It is known that the main indicator by which it is possible to determine prospects of this or that oil and gas company, are stocks of hydrocarbon raw materials. In size of explored reserves of gas Gazprom remains the leader among oil and gas corporations of the world. A share of the Group in world reserves makes 17%, in the Russian — 72%.

Stocks

As of December 31, 2015 reserves of hydrocarbons of the categories A+B+C1 of Gazprom Group in the territory of Russia made 36.15 trillion cubic meters of natural gas, 1,5 billion tons of gas condensate and 2.1 billion tons of oil. According to the DeGolyer and MacNaughton Company the proved and probable reserves of hydrocarbons of Gazprom Group on the international PRMS standards made 23.7 trillion cubic meters of natural gas, 933.3 million tons of gas condensate and 1.35 billion tons of oil. It is on 0.3 billion tons more than in 2014. Audit there passed objects which stocks in total made 94% of reserves of gas, 92.2% of condensate and 92.4% of oil of the categories A+B+C1. The gain of stocks due to prospecting works following the results of last year made: 531.1 billion cubic meters of natural gas, 68.5 million tons of gas condensate and 20.6 million tons of oil.

Production

In 2015 the Gazprom Group (without a share in production of the companies investments in which are classified as joint operations) reduced gas production on 5.7%, to 418.5 billion cubic meters. It was caused by decrease in gas taking by Gazprom consumers. Thus the actual maximum daily gas production in area of coverage of the Uniform System of Gas Supply during autumn and winter season of 2015/16 made 1.56 billion cubic meters (during season of 2014/2015 – 1.46 billion cubic meters). Thus, decrease in annual production did not affect opportunities of Gazprom Group to provide the necessary level of the maximum daily gas production during the periods of peak consumption. Gazprom can increase production as soon as demand increases with ease.
Oil production in the reporting year (without a share in production of the companies investments in which are classified as joint operations) made 36 million tons (on 0.7 million tons more than in 2014), including on Gazprom Oil Group – 34.3 million tons. Production of gas condensate on Gazprom Group made 15.3 million tons (higher than an indicator of 2014 on 0.8 million tons). The gain of production is received for the account of accumulation of capacities on the 1st and 2nd sites the achimovsky deposits of the Urengoy oil-gas condensate field. Taking into account a share of the Group in volumes of production of the companies, investments in which are classified as joint operations (1 billion cubic meters of natural and associated gas and 8 million tons of oil), production of hydrocarbons by Gazprom Group made 419.5 billion cubic meters of gas and 44 million tons of oil.
The associated companies and joint ventures in the share falling on Gazprom Group in 2015 extracted 25.5 billion cubic meters of gas, 4.7 million tons of gas condensate, 9.6 million tons of oil. Growth of gas production and gas condensate is caused by indicators of JSC Arcticgas under control of JSC SeverEnergia, and also increase of effective share of Gazprom Oil Group in this project from 45.1% to 46.67% in the middle of 2015.
The greatest gain of gas production was provided by Bovanenkovo gas field (Yamal Peninsula). In 2015 61.9 billion cubic meters of gas were extracted. That is on 19.1 billion cubic meters more than the level of 2014. Within implementation of the project of development of the Novoportovsky field oil shipment by sea during the winter period was for the first time carried out, drilling of an operational double-barreled well with horizontal trunks with the length 1 thousand meters, the first on the Yamal Peninsula, is completed.
Prirazlomnoye oil field is the only one project on the Russian Arctic shelf where industrial oil production is conducted. In July, 2015 Gazprom Oil put the second production well which output made 1.8 thousand tons per day into operation. In December of the last year on a field the million ton of oil was extracted and the third production well is put into operation.
On Kirinskoye gas and condensate field on the shelf of the Sea of Okhotsk gas production in 2015 made 0.6 billion cubic meters. Here works the only one underwater mining complex in Russia.

Export

Consumption of gas in the European foreign countries last year increased on 5.6% and made 512.8 billion cubic meters. Colder weather promoting growth of consumption of gas in household sector became the main reason of positive dynamics. Besides, reduction of prices of gas and increase of its competitiveness in relation to coal had positive impact. Industrial production of the largest economies of Europe in 2015 was characterized by mainly positive growth rates that promoted restoration of demand for gas as well in the industry.
Own gas production in the European countries in 2015 was reduced on 1.5% and made 262.6 billion cubic meters. Negative dynamics is in many respects caused by reduction of production level in the Netherlands on 14.5 billion cubic meters or on 23.1%. In two other largest manufacturing countries, Great Britain and Norway, on the contrary, production growth was noted.
In 2015 the Gazprom Group realized 184.4 billion cubic meters of gas to foreign countries, the net proceeds from sale (minus excise and the customs duties) made 2.17 trillion rubles, having increased in comparison with 2014 on 23.6%. Thus the volume of realization of gas PAO Gazprom to the countries of the European foreign countries under contracts of JSC Gazprom Export last year made 158.6 billion cubic meters, having shown growth on 12 billion cubic meters or on 8.2%, to the level of previous year. An average price of realization of gas by PAO Gazprom made 243.3 dollars for 1 thousand cubic meters. The price of the gas delivered under long-term contracts included services in its delivery to the buyer according to daily demands. The price of contract gas includes an award for reliability and flexibility of deliveries — in comparison with the price of the gas realized on trading floors which in this case is delivered by equal parts during all period of validity of the contract.
To directly end users subsidiaries of Gazprom Group in the markets of Great Britain, the Netherlands, France, Belgium, Germany, Austria, the Czech Republic, Ireland, Hungary, Macedonia and Romania realized 7.1 billion cubic meters of gas (a gain of 3.4 billion cubic meters). Growth of indicators is connected with expansion of presence of Group in the markets of continental Europe and Ireland mainly due to establishment of control over the WINGAS and WIEH companies.
Work in the market of the end user increases marginality of sales of gas. Gas supply to end users in the markets of Bulgaria, Italy, Romania, Serbia, Slovakia, Turkey, Finland and the Czech Republic carried out also associated and in common controlled companies.
In 2015 Gazprom tested a new mechanism of sales of gas in Europe — gas auction. This form of sales is urged to become the additional tool to system of long-term contracts. Auction was carried out in September with supply of gas during the winter-2015/16 to some points of delivery in Northwest Europe at the choice of buyers. The mechanism of auction trade can be used for implementation of additional balancing sales depending on market condition in addition to a portfolio of long-term contracts. In the future expansion of geography of auction deliveries is planned.
Within diversification of routes of export supply of the Russian pipeline natural gas to the European market, traditional for PAO Gazprom, the project of expansion of capacities of the existing Nord Stream gas pipeline — Nord Stream-2 is initiated. The new gas pipeline from Russia to Germany through the water area of the Baltic Sea will consist of two threads with a capacity of 27.5 billion cubic meters everyone. The target markets of the project are the countries of the Western and Central Europe.
The volume of realization of the liquefied natural gas by Gazprom Group last year grew on 6.2% and made 3.56 million tons (4.75 billion cubic meters).
In 2015 the Group realized 40.3 billion cubic meters of gas to the countries of the former Soviet Union, the net proceeds from sale (minus the customs duties) made 429.7 billion rubles, having increased in comparison with 2014 on 4.4%.
Within realization of geographical diversification of supply of the Russian gas much attention is paid to projects of supply of pipeline gas to China. In full accordance with the schedule construction of the Force of Siberia gas pipeline assuming transportation of gas of the Yakut and Irkutsk centers of gas production to consumers in the Russian Far East and in China is conducted. The project is realized for the purpose of performance of obligations of the contract for delivery of the Russian pipeline gas to China signed in 2014 along «east» route. The contract is signed for the period of 30 years and assumes delivery of 38 billion cubic meters of gas a year. The contract of purchase and sale of gas came into full force in May, 2015. Thus, the beginning of supply of gas to China along «east» route will take place during the period from 2019 to 2021.

Domestic market

In 2015 consumption of gas in Russia made 444.3 billion cubic meters that is on 3.1% below than the level of 2014. Abnormally warm weather conditions during the whole year and also decrease in the level of industrial production and energy consumption in connection with preservation of the crisis phenomena in economy became major factors of reduction of gas consumption.

REFERENCE: a share of natural gas in power balance of Russia in 2015 made 52.5%, without having changed significantly in recent years. The main consumers of natural gas in Russia are electricity generation and heat production (37%), the population (12%), household sector (9%), oil industry (8%) and metallurgy (6%). According to the current legislation in the Russian market gas is realized to consumers at the regulated and unregulated prices. The dominating supplier of gas at regulated prices is PAO Gazprom.

In 2015 the Group realized to consumers of the Russian Federation 221.2 billion cubic meters of gas, the net profit from sale (minus the VAT) made 805.6 billion rubles, having decreased on 1.8%. Sales of gas in Russia made 50% of the total amount of sale and about 24% of total sales of gas sales.
Gazprom continues implementation of the large-scale project of gasification of Russia. In 2015 27.6 billion rubles were invested in gasification. Level of gasification across Russia for the beginning of 2016 averaged 66.2%, including in the cities – 70.4%, in rural areas – 56.1%. Last year construction of 87 gasification facilities and gas supply with a general extent of 1.3 thousand km in 34 subjects of Federation was completed. Conditions for gasification of 41.8 thousand households and apartments, 263 boiler rooms in 206 settlements which will be installed gas in full on condition of absolute performance by administrations of regions of the obligations for training of consumers for gas reception are created.
Last year the complex of autonomous gasification of liquefied natural gas of consumers of Karagaysky, Sivinsky and Ilyinsky regions of Perm Krai with application of technologies of liquefaction of natural gas on local installation of 100% of liquefaction was launched. Implementation of the project gave a chance to install gas in 2.2 thousand households and ten boiler rooms in settlements where construction of systems of gas supply and gas distribution is unprofitable because of their remoteness.
As of December 31, 2015 the overdue receivables of consumers for the delivered natural gas of Gazprom Mezhregiongaz Group made 152.1 billion rubles (the population share is about 40%). Within a year the debt grew on 25 billion rubles. The main debtors are North Caucasus federal district – 67.4 billion rubles (including the Republic of Dagestan — 30 billion rubles, .Chechen Republic – 11.8 billion rubles) and .Tver region – 10.6 billion rubles. Distribution of the volumes of investment for the next years depends on repayment of debt with the region for delivered natural gas. The Program of gasification of Russia for 2016 included 67 regions, investments in 25 billion rubles are provided.
Independent producers of gas carry out deliveries to domestic market at the contractual (unregulated) prices therefore possess bigger price flexibility and as a result realize gas in the bonus markets in the Russian Federation, actively winning new, mainly large (solvent) consumers. Independent producers prefer delivering gas first of all to industrial consumers to regions with the increased profitability. Besides, they are not obliged to satisfy, unlike PAO Gazprom, peak demand that gives them a chance to form a stable profile of production; bear lower tax burden owing to what the structure of prime cost of independent producers of gas has a smaller share of not reduced expenses and a big marginal component; have priority access to gas-transport system of PAO Gazprom in case of supply of the dry stripped gas received as a result of processing of associated oil gas.

Underground storage facilities

For December 31, 2015 total active capacity on arrangement of the Russian underground gas storages of the Group reached 73.6 billion cubic meters. Maximum daily productivity is recorded on January 8, 2015 and made 432.9 million cubic meters. Potential daily productivity increased on 19.5 million cubic meters, having reached 789.9 million cubic meters.
Last year contracts for storage in underground storage facilities of Austria, Germany, Hungary, Great Britain and the Netherlands acted. Capacities of JSC Gazprom Export for storage of gas in the countries of Europe made 5 billion cubic meters and daily productivity is 61.5 million cubic meters. In 2015 in underground storage facilities of the countries of Europe JSC Gazprom Export pumped 2.9 billion cubic meters of gas and total selection made 4.1 billion cubic meters.
In the territory of former Soviet Union the Gazprom Group operates three objects of storage of gas in Belarus (Pribugsky, Osipovichsky and Mozyrsky underground storage facility), one is in Armenia (Abovyansky station of underground storage of gas) and also uses capacities of underground storage facility Inchukalnskoye in Latvia. As of December 31, 2015 the operational reserve of gas in the countries of former Soviet Union made 2.8 billion cubic meters of gas, daily productivity — 56 million cubic meters. Last year in underground storage facilities of the countries of former Soviet Union 2.5 billion cubic meters of gas were pumped and total selection made 2.1 billion cubic meters. Foreign and Russian underground storage facilities works in the uniform mode. In case of increase in export supply of gas during autumn and winter period foreign underground storage facilities come to maximum productivity for gas supply to consumers, Russian gas storages also increase productivity during the same period.
Plans of Gazprom provide further development of underground storage of gas in the territory of Russia for the purpose of achievement in the long term of the volume of daily selection at the level of 1 billion cubic meters that will allow lowering costs of commodity transport work on 10-15% and cost of supply of gas to the consumer — on 5-10%. In the east of Russia creation of underground storages of helium concentrate is planned, which is necessary for solution of a problem of complex development of fields of the region.
Important task is accumulation of capacities of underground storage facilities of the Group Gazprom in foreign countries before achievement of active volume not less than 5% of annual volume of export deliveries till 2030. Thus the priority is given to own capacities of underground storage facilities that are infrastructure objects with share property of Gazprom Group.

Processing

For ensuring processing of perspective volumes of the liquid hydrocarbon raw materials received in the course of gas production on gas-condensate fields of Western Siberia expansion and reconstruction of the Urengoy plant on preparation of condensate for transport with finishing capacity to design, creation of objects of preparation and transport of condensate of achimovsky deposits and oil, completion of construction of unfinished sites of condensate pipeline Urengoy-Surgut and also reconstruction and modernization of productions of the Surgut condensate stabilization plant is planned.
PAO Gazprom on the principles of a project financing continues implementation of the project on creation of gas-chemical complex near Novy Urengoy the main raw materials for which will be gases of condensate deethanization of fields of Nadym-Pur-Taz region. The events directed on improvement of products quality are held: building of installation of isomerization of pentane-hexane fraction on the Surgut condensate stabilization plant, modernization of production of motor fuels on the Astrakhan gas processing plant, providing decrease in the content of sulfur in the received product and achievement of quality of Euro-4 and Euro-5.
Design of Amur gas processing plant (around Svobodny town, Amur region) where on the Force of Siberia gas pipeline gas of the Yakut and Irkutsk centers of gas production created by Gazprom within implementation of East gas program will arrive. The term of commissioning of the first start-up complex of Amur gas processing plant is synchronized with the beginning of supply of gas to China on the Force of Siberia gas pipeline.