Russia’s state-owned giant Gazprom on Tuesday reported a heavy drop in its net profit in the first half of the year, weighed down by a plunge in gas exports to Europe in the wake of the conflict in Ukraine.
In the first six months of the year, net profit fell to 296 billion roubles (€2.84 billion), down from 2,500 billion roubles (€24.04 billion) in the corresponding period of 2022.
“The drop in exports to Europe was partially offset by an increase in deliveries to China, which will continue to grow under contractual obligations,” commented Famil Sadygov, deputy head of Gazprom. He attributed the fall in this year's first semester profit to the weak rouble.
Gazprom, a pillar of the Russian economy run by several people close to President Vladimir Putin, had announced in May that its annual net profit in 2022 had dropped by over 41% to 1,226 billion roubles.
The year 2022 had been marked for Gazprom by the closure of most of the European market, except for liquefied natural gas (LNG), which EU countries continue to buy for lack of a real alternative.
The aim stated by the Europeans was to strangle Russian revenue linked to gas exports in order to limit the amount available to the Kremlin to finance its military offensive in Ukraine.
Faced with these difficulties, Gazprom, which holds a monopoly on Russian gas exports via pipeline, embarked on a strategic shift in recent months, redirecting part of its exports to Asia, where energy demand is strong.
Last year, gas deliveries via the Siberian Force pipeline in Russia’s Far East to China thus reached an all-time high, at 15.5 billion cubic metres.
