President Vladimir Putin discussed the state of Gazprom and prospects for its development with Gazprom CEO Alexei Miller.
Mr. Putin said that Gazprom must ensure the profitability of sales inside Russia without putting consumers in a difficult situation.
Mr. Miller said that increasing the profitability of the company's sales inside Russia was the company's top priority.
"The government has adopted a principled decision to raise tariffs," Mr. Miller said, "however, the dynamics of metal prices is such that Gazprom cannot yet overcome the level of zero profitability." He noted that this situation did not contribute to increasing gas supplies to domestic industry.
"In regard to this," he continued, "the issue of new prices must become key in Gazprom's dialogue with the government because if the current trends continue, Gazprom will be just increasing its losses."
According to Miller, last year was Gazprom's the most successful year ever. The company reached record indices in both production and finance, he noted.
Mr. Miller informed the president that in 2003, the growth in the company's gas production was about 20 billion cubic meters, while the total volume reached 540 billion cubic meters.
"This year," he said, "we are planning to commission two times more gas distribution systems than we commissioned last year." In 2003, 1,300 kilometers of gas distribution systems were commissioned and in 2004, 2,600 kilometers are planned to be commissioned.
"Presently Gazprom is entering a qualitatively new stage of development as an international vertically integrated company that is a leader on the international energy market," stated Mr. Miller.
He informed the president about the company's work with foreign partners, stressing that the company has returned to all the republics of the former Soviet Union.
The implementation of the comprehensive program Central Asia-Center is underway and the company has already signed important agreements with Ukraine to form a long-term joint gas balance. The agreements specify the conditions of work in the gas sphere until 2028.