War in Ukraine: Russian giant Gazprom sees its profits fall by 41% with European sanctions

We can see a success of Europe’s economic sanctions against Russia. The Russian state giant Gazprom announced Tuesday a net profit down 41.4% in 2022, to 14.2 billion euros, amputated by the sharp drop in its gas exports to Europe in the wake of the conflict in Ukraine.

The Russian gas giant, a pillar of the Russian economy led by several close ociates of President Vladimir Putin, has indeed been heavily targeted by Western sanctions. The net profit of the Russian gas giant in 2022 reached 1,226 billion rubles (14.2 billion euros) against 2,093 billion rubles (24.2 billion euros) the previous year, according to the annual report published on Tuesday, cited by Russian news agencies.

According to the group, “the increase in tax payments that occurred during the second half of the year had an impact on the amount of profit”, it is indicated in a separate press release. In view of these results, Gazprom, a company listed on the Moscow Stock Exchange but controlled by the Russian state with 50.2%, has recommended not to pay dividends to its shareholders for 2022.

The EU is still buying Russian liquefied gas

The year 2022 was marked for Gazprom by the large closure of the European market, except for liquefied natural gas (LNG) which EU countries continue to buy, for lack of a real alternative. The goal displayed by the Europeans: to strangle Russian income linked to gas exports to limit the manna available from the Kremlin supposed to finance its military offensive in Ukraine.

According to figures shared by the Gas Exporting Countries Forum, the European import of Russian gas by pipeline fell from 140 billion m3 to 63 billion, a decrease of -55%. Faced with these difficulties, Gazprom, which holds the monopoly of Russian gas exports via gas pipeline, has begun a strategic change in recent months, redirecting part of its exports to Asia, where energy demand is strong.

Last year, gas deliveries via the “Force of Siberia” gas pipeline in the Russian Far East to China thus reached a historic maximum, at 15.5 billion cubic meters. At the same time, Russia has increased its sales of liquefied natural gas (LNG).

But the experts judge that it is harder for Russia to redirect its exports for gas than for oil, which is also heavily sanctioned, because the necessary infrastructures (gas pipeline, factories and LNG tankers for LNG, etc.) are costly and take time. time to be built.

Gazprom, for example, plans to begin construction in 2024 of a new gas pipeline, “Siberian Force 2”, to northwestern China. With nearly half a million employees, Gazprom, which holds the largest gas reserves in the world, remains one of the engines of Russian growth.

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