Gazprom feels bullish for 2010

MOSCOW, Nov. 25 (UPI) -- Russian energy monopoly Gazprom announced a 5.4 percent spending increase for its 2010 budget amid growing optimism for an economic recovery.

Despite the threat of losing a significant amount of capital from stiff customs duties, the gas giant announced plans to increase its investment spending to $27.9 billion for 2010.

Gazprom was forced to cut its investments for 2009 as the global economy plunged into recession. The modest spending increase is a sign Gazprom executives see indications of an economic recovery in 2010, the Moscow Times reports.

Extra customs duties imposed by federal authorities could translate to a $13.4 billion loss for Gazprom, though most of that is related to shortfalls in the ability to recover value-added tax, the report says.

Energy analysts in Russia said it was unlikely the losses would materialize in the gas sector, noting a failure to invest would have a ripple effect in the national economy.

Most of the investments for 2010 will cover capital expenses, though a portion would go toward acquisitions and pipeline development.