| Gazprom produces gas by returning assets Gazprom continues to collect assets lost under the previous leadership. Having dealt with the larger “pieces” of property, the concern began to work on the “remains”, which were quite interesting. This time the target was the Northgas company, which last year produced 4 billion cubic meters of gas at the North Urengoy gas condensate field, and this year plans to increase production by another 1 billion cubic meters.
The scheme of Northgaz's transition from one of Gazprom's subsidiaries (in this case, Urengoygazprom) to a third party is quite typical. On June 21, 1999, the meeting of Northgas shareholders decided to place additional ordinary shares among its founders (Urengoygazprom - 51% and Farco Group Limited - 49%) on a proportional basis. On the same day, this decision was approved by the board of directors of Northgas. In accordance with it, the Gazprom subsidiary had to pay for the shares with production wells, and Farco - in cash. However, according to representatives of the latter, the banks that financed the payment for the issue expressed doubts about the comparability of the cost of the wells and the package received by Urengoygazprom. On October 17, 2001, the arbitration court of the Yamalo-Nenets Autonomous Okrug satisfied the claim of Farco against Urengoygazprom and Northgas to recognize the agreement for the exchange of shares for wells as void, since the cost of the wells was not determined by the board of directors. After arbitration courts of all instances rejected Urengoygazprom's claims, 51% of the shares returned to Northgas. Already in 2002, the Farco group sold its shares in Northgas to the English company REDI Limited (according to the Northgas representative, it has nothing to do with the president of the company and the former owner of Farko Farhad Akhmedov), which currently owns a controlling stake gas production company. Farco itself was liquidated, and therefore Urengoygazprom’s claims to invalidate its purchase of its part of the additional issue were not accepted.
Nevertheless, the Federal Arbitration Court of the West Siberian District recognized Urengoygazprom's claim regarding the cancellation of the additional issue of Northgas shares as justified. Having won one of the lawsuits (although in principle the last verdict can be appealed by the Supreme Arbitration Court), Gazprom launched an offensive. In December, Urengoygazprom filed a cassation appeal with the same FAS ZSO to invalidate Northgas’s report on the placement of an additional share issue. The case will be heard tomorrow.
If we ignore the litigation, which may continue for quite a long time, especially considering the not very strong position of the plaintiffs, we get a rather interesting picture. In 2002, Gazprom faced the difficult task of increasing production from 512 billion cubic meters per year to 520 billion cubic meters. At the end of the year, Alexey Miller proudly reported that the required figure had been achieved. He did not specify that the concern received 13 billion cubic meters of almost 9 billion increments from the returned assets - Purgaz and Vostokgazprom. That is, in reality, even taking into account the commissioning of the first unit at the Zapolyarnoye field, the company’s production fell by 4 billion cubic meters. In 2003, Gazprom faces an even more ambitious task - to increase production to 530 billion cubic meters. In this regard, gaining control over Northgas (which, remember, is 4-5 billion cubic meters per year) will cover approximately half of the required production growth. The question is what will the management of the concern do when the lost assets run out and there is nothing to return by force. Gazprom must produce the same 530 billion cubic meters in all subsequent years, but Zapolyarny alone and several small fields in the Nadym-Purtazovsky region cannot compensate for the annually falling production of 25-30 billion cubic meters (this figure is prone to rapid growth). Alexey GRIVACHS |
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