Gazprom cuts investments by 17 percent

MOSCOW, Sept. 4 (UPI) -- Russian energy monopoly Gazprom approved a 17 percent cut in its investment program, which it said was due to external pressure from the global recession.

The executive board at Gazprom said the reduction in its 2009 investment program and budget was due to "external factors" stemming from the "global financial and economic crisis," RIA Novosti reports.

Gazprom, meanwhile, said a substantial portion of the $6.8 billion it planned to borrow would go to purchase a 20 percent stake in Gazprom Neft, the oil division of the energy giant. That would bring its share in Gazprom Neft to 95.68 percent.

Gazprom posted a $3.5 million loss in the first three months of the year as operating costs soared nearly 20 percent.

In the three months ending March 31, Gazprom posted an 11 percent decline in gas sales, or roughly 416.7 billion cubic feet.

Officials noted the gas debt from Russian customers rose as the global financial crisis gripped regional economies, with debt to Gazprom rising by 27 percent compared with 2008 levels.

Analysts had said efforts by Gazprom to expand its global footprint in 2009 were in stark contrast to financial setbacks in the Russian market as sales plummet in the economic recession.