. In 2010, the procedure for calculating corporate income tax and personal income tax (PIT) on income in the form of dividends and transactions with securities and financial instruments of futures transactions was somewhat changed.
In addition, the State Duma of the Russian Federation adopted in the first reading a bill submitted by the Government of the Russian Federation, which plans to significantly tighten control over transfer pricing for tax purposes.
In general, in relation to organizations in the gas industry, we can talk about a stable tax burden over the past 5 years. At the same time, it cannot be guaranteed that the tax burden on this sector of the economy will not increase in the future.
Certain risks also arise due to the imperfection of the judicial system in the Russian Federation and the lack of a unified position among various judicial bodies on the same controversial issues of taxation. Russian law is not precedent, therefore, precedents created in the course of previous court proceedings do not affect the course of consideration of similar cases in other courts.
Despite the fact that OAO Gazprom strives to strictly comply with the requirements of tax legislation, the risks of presenting the Company with tax claims.
OAO "Gazprom", as a law-abiding taxpayer, under the conditions of imperfect and frequently changing tax legislation makes every effort to comply with it, and, if necessary, resorts to defending its positions in courts.
Risks associated with reordering customs clearance and payment of fees.
1. A number of key issues regarding the procedure for declaring and collecting customs duties in the course of export deliveries of natural gas have been the subject of disagreements between OAO Gazprom/OOO Gazprom Export and the customs authorities over the past two years. The actions of the customs authorities appealed by the Company in court were unequivocally recognized as illegal. In addition, the Company submitted the most pressing issues for discussion to the Government of the Russian Federation, which, after considering them in January 2010, canceled the decisions of the Federal Customs Service of the Russian Federation regarding the procedure documentary evidence gas exports (requirement under order No. 591 of acts from border metering stations with a breakdown of volumes under foreign trade contracts). Duty-free clearance of Blue Stream volumes and the procedure for deducting discounts from the price of natural gas from the customs value were also restored.
In accordance with the adopted judicial and government decisions, the Central Energy Customs returns the previously illegally collected customs duty.
In order to avoid the risk of future similar requirements from the customs authorities and the diversion of significant financial resources from the turnover of the Gazprom Group, it is necessary that the Customs Code of the Customs Union, which will come into force on July 1, 2010, and the federal law"On customs regulation in the Russian Federation" (the law is still in the form of a draft) took into account the provisions of the current Russian customs legislation. To this end, OAO Gazprom/OOO Gazprom Export sent relevant proposals to the Ministry of Economic Development, the Ministry of Energy of Russia, the Federal customs service, as well as to the Commission of the Customs Union. Work on their implementation continues.
2. The issue of ensuring the payment of customs payments remains relatively settled. The semi-annual permits granted by the Federal Customs Service of Russia since 2008 to carry out export deliveries of natural gas without payment of security (currently valid until July 31, 2010) and the relevant provisions in the Customs Code of the customs union and the draft Federal Law "On Customs Regulation in the Russian Federation" do not exclude in the future, the risk of refusal to the Company to use the procedure for paying export duties on natural gas in two tranches (50% / 50%) and may make it necessary to seek additional funds from 15 to 20 billion rubles monthly for a 100% advance payment of customs duties (if filing an interim declaration).
3. When moving natural gas to European countries in transit through the territory of Ukraine, periodically there are risks associated with unauthorized withdrawal of gas intended for Western consumers. This situation makes it very difficult to distribute and declare export volumes of gas supplied under foreign trade contracts by OOO Gazprom Export, and as a result may lead to the need to apply to the International Arbitration Court.
Risks associated with changes in the requirements for licensing OAO Gazprom's core business, or licensing the rights to use objects whose circulation is limited (including natural resources).
In the 1st quarter of 2010, the following regulatory legal acts were adopted or came into force, regulating issues related to the licensing of OAO Gazprom's core business.
Federal Law No. 374-FZ of December 27, 2009 "On Amendments to Article 45 of Part One and Chapter 25.3 of Part Two of the Tax Code of the Russian Federation and Certain Legislative Acts of the Russian Federation, as well as on Recognizing the Federal Law "On Fees for the issuance of licenses for the implementation of activities related to the production and circulation of ethyl alcohol, alcoholic and alcohol-containing products.
Article 3 of this law amends the Law of the Russian Federation of February 21, 1992 N 2395-1 "On Subsoil", aimed at bringing the norms of the legislation into line by excluding the issues of paying a fee for issuing licenses from the scope of the Law "On Subsoil", since relations related to the state fee, including for the issuance of licenses, are regulated by the legislation of the Russian Federation on taxes and fees.
Decree of the Government of the Russian Federation of 02.02.2010 N 39 "On Approval of the Regulations on State Supervision over the Safe Conduct of Works Related to the Use of Subsoil and on Amendments to the Regulations on State Control over Geological Survey, Rational Use and Protection of Subsoil" was adopted, which determined bodies of state mining supervision, their powers, rights, duties and work procedures.
The approved Regulations on state supervision over the safe conduct of work related to the use of subsoil establish that state mining supervision is carried out Federal Service for Environmental, Technological and Nuclear Supervision and its territorial bodies in cooperation with the Federal Service for Supervision of Natural Resources and its territorial bodies. The functions of Rostekhnadzor in the field of state mining supervision have also been defined (these include, in particular, supervision over compliance by subsoil users with industrial safety requirements in the design, construction, operation, conservation and liquidation of mining facilities, supervision over compliance with the requirements for safe works, requirements for the technology of work, the correctness of spatial measurements and determinations of mining parameters carried out by users of the subsoil, etc.). A list of Rostechnadzor officials exercising state mining supervision has been established, as well as the powers of these persons, incl. on consideration of cases of administrative offenses and preparation of submissions on the suspension of all types of work related to the use of subsoil.
In accordance with the amendments made to the Regulations on State Control over Geological Survey, Rational Use and Protection of Subsoil (Decree of the Government of the Russian Federation No. 293 dated May 12, 2005), the powers of Rosprirodnadzor in the field of state geological control have been clarified, in particular, it has been established that Rosprirodnadzor exercises also control over the reliability and validity of the materials submitted by subsoil users for setting mineral reserves on the state balance of mineral reserves and writing them off from the state balance, prevents unauthorized use of subsoil and unauthorized development of mineral deposits, monitors the reliability of data included in the state statistical reporting organizations engaged in the search, evaluation and exploration of mineral deposits and their extraction.
Decree of the Government of the Russian Federation of 03.03.2010 N 118 "On approval of the Regulations on the preparation, approval and approval of technical projects for the development of mineral deposits and other project documentation for the performance of work related to the use of subsoil plots, by types of minerals and types of subsoil use" established the procedure for preparing, agreeing and approving technical projects for the development of mineral deposits and other project documentation for the performance of work related to the use of subsoil plots, by types of minerals and types of subsoil use.
In accordance with the approved Regulations, design documentation is prepared by the subsoil user or an organization involved by the subsoil user on the basis of the design specification developed and approved by the subsoil user and the available geological and other information about the subsoil. The design documentation prepared by the design organization is signed authorized person design organization, certified by a seal and submitted to the subsoil user for approval and approval. Prior to approval by the subsoil user, project documentation is subject to approval by the commission created by the Federal Agency for Subsoil Use or its territorial body. The types of project documentation subject to approval, the main requirements for the content of project documentation, the procedure and terms for its consideration and approval are determined.
Order No. 416 of the Ministry of Natural Resources dated December 15, 2009 "On Amendments to the Procedure for Considering Applications for Obtaining the Right to Use Subsoil When Establishing the Discovery of a Mineral Deposit in a Subsoil Plot, with the Except for a Subsoil Plot of Federal Significance and a Subsoil Plot That is Assigned to Subsoil Plots" of federal significance as a result of the discovery of a mineral deposit by a subsoil user who carried out work on the geological study of the subsoil at the expense of own funds for the exploration and extraction of minerals from an open deposit, approved by Order of the Ministry of Natural Resources of the Russian Federation dated January 24, 2005 N 23, the procedure for granting subsoil for use has been clarified.
In accordance with the specified Procedure (Order of the Ministry of Natural Resources of January 24, 2005 N 23), if, based on the results of consideration of the applicant's proposals, they are recognized as complying with the requirements for rational use and protection of subsoil, then on their basis the Federal Agency for Subsoil Use or its territorial body prepares a draft conditions for the use of subsoil . Previously, the Procedure established the obligation to agree on the draft conditions for the use of a subsoil block with the Ministry of Economic Development, insofar as it relates to investment obligations for subsoil use and the mechanism for ensuring their implementation. This obligation to agree on the draft conditions for the use of a subsoil plot with the Ministry of Economic Development is excluded from the Procedure.
The approved order of the Ministry of Natural Resources of January 19, 2010 N 13 "On Amendments to the Procedure for Considering Applications for a Short-Term (Up to One Year) Right to Use a Subsoil Block" clarified the procedure for granting subsoil for short-term use.
In accordance with the Procedure for considering applications for obtaining a short-term (up to one year) right to use a subsoil plot (Order of the Ministry of Natural Resources dated January 24, 2005 N 22) if, based on the results of consideration of the applicant's proposals on the terms of subsoil use, they are recognized as complying with the requirements for rational use and protection of subsoil , then on their basis the Federal Agency for Subsoil Use prepares a draft of the conditions for the use of subsoil. Previously, the Procedure established the obligation to agree on the draft conditions for the use of a subsoil block with the Ministry of Economic Development in terms of investment obligations for subsoil use and the mechanism for ensuring their implementation. This obligation to agree on the draft conditions for the use of a subsoil plot with the Ministry of Economic Development is excluded from the Procedure.
Legal risks associated with the loss of the right to use subsoil plots or violation of the current legislation as a result of these changes are not seen directly for OAO Gazprom.
There is no information on other changes in the requirements for licensing the issuer's core business or licensing the rights to use objects whose circulation is limited (including natural resources).
The risks associated with changes in legislation, or with decisions of federal or local authorities on licensing issues, are beyond the control of OAO Gazprom, and the Company cannot guarantee that there will be no such changes in the future that may adversely affect the Company's activities . However, at present, there are no legal prerequisites related to the complication of the procedure for obtaining licenses or a decrease in the possibility of extending the licenses of OAO Gazprom and its subsidiaries.
Risks associated with changes in judicial practice on issues related to the activities of OAO Gazprom.
August 2, 2005 by the Presidium of the Supreme Arbitration Court The Russian Federation issued Decree No. 16112/03, by which 10,939,913 rubles of damages were recovered from OAO Sibneft (now OAO Gazprom Neft) in favor of citizen O.M. Zatsarina.
In its decision, the Supreme Arbitration Court of the Russian Federation proceeded from the fact that OAO Sibneft, as an issuer of shares, entrusted the maintenance and storage of the register of OAO Sibneft shareholders to the registrar, in accordance with paragraph 4 of Article 44 of the Federal Law "On Joint Stock Companies", is not exempt from liability for maintenance and storage of the registry. At the same time, the court came to the conclusion that in the event that the agreement between the joint-stock company and the registrar does not establish joint and several liability to shareholders for non-fulfillment or improper fulfillment of the obligation to maintain and store the register of shareholders, liability for damage caused to the shareholder by illegal write-off of shares from the personal account must be borne by the joint-stock company itself.
Taking into account that similar claims were brought against OAO Gazprom and the courts refused to satisfy them, we believe that the decision of the Supreme Arbitration Court of the Russian Federation dated August 2, 2005 No. 16112/03 may affect the resolution of similar disputes in the future.
On September 25, 2007, the Presidium of the Supreme Arbitration Court of the Russian Federation issued resolution No. 6194/07, in which the court, when considering a dispute between a shareholder and a joint-stock company, indicated that maintaining a register of shareholders is an entrepreneurial activity for a joint-stock company (issuer). In this regard, the issuer bears blameless liability for the unjustified write-off of shares from shareholders' personal accounts (Item 3 of Article 401 of the Civil Code of the Russian Federation).
In connection with the foregoing, OAO "Gazprom" is deprived of the opportunity to plead the absence of its guilt when bringing claims against the Company for compensation for damage caused by the theft of shares (in particular, in the case of OAO "Rosgazifikatsiya").
Other changes in court practice on issues related to the activities of OAO Gazprom (including licensing issues) that may adversely affect the results of its activities, as well as the results of ongoing litigations in which OAO Gazprom is involved, until the date there was no end of the reporting quarter.
Activity risks
In the event of one or more of the risks listed below, OAO Gazprom will take all possible measures to minimize negative consequences. To neutralize part of the risks, the Issuer has taken a number of protection measures, to a greater extent related to the implementation of the Issuer's production program, and developed possible measures for the Issuer's actions in the event of a particular risk. However, it should be noted that the preliminary development of measures adequate to the corresponding events is hampered by the uncertainty of the development of the situation, and the parameters of the measures taken will depend to a greater extent on the specifics of the situation in each particular case. OAO "Gazprom" cannot guarantee that actions aimed at overcoming the negative changes that have arisen will lead to improvement of the situation, since the described factors are beyond the control of OAO "Gazprom".
Risks associated with ongoing litigation and possible liability of OAO "Gazprom" for the debts of third parties.
The Civil Code and Federal Law No. 208-FZ of 26 December 1995 "On Joint Stock Companies" generally provide that the shareholders of a Russian joint stock company are not liable for the obligations of their companies and only risk losing their investments. These provisions do not apply where one company (the "parent company") has the power to determine the decisions of another company (the "subsidiary"). In certain circumstances, the parent company shall be jointly and severally liable for the obligations of the subsidiary arising from the implementation of such decisions, and in the event that the subsidiary becomes insolvent or bankrupt as a result of the actions or omissions of the parent company, the latter shall be vicariously liable for its debts. Accordingly, being the parent company of subsidiaries in which OAO Gazprom owns more than 50% of the authorized capital, the Company may become liable for their debts.
In addition, JSC "Gazprom" in its activities uses the practice of providing security to third parties. Collateral is provided mainly in the form of a surety for the obligations of the Company's subsidiaries and affiliates. Under the terms of the surety agreement, as well as in accordance with the provisions of the Civil Code of the Russian Federation, if the debtor cannot fully or partially fulfill its obligations, the creditor has the right to demand the fulfillment of the obligation from the surety represented by OAO Gazprom to the extent specified in such an agreement.
The fulfillment of such obligations may have a certain negative impact on the results of the Company's activities. However, taking into account the absence of lawsuits in which OAO Gazprom acts as a defendant for the obligations of subsidiaries, affiliates and other companies, including under surety agreements, as well as the amounts of issued collateral that are insignificant in relation to the book value of assets, the Company does not see the criterion materiality in the risks associated with the onset of liability for the debts of third parties.
Risks associated with the inability to renew licenses for a certain type of activity or for the use of natural resources.
JSC "Gazprom" conducts its operations in accordance with a large number of licenses for the right to use subsoil for the purpose of prospecting, exploration and production of hydrocarbon raw materials and geological study of subsoil. Regulation of these types of activities is carried out mainly in accordance with the Law of the Russian Federation of February 21, 1992 No. 2395-1 "On Subsoil" and by-laws regulations.
The majority of licenses for the right to use subsoil for the purpose of prospecting, exploration, production of hydrocarbon raw materials and geological study of subsoil are held by subsidiaries and affiliates of the Company. Licenses for hydrocarbon production at the Group's fields cover the period up to 2011-2039. Most licenses provide for the possibility of their revocation if significant license requirements are not met in terms of the volume and timing of geological exploration, the timing of putting deposits into operation, the timely payment of fees and taxes for the use of subsoil, or systematic failure to provide information.
OAO Gazprom and the Group's companies generally comply with the requirements of the licenses, take all necessary steps to obtain and maintain licenses in force and minimize the likelihood of suspension and revocation of licenses. In addition, OAO "Gazprom" intends to extend the existing licenses for hydrocarbon deposits, which are expected to be productive after the expiration of the licenses.
Currently, there are no legal, economic or political prerequisites related to the complication of the procedure or the reduction in the possibility of extending the licenses of OAO Gazprom and the Group's companies.
In addition, the Company sends proposals to the Government of the Russian Federation, the State Duma, the Ministry of Natural Resources of Russia to improve the regulatory framework for subsoil use.
Risks associated with exploration activities.
JSC "Gazprom" conducts geological exploration in the regions of Western and Eastern Siberia, on the continental shelf of the Russian Federation, which are characterized by remoteness from settlements, difficult climatic and mining and geological conditions, which leads to certain costs when planning costs for the implementation of projects for prospecting and exploration of deposits hydrocarbons. The cost of exploration work for these reasons may differ from the estimated cost of the project. As a result, the Company may face the need to adjust the work on the implementation of exploration projects for a number of reasons, including geological and technical complications in the drilling process (oil and gas shows, loss of drilling fluid, formation of caverns in the wellbore, etc.). In addition, when implementing projects for the search and exploration of hydrocarbons, you can get a result that differs from the expected one. At the same time, JSC "Gazprom" has considerable experience in carrying out such work and uses all available geological and geophysical data in the search and exploration of hydrocarbons, which leads to a reduction in such risks.
Risks associated with environmental protection.
OAO Gazprom's production activities are associated with a potential risk of environmental damage or pollution. The consequence of this is the risk of civil liability and the need to carry out work to eliminate such damage.
To mitigate such risks, OAO Gazprom pursues a consistent environmental policy (a new environmental policy was adopted in September 2008), constantly monitors its activities in order to comply with relevant environmental standards at all stages of its activities, implements programs and measures to protect the environment and reduce impact on the environment.
The result of such activities was a significant reduction in the risk of environmental pollution.
Nevertheless, in its financial plans OAO "Gazprom" forms reserves to cover liability for environmental pollution and carries out liability insurance for such cases.
Risks associated with accidents and equipment failure.
OAO Gazprom's gas exploration, production and transportation activities may be subject to the adverse impact of many factors, including breakdown or failure of equipment, possible problems at the technological processes, decline in production performance below expected levels of production or efficiency, labor disputes, natural disasters, weather conditions, terrorist attacks or sabotage at numerous facilities of OAO Gazprom. At the same time, the Unified Gas Supply System ensures systemic reliability of gas supplies (i.e., in the event of an accident at any of its sections, gas supplies using technological and intersystem jumpers can be carried out along other routes). In addition, OAO "Gazprom" constantly monitors the state of systems that ensure gas supplies to consumers, carries out their reconstruction and modernization, which also reduces such risks.
Risks of rising costs
Unit costs in capital construction in the oil and gas industry in the pre-crisis years grew at a rate exceeding the rate of inflation due to an increase in prices for raw materials, materials, components, services, including metal prices, gas pumping units, well drilling costs, etc.
In connection with the fall in prices for raw materials in the world commodity markets and an increase in the level of competition, we can expect a decrease in the level of operating costs, however, this decrease may not be as significant as expected, since many of the Group's suppliers use imported components and equipment, the prices of which may increase significantly due to the devaluation of the ruble.
To minimize the risks associated with rising costs, OAO Gazprom uses tenders to select suppliers of goods, contractors for work and services, and works directly with suppliers. A Comprehensive Plan of Measures to Optimize the Company's Costs has been developed and is being implemented, work is underway to improve management efficiency, transparency and control over spending.
Risks associated with the possibility of losing consumers whose turnover is at least 10% of the total revenue from gas sales.
At present, the group of companies OAO "Gazprom" provides about 83% of all gas production in Russia, its transportation through the main gas pipelines of the Unified Gas Supply System, owned by the Company, and sale on the domestic and foreign markets.
OAO "Gazprom" is the main supplier in the gas market of the former USSR. In 2006, OAO Gazprom supplied gas to the countries of the Union of Independent States in accordance with annual contracts, and to the Baltic States on the basis of long-term contracts until 2015 inclusive. Since 2007, medium-term contracts until 2011 have been concluded for the supply of gas to the Republic of Moldova and the Republic of Belarus, since 2009, a long-term contract for the supply of gas to Ukraine began to operate.
Gazprom sells a significant portion of its natural gas to European countries. Export sales of gas form the bulk of the company's revenue.
Export of natural gas to European countries is carried out by OAO "Gazprom" mainly under long-term contracts at prices indexed in accordance with changes in world prices for competing fuels. These prices may fluctuate significantly under the influence of a number of factors beyond Gazprom's control.
A certain risk for OAO "Gazprom" is the disparity in prices under the Company's long-term contracts and gas prices in the spot markets. Given the excess of gas supply over demand, high prices under the Company's long-term contracts may have a negative impact on gas withdrawals by buyers.
Positions of OAO "Gazprom" in the European gas market are still stable. A solid portfolio of existing and newly concluded long-term "take-or-pay" contracts, a significant resource base, as well as constantly developing capacities for gas production, transportation and storage are a guarantee of maintaining existing positions.
The organization of export deliveries based on long-term contracts, as well as compliance with the "take-or-pay" principle, are the most important factors that make it possible to minimize the risks of a decrease in the volume of Gazprom's gas export deliveries during a period of temporary reduction in demand and gas prices in foreign markets.
Activity
Russian market.
The gas industry of the Russian Federation is essential element resource support for the economic development of the country. The table below shows the volumes of gas production in Russia, including the share of the Gazprom Group:
By 2020, given the effective demand of Russian consumers and favorable external market conditions, Gazprom's gas production may reach up to 650-670 billion cubic meters. m. The Yamalo-Nenets Autonomous Okrug, where 72% of all Russian reserves are concentrated, remains the main gas producing region of the country in the prospect under consideration. In the period up to 2010, the decline in gas production will be compensated mainly through the development of new fields in this region and the horizons and areas of developed fields prepared for development.
The Yamal Peninsula, as well as the waters of the northern seas of Russia, will become strategic priority regions for gas production in the long term.
Other major gas production areas in 2010-2020 will be Eastern Siberia and the Far East. Gas production will be developed based on the development of offshore fields on Sakhalin, hydrocarbon fields in the Krasnoyarsk Territory, the Republic of Sakha (Yakutia), as well as in Irkutsk region.
A promising line of Gazprom's development is the processing of natural gas using the Gas to Liquids (GTL) technology and the production of synthetic liquid fuels (GTL). The creation of the GTL industry will allow the Company to diversify its activities, ensure efficient marketing of natural gas processing products, create a modern transportation system, and use low-pressure gas resources.
Support for the reorientation of gas use from fuel to raw materials purposes will ensure the growth of production of products with a higher added value. Technical modernization and reconstruction of existing gas processing plants will be aimed at increasing the extraction of valuable components from gas, increasing economic efficiency and environmental safety of enterprises. As a result of deepening the processing of hydrocarbon resources, an increase in the production of motor fuel, liquefied gases and sulfur, the production of polyethylene and, if the external market is favorable, methanol is planned.
JSC "Gazprom" continues to actively work with the federal executive authorities to improve the pricing policy of the state in the gas sector.
Currently, the Russian natural gas market in the area of the Unified Gas Supply System (UGSS) consists of two sectors: regulated and unregulated. JSC "Gazprom" is practically sole supplier gas in the regulated sector of the market and the owner of the UGSS. Of all types of fuel resources, only prices for natural gas produced by the companies of the OAO Gazprom group and supplied to Russian consumers are subject to state regulation. Prices for oil, coal and gas sold by independent producers are formed on the basis of market mechanisms.
It should be noted that certain steps have been taken in recent years to liberalize the Russian gas market. Starting from November 2006 to 2008, as part of an experiment conducted in accordance with the Decree of the Government of the Russian Federation on the sale of limited volumes of gas on an electronic trading platform, gas was sold by OAO Gazprom along with gas from independent producers at prices not regulated by the state.
During the experiment, about 13.3 billion cubic meters of gas were sold on the electronic trading platform of Mezhregiongaz LLC from December 2006 to December 2008, of which about 5.8 billion cubic meters were gas from independent producers and about 7.5 billion cubic meters - gas of OAO "Gazprom" and its affiliates.
Sales price indicators on the electronic trading platform for the specified period exceeded the level of regulated prices by 38.0%.
Decree of the Government of the Russian Federation of December 10, 2007 No. 851 "On the continuation of the experiment on the sale of gas on the electronic trading platform in 2008" allowed an increase in gas sales by Open Joint Stock Company Gazprom and its affiliates at prices not regulated by the state from 5 billion cubic meters .m in 2007 to 7.5 bcm in 2008. In fact, in 2008, 3.1 billion cubic meters of gas by OAO Gazprom and its affiliates and 2.99 billion cubic meters of gas by independent producers were sold on the electronic trading platform.
Currently, the Government of the Russian Federation is considering a draft resolution "On the sale of gas using exchange technologies", which provides for the right of OAO Gazprom to sell up to 12.5 billion cubic meters using exchange technologies at prices not regulated by the state. gas in 2010 with the expansion of volumes up to 17.5 billion cubic meters, starting from 2012.
In addition, in accordance with Decree of the Government of the Russian Federation No. 333 dated May 28, 2007 "On Improving State Regulation of Gas Prices", OAO Gazprom is allowed to sell gas at prices established by agreement of the parties within a regulated range of maximum and minimum levels for the following groups of end consumers (except for the population):
Purchasing gas in excess of the volumes fixed in gas supply contracts for 2007;
The supply of gas to which is carried out in connection with the work to expand the Unified Gas Supply System.
In 2009, 12.9 billion cubic meters of gas were sold to the above consumer groups. At the same time, the excess of prices established by agreement of the parties over the corresponding regulated wholesale prices for the specified period amounted to an average of 15%.
In accordance with the said resolution, in order to inform the gas market participants about the principles of formation of wholesale gas prices, ensuring equal profitability of gas supplies to the external and internal markets, the application of which is planned starting from 2011, the Federal Tariff Service quarterly publishes information on such wholesale prices, calculated according to the formula established by the Service, on its official website in the information and telecommunication network Internet.
At present Gazprom is working with the Ministry of Economic Development of Russia, the Ministry of Energy of Russia and the Federal Tariff Service of Russia on the issue of specific measures and terms for the transition to market principles of pricing for gas supplied to consumers in the domestic market and the adoption of a relevant regulatory legal act.
European market.
Positions of OAO "Gazprom" in the European gas market are stable. The company ranks first in Europe and in the world in terms of natural gas exports. A solid portfolio of long-term export contracts on a "take-or-pay" basis, a significant resource base, as well as constantly developing capacities for gas production, transportation and storage are a guarantee of maintaining existing positions.
A special role in the further increase in gas exports is assigned to the Nord Stream and South Stream gas pipelines being designed.
Gazprom's export strategy is based on a system of long-term contracts with simultaneous use of additional opportunities for export deliveries on a short-term and "spot" basis.
Another fundamental element of the Company's export strategy is the principle of maintaining a single export channel. In July 2006, the Federal Law "On the Export of Natural Gas" was adopted, which granted the exclusive right to export this product to the organization that owns the unified gas supply system or its subsidiary company, in whose capital the share of participation of the organization-owner of the unified gas supply system is 100%. In accordance with the Law, a license to carry out exclusive right for the export of natural gas was issued to Gazprom Export LLC (formerly Gazexport LLC). Legislative consolidation of the exclusive right to export gas to LLC Gazprom Export is an additional legal guarantee of the reliability of Russian gas exports.
Serious additional opportunities for strengthening Gazprom's positions in the foreign market are provided by the organization and development of production and marketing of liquefied natural gas (LNG). The combination of LNG supplies with a well-developed gas transportation infrastructure creates a strong impetus to increase the efficiency of gas exports while diversifying sales markets. This allows, in addition to further diversification of gas supplies to the European market, also to enter completely new markets for the Company, in particular, the United States and the countries of the Asia-Pacific Region.
The results of OAO "Gazprom" activities are fully in line with modern trends in the development of the gas industry. The Company actively uses new technologies, increases the level of gas production by commissioning capacities at existing and new facilities, expands and modernizes the gas transmission infrastructure. The Company is the largest gas producing Company, transports and supplies natural gas to about 80% of Russian consumers. OAO "Gazprom" ranks first in the world and in Europe in terms of natural gas exports.
Terms
At present, the global oil and gas market is particularly influenced by several important factors that are of decisive importance for the competitive positions of companies operating in the market, including OAO Gazprom. These factors include:
· Reduced gas consumption as a result of the financial crisis. According to preliminary estimates, gas consumption in European far-abroad countries in 2009 decreased by 41 billion cubic meters. m (or about 7%) to 560 billion cubic meters. m. This was the result not only of the crisis and reduced demand, but also a reaction to the appearance in Europe of additional volumes of cheaper LNG (in particular from Qatar), ousted from the US market to Europe during the growth of shale gas production in the North American continent. The excess supply of LNG diverted from the US market has a negative impact on the price level in Europe and reduces the volume of purchases of pipeline gas, including those supplied from Russia. The fall in gas demand in Europe was partly softened by the cold weather of January-March 2009. The latest gas consumption statistics in European countries show a gradual increase in gas demand in the second half of 2009. However, the market recovery is far from over. According to forecasts by leading consulting companies, gas demand will recover to the level of 2008 in 2011-2013.
At the same time, the EU is actively looking for ways to reduce gas dependence on Russia. In particular, terminals for receiving LNG are being actively built in Europe, and the possibilities of using shale gas are being discussed. There are different assessments of the prospects for replenishing the gas balance of Europe from these sources. Thus, according to Cambridge Energy Research Associates, the share of LNG in gas consumption in Europe may increase from 11% in 2008 to 36% by 2035. In relation to shale gas, the IEA estimates European reserves at 15 trillion. cube m, which is comparable to the reserves of Yamal. It is expected that the results of exploration drilling will appear already this year and will allow a more accurate assessment of the level of economically recoverable shale gas reserves in Europe.
· Consolidation. Over the past few years, the strategic and competitive environment of the global oil and gas markets has changed significantly due to the active processes of mergers and acquisitions of companies. They are due to the desire to increase income, increased competition, and the growing potential to use the opportunities provided for the development of activities.
Development of engineering and technology. Technological innovations in the oil and gas industry have significantly improved the technical and economic indicators of exploration and development of hydrocarbon reserves. The proportion of successful geological surveys has increased, the duration of field operation and the degree of recoverability of explored reserves have increased, while reducing the costs of the full project cycle. All this was achieved thanks to the active and effective introduction of new equipment and technology. In general, new technologies have become relatively accessible to all market participants. OAO "Gazprom" seeks to apply new developments in practical activities to achieve its strategic and financial goals.
Environmental protection and social factors. Oil and gas companies around the world are facing increasing demands to carry out their activities in accordance with the need to protect the environment and the social needs of society. Investors, consumers, government agencies, non-governmental organizations are increasingly closely monitoring the environmental performance of companies, respect for human rights, and the development of alternative and renewable energy sources. As a result, OAO Gazprom expects increased competition in its main markets.
Due to significant differences in the conditions of activity in the main markets of the Company, the impact of the above factors on the activities of Gazprom is not the same. In addition, often the conditions inherent in a particular country or region have a more significant impact on competitiveness than factors of industry importance.
The main factors that may most adversely affect the Company's ability to obtain the same or higher results in the future compared to the results obtained in the last reporting period include risks associated with a drop in demand for gas in Europe as a result of financial – the economic crisis associated with state regulation of wholesale gas prices in the domestic market, competition from other natural gas suppliers, especially Norway, Algeria, Qatar, the Netherlands, producers of unconventional gas (shale gas, coal bed gas, etc.), as well as from suppliers of alternative types of energy carriers (liquid fuel, coal). The results of OAO Gazprom's activities are also affected by such market risks as changes in exchange rates, interest rates and prices for marketable securities.
It is not possible to determine the probability of occurrence of the above events at the current moment due to the fact that these events/factors in most cases are beyond the control of the Company.
The main factors that have a positive impact on the activities of JSC "Gazprom" are the increase in the competitiveness of the Company as a result of the introduction and use of technical and technological innovations in the field of gas production and processing. Due to centralized control, large branching and availability of parallel transportation routes, the Company's gas transmission system has a significant margin of safety and is capable of uninterrupted gas supply even at peak seasonal loads. The Company is pursuing a strategy of diversification and expansion of activities. At present, the product portfolio of the Gazprom group of companies includes natural gas, oil, products of oil, gas and gas condensate processing, petrochemical products, liquefied natural gas, electricity and heat. The Company is preparing to enter new export markets - the USA, China, Japan and South Korea.
Competitors
Competition in the Russian market.
In accordance with the current legislation of the Russian Federation, the sphere of gas transportation through pipelines, including trunk pipelines, is classified as a natural monopoly type of activity subject to state regulation. This type of service is provided by OAO Gazprom, which is the owner of the Unified Gas Supply System. The current procedure for the access of independent organizations to the gas transmission system of JSC "Gazprom" is established by Decree of the Government of the Russian Federation dated July 14, 1997 No. 858 "On Ensuring Access of Independent Organizations to the Gas Transmission System of the Open Joint Stock Company "Gazprom", as amended and supplemented by the Decree of the Government of the Russian Federation dated May 3, 2001 No. 334 "On Ensuring Non-Discriminatory Access to Gas Transportation Systems".
At present, the Gazprom group of companies carries out more than 85% of all gas production in Russia, transports it through the main gas pipelines of the Unified Gas Supply System and sells it on the domestic and foreign markets. Wholesale prices for gas sold by OAO Gazprom to consumers in the Russian Federation, as well as tariffs for gas transportation services provided to independent gas producers, are set by the regulatory state body - the Federal Tariff Service. The share of independent gas producing organizations, which are granted the right to sell gas at free (market) prices, formed on the basis of supply and demand, accounts for about 15% of gas production in Russia. However, in conditions when the bulk of gas is sold to consumers in the regulated sector of the gas market, independent producers have limited opportunities to use this right, and they, acting in another - unregulated market segment, do not have a competitive impact on the dominant position of OAO Gazprom.
Share of gas transportation via the UGSS of independent suppliers in the total volume of gas transportation, %:
At present Gazprom's activity in the Russian natural gas market is beyond competition. In recent years, federal executive authorities with the participation of OAO Gazprom and independent gas producers have been developing measures to form and further develop the federal wholesale gas market (FOG), aimed at the gradual liberalization of the Russian gas market. As part of the formation of the FORG, an experiment is being carried out to sell part of the gas to OAO Gazprom on competitive terms with independent gas producers.
Thus, starting from 2006, as part of this experiment, conducted in accordance with Decree of the Government of the Russian Federation No. 534 dated September 2, 2006, gas from OAO Gazprom and its affiliates was sold on the electronic trading platform along with gas from independent producers at non-regulated state prices. On December 10, 2007, the Government of the Russian Federation adopted Decree No. 851 "On the continuation of the experiment on the sale of gas on the electronic trading platform in 2008", which provided for an increase in gas sales by Open Joint Stock Company Gazprom and its affiliates at prices not regulated by the state from 5 up to 7.5 billion cubic meters At the same time, the volume of gas sold by OAO Gazprom and its affiliates in accordance with the ongoing experiment could not exceed by more than 15% the volume of gas independently sold by independent organizations on the electronic trading platform.
In 2010, the draft Decree of the Government of the Russian Federation "On the sale of gas using exchange technologies", prepared by the Russian Ministry of Energy in conjunction with OAO "Gazprom", provides for an increase in the maximum annual volume of gas sales using exchange technologies: up to 7.5 billion cubic meters. m on the electronic trading platform and up to 5.0 billion cubic meters. m on the commodity exchange.
However, despite the changes taking place as part of the liberalization of the Russian gas market, it is premature to assess the prospects of OAO Gazprom and its place in the competitive natural gas market, as well as to identify its potential competitors.
Competition in the market of the countries of the former USSR.
Historically, the main system of gas transportation of the countries of the former USSR was created as part of the unified gas supply system of the USSR, therefore, technologically, these countries are dependent on gas supplies through the main network of gas pipelines owned by OAO Gazprom. In turn, OAO "Gazprom" is also dependent on these countries in the field of natural gas transit to Europe and the Kaliningrad region. In these states, except for the states of Central Asia, there are no large deposits capable of meeting their domestic demand for natural gas. After the collapse of the Soviet Union, independent states were unable to fully pay for natural gas supplies, which led to a significant debt to OAO Gazprom. As a result, OAO "Gazprom" had to significantly reduce gas supplies to some CIS countries.
Competition in the European market.
JSC "Gazprom" for many years is the largest exporter of natural gas in the world and in Europe in particular. At the same time, in Western Europe and, to a much lesser extent, in Central Europe, Gazprom competes with other major gas suppliers, such as StatoilHydro (Norway), SONATRAC (Algeria), GazTerra (formerly Gasunie ") (Netherlands), as well as with "flexible" LNG volumes from Qatar.
In the European market, after the entry into force in 1998 of the European Union Directive on gas, the purpose of which is to liberalize the market, a process of significant structural changes began, which continues to this day. As a result, in conditions of a significant excess of gas supply over demand, competition between the main suppliers of this energy carrier to the region - Russia, Norway, Algeria, and the Netherlands - is becoming more and more intense. However, significant explored gas reserves controlled by OAO "Gazprom" give the Company significant competitive advantages.
While natural gas production in Europe tends to decrease due to the depletion of its proven reserves, Norway is increasing its exports of this energy carrier.
At present JSC "Gazprom" covers about 1/4 of the demand for natural gas in Europe. The main external market for Russian natural gas is Western Europe, which accounts for almost three-quarters of this commodity's exports. At the same time, JSC "Gazprom" provides about a third of its total imports to Western Europe.
Traditionally, the Central European gas market plays an important role in Gazprom's export policy due to its geographic proximity to Russia and the dominant position of Russian gas on it. This market in 2008 accounted for more than a quarter of the Company's natural gas exports. The share of Russian gas in the consumption of this energy carrier in the region is estimated at about 60%. OAO "Gazprom" provides almost 90% of the total import of natural gas by the countries of Central Europe.