the Company admits the decline in exports and a reduction of the investment by 20% this year.

Gazprom expects a significant decline in exports of pipeline gas compared to the previous year, reported on 29 April the head of the economic and financial Department Alexander Ivannikov, commenting on the statements of the company according to IFRS for 2019. “We hold weekly produce enlarged recalculation of the budget and look at the situation. Today we consider the budget based on the following scenarios: export — 166.6 billion cubic meters, the price of the average $133 per 1000 cubic meters”. These values, of course, is far from final, said Ivannikov: “We do not treat this as a dogma, and numbers are adjusted as the situation changes in the market.”

In 2019, “Gazprom” has put to Europe (including Turkey) 199,2 billion cubic meters of gas, with an average sale price of about $204 per 1,000 cubic meters, the Export revenue of Gazprom from these deliveries amounted to about $40.8 billion But since the start of 2020, the company faced a number of challenges in its key export market.

the ruble equivalent amount of the loss in revenue compared to last year may be about 1.4 trillion rubles (at the exchange rate on April 24).

Operating with terms close to investors and financiers, Ivannikov has explained the potential decline in financial performance the occurrence of “black Swan”, where not one but several. Amid abnormally warm winter and excess fuel reserves in underground storage facilities, spot quotations of gas on European trading floors already by mid-February, has fallen in half to $100 per 1,000 cubic meters, the Average selling price of “Gazprom” under long-term contracts are higher than spot benchmarks by an average of $35-36, spoke in February in charge of export Deputy CEO Elena Burmistrova.

However, these dynamics had already forced Gazprom to adjust expectations for 2020 Current at the beginning of February, the forecast average export price for the year was $175-180, said Burmistrov. Even while maintaining the volumes of supply, such a decrease compared to the budgeted 2020 $200 per 1,000 cubic meters, the company faces the loss of about 100 billion rubles., pointed out supervising the financial block, the Deputy Chairman of the Board Famil Sadigov. The size of the budgeted provision for possible changes in the market situation — about 676,5 billion rubles., said Sadigov.

temperature anomalies and record reserves in the European UGS problems of “Gazprom” in 2020 has not ended.

at the beginning of the pandemic COVID-19 and attempts to limit the spread of the virus regulatory restrictions in Europe decreased gas consumption. Which in turn together with excess supply has led to continued drop�� prices in the market. The falling demand noted in all sectors, except utilities, said Ivannikov. By the end of March on the Dutch TTF, the futures price for delivery at the month ahead fell below $90 per 1,000 cubic meters., and by April 24 had fallen to $66 (data platform Intercontinental Exchange).

“Gazprom” does not expect a quick recovery of the market, the words Ivannikova. By mid-summer the price of supplies may be reduced to the level of about $70 per 1,000 cubic meters, made it. But in the fall, closer to the end of the year you can count on the trend change and price recovery to a level of about $130, said Ivannikov, referring as a reference point in the forward curve.

In the budget group “Gazprom” by 2020, it was established in the amount of 1.6 trillion rubles. Now we are talking about the possibility of reducing these costs by 20% to $ 1.3 trillion, said Ivannikov. However, while this is only one scenario, he said the actual decision will be made on the results of the first half. As a rule, “Gazprom” adjusts the parameters of the budget in the late summer — early fall. Even in this case, it is not about the rejection of projects as such and about the possible transfer of these costs for the next years, said Ivannikov.

in addition to the possible reduction of the investment to 316 billion rubles of which up to 100 billion roubles could come in “Gazprom oil” “Gazprom” expects to save up to 140 billion rubles at the expense of optimization of operating costs, including by reducing tax deductions. The increase in revenues from sales on the domestic market will give the company an additional 40 billion rubles., expect in the company.

Arthur puffins