Gazprom said yesterday that it had approved an 11 per cent cut in 2007 capital expenditure even as it comes under fire from the International Energy Agency for underinvesting in production amid warnings of a supply crunch.

Gazprom said it was making the cut in order to nearly triple financial investments as it expands its grip over Russia's energy sector via its $7.4bn purchase of control of Royal Dutch Shell's Sakhalin-2 oil and gas venture and increases its sway over other sectors such as electricity.