Gazprom sparks 2008 capital spree

Russia's gas export monopoly Gazprom will increase capital investment by 43% in 2008 to a record level of almost $20 billion as it speeds up development of Arctic fields and new pipelines.

Gazprom has prioritized equity investment over capital expenditures for several years because of massive new asset purchases despite investor criticism over inadequate new -production investment amid stagnant mature-field output in Siberia. The world's largest gas producer said its state-controlled board had approved its capital investments, which will rise to a record of 479.4 billion roubles ($19.41 billion) in 2008 from 335.5 billion roubles in 2007 and 324.9 billion in 2006.The capital investments will be equally split between gas production and transportation. Long-term financial investment will fall by 48% to 230.7 billion roubles from a record of 443.86 billion in 2007 and 133.7 billion in 2006. The company, which has a total long-term debt including affiliates of around $45 billion, making it Russia's most indebted company by far, will borrow 90 billion roubles next year.
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