Bloomberg News

ING Groep NV Cuts Gazprom Target Price on Extraction Tax

April 11, 2012

The 12-month target price for OAO Gazprom’s (OGZD) London-listed depositary receipts was cut to $15.30 from $17 by ING Groep NV on speculation the Russian government may link the company’s mineral extraction tax rate to natural gas prices.

ING maintained its recommendation that investors buy the shares, Igor Kurinnyy, a London-based analyst at the bank, said in an e-mailed report dated April 10.

“We maintain our ‘buy’ rating as we think this risk is already reflected in the share price,” Kurinnyy said in the report. “Risks of tax hikes weaken the investment case for Gazprom. While it is almost certain that the tax load on Gazprom will continue to rise, the extent and timing of tax hikes has yet to be decided.”

Russian Finance Minister Anton Siluanov said in Moscow the mineral extraction tax rate for Gazprom may be decided this week, RIA Novosti reported on April 6. The government intends to raise the tax from 2013, RIA said.

To contact the reporter on this story: Halia Pavliva in New York at

To contact the editor responsible for this story: Emma O’Brien at

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