Gazprom is conducting a new round of gas talks with a number of its key European clients, including Italy's Eni and France's GDF, to revise down prices under long-term oil-indexed contracts, deputy CEO Alexander Medvedev said Tuesday, adding that he expects retroactive gas price adjustments not to exceed $800-900 million in 2013.
"We suppose that the sum of retroactive payments on the conclusion of the negotiations, which are currently taking place, will not exceed $800-900 million," he told reporters at a briefing.
Gazprom expects the price cuts to be less than during the previous round of talks in 2012, when the reductions didn't exceed 7-10%, Medvedev said.
It also expects the talks to be concluded by the end of the first half of the year, he said.
Medvedev said the price discussions don't envisage any increase in the share of spot prices in the gas price.
"I have repeatedly said that the agreements reached [with clients on gas price] were based on revisions of parameters of existing price formulas rather than an increase in the share of spot [prices]," he said.
"The spot prices' share remains at around 7% of the company's total gas price portfolio," which is based on a basket of oil product prices, he said.
Commenting on the price dispute with German RWE, which is under arbitration proceedings in Vienna, Medvedev said consultations with the company are continuing beyond the court hearings and any agreements with RWE would be in line with agreements with the other customers for Russian gas.
RWE started formal arbitration over its long-term gas import contracts in 2010. Like many other major European gas importers, RWE was concerned that the price it was paying for supplies under long-term, oil-linked contracts was uncompetitive against gas prices in the spot gas market.
Most other major buyers, including Germany's E.ON, agreed settlements with Gazprom in similar cases outside the formal arbitration procedure.
Earlier this year, RWE said it expects a settlement with Gazprom during first half of 2013.
Following previous rounds of gas price talks, Gazprom has recognized retroactive payments of Rb102.749 billion ($3.3 billion) to its customers in 2012.
