MOSCOW: Russia's Gazprom increased its share of the domestic market in the first quarter, but by less than the company had targeted, Kirill Seleznev, a member of the company's management committee, told a briefing on Tuesday.
He did not provide a figure for Gazprom's market share in Russia, where Gazprom faces competition from state oil company Rosneft and Novatek, the country's second-largest gas producer.
"We have quite a big potential ... to add new customers. So we forecast an increase of Gazprom's share on the domestic market... But, as you understand, given the current economic situation this increase was not as big as we wanted," Seleznev said.
Gazprom sells half of its gas domestically and half to foreign customers. But the exports account for the bulk of the company's revenue because export prices are usually higher than at home, and the sales are in US dollars.
Last year, Gazprom supplied 221.2 billion cubic metres (bcm) of gas to the domestic market. However, its supplies to Russian customers were down 5.5 percent compared to 2014, because of lower consumption.
Seleznev said Gazprom will supply 10 bcm under new contracts in Russia this year, including to customers in the Republic of Bashkortostan, the Sverdlovsk region and in the Nizhny Novgorod region.
PRICING
The average Gazprom gas price in Russia was 3,641 roubles ($56) per 1,000 cubic metres, up 3.8 percent year-on-year, in 2015. Its prices are state-regulated, while Rosneft and Novatek have more flexibility to set prices.
Rosneft, the world's top listed oil firm by output, plans to produce 100 bcm of gas per year by 2020, up from almost 63 bcm last year. Rosneft accounted for around 16 percent of the market in Russia in 2015, with Novatek holding another 20 percent.
Analysts expect market leader Gazprom's share to gradually fall to just over half by 2020 on rising competition.
Both are challenging Gazprom's monopoly on exporting gas via pipelines. Gazprom has so far protected its monopoly, saying any change would harm Russian state revenue.
The price Gazprom charges for gas sold to Europe is linked to oil, and as it lags oil price movements by six to nine months, it remains at low levels.
As a consequence, the level of profit Gazprom makes on exports is now close to the margin it earns from domestic sales, Interfax news agency quoted Gazprom deputy chief executive Valery Golubev as saying last month.
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