Gazprom, the Russian natural gas export monopoly, aims to quadruple its market value to $1 trillion within a decade, the company has said. "We will reach a $1 trillion market capitalization in a period of seven to 10 years," the deputy chief executive, Alexander Medvedev, said during an interview in Moscow on Friday. "We'd like to be the most-valued and most-capitalized company in the world."
A $1 trillion market value would be more than twice that of Exxon Mobil, now the world's largest publicly traded company at $439.6 billion, and would exceed Russia's total 2006 economic output, which was $975 billion.
It would also surpass the gross domestic product of countries including the Netherlands, Australia and South Korea.
Gazprom, the world's biggest gas producer, has more than eight times Exxon Mobil's total energy reserves and is seeking more. The state-run company took control last year of Royal Dutch Shell's Sakhalin-2 venture, which plans to start shipping liquefied natural gas in 2008. It is also developing the Shtokman project in the Arctic, Russia's largest untapped deposit of the fuel.
"I believe it's a reasonable target that we'll double our market cap" from its current $244 billion in five years, Medvedev said. The company's shares in London climbed 60 percent last year, outpacing a 36 percent increase for Exxon Mobil.
The Russian president, Vladimir Putin, has used Gazprom, in which the government owns more than 50 percent, to bolster the state's control of the economy and expand Russia's influence abroad. The Gazprom chief executive, Alexei Miller, was in Doha, Qatar, on Monday for a meeting with gas-producing countries including Iran, which has the world's second-biggest natural gas reserves after Russia, at the Gas Exporting Countries Forum.
Gazprom, which controls about 17 percent of the world's natural gas, had 184.5 billion barrels of oil equivalent in reserves as of 2004, according to filings. A $1 trillion figure would value those reserves at about $5.50 a barrel. Exxon Mobil, based in Irving, Texas, had reserves of about 21 billion barrels of oil equivalent as of 2004 and 22.1 billion last year. The 2006 figure values the company's reserves at almost $20 a barrel.
"Gazprom does have the potential if the management were willing to implement reforms and cost-cutting," said Steven Dashevsky, head of research at Aton Capital in Moscow. "You can see very little of what the Gazprom management has done to make the business more valuable."
Gazprom, which supplies a quarter of European gas, has benefited from rising exports and higher prices for natural gas supplied to former Soviet republics. It plans to begin supplying East Asian customers next year from Sakhalin.
Qatar is the world's largest LNG exporter and plans to expand capacity to 77 million metric tons by the end of the decade, accounting for a third of the projected world supply in 2010. Ras Laffan Liquefied Natural Gas in Qatar said last month. Demand for liquefied natural gas was about 158 million tons last year, according to Andy Flower, an independent consultant in Britain. The company is renewing talks with possible partners for the Shtokman field and plans to start LNG output by 2014, Medvedev said. But according to Mikhail Korchemkin, director of East European Gas Analysis in Malvern, Pennsylvania, which analyzes production and pipeline projects in the former Soviet Union, delays at Shtokman make it unlikely the field will be producing LNG by 2014. A more likely starting date would be 2016 or 2017, he said.
(International Herald Tribune, 10/04/2007)