Gazprom To Borrow $100 Billion Rubles to Finance Exploration

Gazprom plans to borrow an estimated $100 billion rubles to finance exploration projects and increase gas output in 2002. The government, as Gazprom's largest investor with 38.4% is set to review investment plans this week. The plans call for an investment of 169 billion rubles for increasing 2002 production by 1.6%. Gazprom owns a fifth of the world's gas reserves and is seeking to boost supplies to Europe by 60% to as much as 205 bcm by 2010.

Because the company lacks the financial strength to back the move, it is seeking government approval to borrow money and dispose of assets so it can raise the capital to finance its plans. The company plans to dispose of non-core assets, increase domestic gas prices and cut operating costs. The proposal has earmarked 65.2 billion rubles to build 1, 550 kilometers of pipelines and 14.7 billion rubles for new exploration projects. Gazprom is due to submit its revised 2002 investment program to the government by January 10, 2002.