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Last Updated: Friday, 7 July 2006, 21:26 GMT 22:26 UK
Russia's Gazprom profits rocket
Gazprom logo in Moscow
Gazprom's monopoly was recently strengthened in Russia's parliament
Russian energy giant Gazprom saw profits rocket by 49% in 2005, boosted by more gas sales and higher prices.

Net profits reached 311.1bn roubles ($11.6bn; 6.2bn), from 209.4bn roubles one year earlier, the firm stated.

But the soaring results were less than analysts had expected and Gazprom shares traded 2.48% lower afterwards.

The results come in advance of G8 talks of the richest nations, to take place in Russia next week, at which energy security will be a critical issue.

Stronger monopoly

While the results were less than expected, analysts say they will not be altering their price targets for Gazprom - the largest gas producer in the world.

While gas sales increased by 2.8% in volume in 2005, revenues shot up by 42% to hit 1.384 trillion roubles.

However, Gazprom's net debt increased by 60% to over $28bn after spending more than $13bn to buy oil firm Sibneft.

The firm's huge reserves of natural gas mean it still has huge growth potential, analysts say.

Gazprom controls all of Russia's gas export pipelines and 90% of production.

And two days ago, a bill strengthening Gazprom's monopoly of exports was approved by Russia's lower house of parliament.

The bill requires that all Russian gas exports run through state-owned pipes - which all belong to Gazprom.

Access to markets

Europeans, who want to gain access to Central Asian states and other countries, have been urging Russia to open access to its gas field and export pipelines.

Matti Vanhanen, prime minister of Finland - which holds the current presidency of the EU - has encouraged Russia to ratify the International Energy Charter.

The charter requires open access to pipelines and energy supplies.

"I am quite sure the best result can be achieved when Russia opens its markets [also] to Western investment," said Mr Vanhanen.

Russia meanwhile has been looking to strengthen its position in energy markets, both in Europe, where it already supplies 25% of the market, and elsewhere.




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