Articles by Lev Snykov, Senior Analyst



Gas Tariffs and Taxes on Agenda

  • 07 July 09
  • VTB Capital

While we expect a major recovery in gas sector fundamentals in the second half of 2009, there are two regulatory issues on the risk side of the story to be settled in the coming months. First, the government might increase the gas extraction tax next year. Second, we have yet to face the decision on gas tariff hikes in 2010, which might differ from that which was previously approved (increases of 13% in January and 12% in July 2010), capping gas tariff growth amid a weaker economy.

Is the Russian Gas Sector the Next to Rebound?

Russian gas production dropped 17 percent YoY in the first four months of 2009. With us expecting the industrial output to decline 9.5 percent in 2009 and the electricity demand to contract 5 percent, we see the Russian gas balance shrinking 12.6 percent this year. We forecast that Gazprom's gas production will go down 12.8 percent but that Novatek's output will remain flat in 2009, in line with the recent guidance from the company's CEO.