Pipeliners

May 5, 2005 - Bloomberg - Oil pipeline monopoly Transneft said Wednesday that 2004 profit fell but declined to confirm a report in Vedomosti that net income totaled 5 billion rubles ($179 million). Vedomosti said on Wednesday that Transneft's profit dropped more than threefold to 5 billion rubles last year, without citing anyone. Transneft reported net income of 15.8 billion rubles in 2003, according to unconsolidated Russian accounting standards, the newspaper said. Transneft will release 2004 earnings using international accounting standards in a week to 10 days, vice president Sergei Grigoryev said Wednesday in a telephone interview. Profit declined as the company spent more to upgrade pipelines and shifted more funds to subsidiaries to be able to raise borrowing for investment, he said. The state-controlled monopoly has been struggling to ship rising volumes of crude through its pipeline network. The country's oil producers have boosted exports amid soaring fuel prices and growing demand from consumers. Their output has increased 50 percent in the past six years. Transneft will pay 10 percent of its profit in dividends on preferred shares, the amount it is required to pay out according to its charter, Grigoryev said Wednesday. The company is 75 percent owned by the state, with the remaining 25 percent traded in the form of preferred shares. Transneft ships about 97 percent of the oil produced by Russia, the world's largest crude exporter behind Saudi Arabia. Transneft shipped 450 million tons of oil last year, compared with 416 million tons in 2003.