Bloomberg News

Gazprom Neft May Cut Spending Plan 25%, Reduce 2009 Oil Output

October 29, 2008

OAO Gazprom Neft, the oil arm of Russia's natural-gas export monopoly, may cut capital spending next year by as much as 25 percent, while oil output continues to fall.

The company may spend about 70 billion rubles ($2.6 billion) next year, compared with 85 billion rubles to 90 billion rubles this year, Finance Vice President Vadim Yakovlev told reporters at a conference in Moscow today.

The producer lowered its oil-price assumptions to $70 a barrel from $91 for next year, he said, citing global financial turmoil.

Spending cuts won't affect production, Yakovlev said, adding that output may fall ``slightly'' next year. Gazprom Neft plans to reduce funds for exploration, gas utilization and improving the quality of motor fuels, he said.

To contact the reporters on this story: Stephen Bierman in Moscow at sbierman1@bloomberg.net; Torrey Clark in Moscow at tclark8@bloomberg.net.

To contact the editor responsible for this story: David Merritt at dmerritt1@bloomberg.net


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