Gazprom To Be World's Biggest Firm.

Gazprom, the state-controlled gas export monopoly, aims to quadruple its market value to $1 trillion within a decade. Bloomberg on April 10 quoted Gazprom Deputy CEO Alexander Medvedev as saying: "We will reach a $1 trillion market capitalization in a period of seven to 10 years. We'd like to be the most-valued and most-capitalized company in the world".

$1 tn would be more than twice ExxonMobil's value, now the world's largest publicly traded firm at $439.6 bn, and would exceed Russia's 2006 economic output which was $975 bn. It would surpass the GDP of countries including the Netherlands, Australia and South Korea. Gazprom, the world's biggest gas producer, has more than eight times ExxonMobil's energy reserves and is seeking more. The state-run company is developing the Shtokman field the Arctic, Russia's largest untapped gas deposit, which will begin exporting LNG in 2014 - or by 2015/16.

Medvedev said: "I believe it's a reasonable target that we'll double our market cap" from its current $244 bn in five years. Gazprom's shares in London climbed 60% in 2006, outpacing a 36% increase for ExxonMobil. President Putin has used Gazprom, in which the government owns more than 50%, to bolster the state's control of the economy and expand Russia's influence abroad. Gazprom CEO Alexei Miller was in Doha for the latest GECF ministerial meeting on April 9-10.

Gazprom, with 17% of the world's gas, had 184.5 bn barrels of oil equivalent in reserves as of 2004. A $1 tn figure would value those reserves at about $5.50/b. ExxonMobil had reserves of about 21 bn barrels of oil equivalent as of 2004 and 22.1 bn in 2006. The 2006 figure values ExxonMobil's reserves at almost $20/b.

Steven Dashevsky, head of research at Aton Capital in Moscow, says: "Gazprom does have the potential if the management were willing to implement reforms and cost-cutting. You can see very little of what the Gazprom management has done to make the business more valuable". Gazprom, which supplies 25% of EU gas, has benefited from rising exports and higher prices for gas supplied to former Soviet republics. It plans to begin supplying East Asia in 2008 from Sakhalin.

Qatar is the world's largest LNG exporter and is to expand its capacity to 77m t/y by 2010, accounting for a third of projected world supply by then. World demand for LNG in 2006 was about 158m t/y.