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Energy

Gazprom says unhurt by financial crisis-report

MOSCOW, Sept 24 (Reuters) - Russia's Gazprom GAZP.MM, whose debt bill exceeds $50 billion, has not suffered in the global financial crisis and is confident it will be able to fund all its projects in due course, its chief executive was quoted as saying in business newspaper Kommersant on Wednesday.

The capitalisation of Gazprom, the world’s largest gas producer and supplier of a quarter of Europe’s gas needs, almost halved to $193 billion last week with the dive in the Russian share market.

“We see no risks for the company. The interest from financial credit institutions wanting to lend to Gazprom is as big as it was before the crisis,” Kommersant quoted Alexei Miller as saying.

“That is why this crisis has not touched Gazprom at all. We are firmly standing on our feet, we are financially stable and will fund our investment programme which is rising from year to year,” said Miller, who was speaking during a trip to the gas-rich Yamalo-Nenets region.

Gazprom, which usually revises its investment programme several times a year, is expected to consider increasing it soon from the earlier approved 821.7 billion roubles ($33 billion) for this year.

DEBT SITUATION IMPROVEMENT

A source close to Gazprom’s board of directors told Reuters the gas company was planning to cut its huge debt this year. The source said Gazprom, whose board is expected to discuss the debt situation at a meeting on Sept. 30, plans to “cut the debt to the level of the previous years”, but did not elaborate.

Gazprom's consolidated debt stood at 1.2 trillion roubles ($48 billion) at the end of 2007, up 52 percent on a year earlier, after the company acquired control both of the major Sakhalin 2 offshore Pacific project and of Moscow utility Mosenergo MSNG.RTS.

Kommersant quoted documents prepared for the meeting as showing that the firm was by the end of this year going to cut its consolidated debt, comprising the debts of all its subsidiaries, to 920 billion roubles, the same amount as Gazprom’s head company had at the end of last year.

A part of the reduction, 360 billion roubles, is expected to be written off from Gazprom’s balance sheet after the gas company cuts its stake in Gazprombank, once its main banking arm, said the paper.

Kommersant also said that, according to the documents, Gazprom plans to refinance or repay from its own funds most of the debt taken on in 2007 and is also not planning any acquisitions before the end of the year. (Reporting by Tanya Mosolova; Editing by Greg Mahlich)

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