* Reserves $4.7 bln for 2013 refunds to European customers
* Says 2012 dividend safe at 7-8 roubles vs 8.97 in 2011
* Free cash flow seen at $1 billion in 2012
* Gas exports to Europe seen at 152 bcm in 2013
(Adds detail, analyst quotes)
By Olesya Astakhova and Vladimir Soldatkin
MOSCOW, Feb 8 Gazprom, the world's top
gas producer, expects to hand $4.7 billion in price cuts to
European consumers this year, company officials said on Friday,
and vowed to make good on dividend promises despite the cash
Customers and competitors have been pressing the
state-controlled company to cut its prices in Europe, where it
generates nearly 60 percent of its revenues from gas sales.
In response to falling demand due to Europe's economic
slump, energy efficiency drives and competition from liquefied
natural gas, especially in its main market, Germany, it has
amended long-term contracts with some European clients.
Gazprom set aside 133 billion roubles ($4.4 billion) for
2012 refunds, and said on Friday it paid out only $2.7 billion.
Analysts say price concessions to the likes of Polish gas
monopoly PGNiG, may help Gazprom rebuild its
one-quarter share of the European market, and meet its goal of
raising gas exports to Europe by 10 percent this year to 152
billion cubic metres (bcm).
"It looks like Gazprom may sell at least 150 bcm to Europe.
Last year was very bad for them, while they also offered some
discounts for their gas," Uralsib analyst, Alexei Kokin, said.
Sources have told Reuters that Gazprom may cut gas prices to
Europe this year to levels comparable to those on the spot
market, where prices undercut the formula linked to oil prices
in Gazprom's long-term contracts.
Rival suppliers such as Norway's Statoil have
adapted pricing policies proactively to increase gearing to
prices on Europe's increasingly active gas trading hubs.
Among other challenges, domestic rivals, led by independent
producer Novatek, want to overturn Gazprom's monopoly
on exporting gas, enshrined in a 2006 law. Novatek has been
lobbying for the rights to export liquefied natural gas by ship.
President Vladimir Putin's energy policy commission is due
to meet next Wednesday to discuss the Novatek proposal, which
reports suggest has won backing from Rosneft, the
state oil major headed by longtime Putin ally Igor Sechin.
CHALLENGING DIVIDENDS, SPENDING SPREE
Gazprom's declining cash flows have called into question its
ability to boost dividends while funding vast investment
projects, including plans to expand its pipeline export routes
that will cost tens of billions of dollars.
Analysts who saw an investor presentation in Moscow on
Friday said Gazprom aimed to pay 2012 dividends of 7 to 8
roubles per share, down from 8.97 for 2011. But for the current
year it expects dividends to rise to between 8 and 9 roubles.
The sources said Gazprom plans to post free cash flow of
only $1 billion in 2012, which may force it to borrow in order
to pay those dividends.
Gazprom shares fell 1.3 percent by 1230 GMT, underperforming
the wider market, which eased 0.8 percent.
Gazprom also said it expected 2012 net income to be $38
billion, down from $45 billion in 2011. It usually pays about 25
percent of net profit to meet Russian accounting standards.
The company has earmarked $40 billion for 2013 capital
expenditure, compared with $44 billion in 2012. But spending may
rise further as Gazprom tends to revise it upwards during the
course of the year.
Gazprom has directed the bulk of investment to develop major
fields, such as Bovanenkovo, in regions such as the Arctic's
Yamal Peninsula as it tries to stem any decline in gas output.
Gazprom has also embarked on a number of politically
motivated projects with dubious economic benefits, such as the
South Stream underwater pipeline, designed to bypass transit
states such as Ukraine through which its export pipelines run.
The company estimates the cost of the project at $39
billion, while some analysts say it may eventually rise to as
much as $55 billion due to needs to upgrade and expand domestic
pipelines to make them compatible with this link.
Gazprom reckons it has money left over to sponsor top-flight
soccer clubs Zenit St Petersburg and German Bundesliga team
Schalke 04, and spend as much as $2.4 billion on a 462-metre
tower in St Petersburg planned as its new headquarters.
Energy revenues in Russia are heavily taxed to fund social
spending. The government is also keen that high dividends are
maintained by state entities as another way of skimming income
from the energy industry.
($1 = 30.2350 Russian roubles)
(Additional reporting by Denis Pinchuk; Editing by Louise
Ireland and Douglas Busvine)