DEAUVILLE (Thomson Financial) - Russian gas utility Gazprom aims to become the world's biggest company with market capitalisation of $1 trillion within 7 to 10 years, chief executive Alexei Miller told a press conference in Deauville, northern France.
Speaking at a rare strategy presentation, Miller said he is "sure" the utility can become the world's biggest company and has reasons to believe it can be achieved.
He said the company's strategy is based on building up production volumes that meet demand, extraction in new regions such as eastern Siberia, the far eastern regions of the Russian shelf of Arctic seas.
"It will not end here, but our strategy is being built on the diversification of markets," he said.
Miller sees investments at about $30 billion by the end of this year and expects continued growth to 2010.
On oil, Miller said the company has been working in the sector for a short time, but sees oil extraction to reach 100 million tonnes a year by 2020 from the current 80 million tonnes.
The company is "attentive" to proposals from foreign partners, which are of importance for the group's long-term development strategy.
Miller said Europe remains the company's "number one market" but it is also "working hard" on growth in Asia and northern U.S.
He also said the internal market is a priority for the group, and sees profitability matching that of its export market within three to four years.
On Europe, Miller said the company can supply 550 billion cubic metres a year of gas to northern Europe, including Belgium, France, Germany, and the UK.
"When needed, capacity to Austria will go up," he added.
Miller said since demand for gas in Europe is growing so fast, the utility's South Stream gas pipeline project is "no threat" to the Nabucco pipeline.
Miller added Slovenia and Austria can take part in the South Stream project.
On Monday, Gazprom's deputy chief executive Alexander Medvedev was cited as saying Russia and Austria plan to sign an intergovernmental agreement, which will let the country join the project.
Turning towards the company's relationship with the European Union (EU), he said he was concerned about "some protectionist tendencies".
He said the European Commission's so called "anti-Gazprom clause" in its energy liberalisation package prevents investments which are necessary to satisfy growing demand and ensure security of supply.
"We are not the only company thinking (in this way). We will coordinate efforts with our partners because we do not want to find ourselves in conditions of energy deficit and the de-industrialisation of the continent," he said.
Miller stressed international cooperation was the best way to defend gas supply interests and was the reason behind the group's joint projects with European partners like Eni SpA. and E.ON AG.
Miller sees this "new level" of cooperation with European partners as a model for advancing energy security in Europe.
Alexander Medvedev, deputy chairman of Gazprom's management committee said the idea the company is a threat to Europe does not make sense as it would not invest money to eventually shut off gas supplies.
The company is not putting pressure on the EU and its neighbours for political reasons and dismissed the idea as "absurd".
"We are open to cooperation and hope a reasonable approach in Europe will win and Gazprom will continue to cooperate for many many years to come," Medvedev said.
Turning to gas prices, Medvedev said it was difficult to make forecasts but said it would be "naive" to expect to see low gas prices in Europe.
On the company's speculated interested in a 50 percent stake in Russian-British oil venture TNK-BP, Medvedev said when the company's internal conflict is solved, Gazprom will consider the acquisition.
TNK-BP is 50-percent owned by British oil giant BP and 50-percent owned by three Russian investors, represented by the Alfa Access Renova group.
A series of recent legal probes have been launched against TNK-BP, moves interpreted by many analysts as increasing pressure for a sale. Medvedev added that an agreement with Serbia over the sale of the country's biggest refinery to Gazprom unit Gazpromneft will be ratified soon.
The deputy chief said the company recently met with Serbian representatives and has their assurance that a deal will be struck soon.
The chief executive of Gazprom Marketing and Trading, Vitaly Vasiliev, said the company will be able to deliver liquefied natural gas production of 22-23 billion cubic metres a year by 2020.
He said that the group's extraction rate will grow by 4 percent by 2012.
Responding to speculation over Gazprom's interest in a partnership with ConocoPhillips in an Alaskan pipeline project, Vasiliev said the group was "not discussing Alaska" but is ready to partner if good proposals are on the table.
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