Falling production. Output at Gazprom's three super-giant fields in West Siberia is declining at a rate of around 25-30 billion cubic metres (bcm) per annum. Overall levels of production are also stagnating. In 2007, the firm produced 548 bcm of natural gas, down 1.3% on the 2006 total.
Rising demand. Demand is growing in both Gazprom's domestic and export markets. Russian domestic demand is forecast to increase by 50 bcm per annum by 2015. As the EU's own natural gas production declines, net EU imports are set to grow by around 100 bcm per annum. Russia will have a strong incentive to increase its exports to EU member states and is looking to grow its market share from 26% in 2007 to at least 33% by 2020.
Cost pressure. Input costs for new projects in the global oil and gas industry -- including contractor services, materials and equipment -- have grown exponentially in recent years. According to one calculation, Gazprom's planned investments for 2009-10 are 2.7 times higher than in 2002, but with adjustment for inflation the increase is only 22.6%.
Price change. Imports of Central Asian gas have played a key role in helping to meet export commitments to Europe. However, these are set to become significantly more expensive following an agreement in March under which Gazprom undertook to pay 'European prices' for its gas purchases from the region from 2009.
Capacity questions. Gazprom is embarking on a number of ambitious projects simultaneously. These include new production in the Yamal peninsula, Sakhalin Island and the Shtokman field, and major pipeline construction, including the Nord Stream and South Stream projects, a proposed pipeline to China, and extensive gasification projects within Russia. It also needs to invest in storage facilities and in its ageing pipeline network, of which around a third is over 30 years old.