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. Last Updated: 07/27/2016

Miller Says Gazprom Profits Will Hit $3.4Bln

Gas giant Gazprom hinted Friday that it expected net profit of at least 100 billion rubles ($3.4 billion) in 2001 and said output boosts would be gained by opening a new major field by year-end.

CEO Alexei Miller, who was appointed just over 100 days ago, told a meeting with shareholders that profit forecasts were based on strong financial performance so far this year. "In 2001, Gazprom has demonstrated significantly improved financial indicators," a Gazprom press release quoted Miller as saying at the meeting. "Forecasts by analysts indicate that if current price trends continue, net profits at the end of the year could be at least 100 billion rubles."

Gazprom's news service was not able to say if the 100 billion ruble figure was an official target or whether Miller agreed with it. The company had a first-half profit of 60.7 billion rubles under Russian accounting standards, which differ considerably from international ones.

News agency Prime-Tass quoted Miller as also saying that by the end of the year, Gazprom would open the last of the major gas fields in Russia's far north, Zapolyarnoye.

"There are no more prospects for gas fields on dry land. Thus, in order to support output, Gazprom will have to go onto the continental shelf," he said.

Miller said developing fields on the continental shelf in the Arctic, including the Shtokmanovsky field, would cost about $10 billion. "However, research in traditional production regions indicates that middle-sized fields could be found, which would allow us to break the trend toward falling output," Miller said.

"Special attention to traditional production regions is of special importance, as they already have an existing infrastructure, which would allow a significant cut in costs, especially on new gas fields."

Miller was referring to analysts' expectations that new fields in Gazprom's traditional production areas may remain to be uncovered.

Miller also said Gazprom would take part in the construction of a pipeline from Iran to India as part of plans to diversify export routes.

The prime ministers of Hungary and Slovakia expressed interest Friday in Poland's efforts to become less dependent on Russia's supplies of natural gas, The Associated Press reported.

During a business forum in the Polish town of Krynica, Prime Minister Jerzy Buzek informed his counterparts from Hungary, Slovakia and the Czech Republic that Poland could supply their countries after signing agreements with Norway and Denmark for North Sea gas.

Poland and Denmark signed a deal in July to build and operate a 230-kilometer-long pipeline from Danish Zealand to Poland's Baltic coast at a cost of up to 350 million euros ($300 million). On Monday, Poland signed a deal with Norway for gas supplies to begin in 2008.

"It is possible for Poland to supply neighboring countries with gas flowing directly from Norway and Denmark," Buzek said. Both gas deals allow Poland to re-export the gas.

Hungarian Prime Minister Viktor Orban said Hungary had other options to diversify away from Russian gas imports. "Nothing has been decided yet, but we are happy to have another supply possibility," he said.

Slovakian Prime Minister Mikulas Dzurinda praised Poland's "noteworthy" gas supply agreements and said they would be carefully examined with an eye for his country's still unresolved aim at reducing its reliance on Russian imports.