May 08, 2024

A Dismal Year for Gazprom


A Dismal Year for Gazprom
Gazprom and White House. James Offer, Flickr.

Gazprom, the Russian majority state-owned multinational energy corporation, concluded 2023 with its worst financial performance in history. The company's losses amounted to R629 billion (nearly $6.9 billion), with revenue plummeting by 27%.

The last time Gazprom faced a loss was during the rocky years of 1998–1999. During that period, global oil prices were at historic lows, and a significant portion of Gazprom’s contracts were linked to oil prices. Concurrently, domestic market non-payments were rampant. Even during the pandemic-induced challenges of 2020, Gazprom did not suffer losses as severe as those witnessed in 2023.

The primary catalyst for the losses stems from dwindling export revenues from gas sales to Europe, a repercussion of Russia's relentless War on Ukraine. Independent energy expert Kirill Rodionov reported a staggering 56% decline in gas supplies to the European Union, plummeting from 66.6 billion cubic meters in 2022 to 29.3 billion cubic meters in 2023. This decline failed to be offset by the increase in Russian gas exports to China, from 16 billion cubic meters to 22.5 billion.

Another contributing factor for Gazprom's financial woes is the heightened financial burden imposed by an additional increase in the mineral extraction tax.

Remarkably, the record losses in 2023 materialized despite optimistic assurances from both government officials and management. In October 2023, Russian President Vladimir Putin expressed confidence amidst the turmoil surrounding Gazprom: “Now Gazprom delivers less and has less income, but it feels confident.”

In December, Famil Sadigov, Deputy Chairman of the Board of Gazprom, projected a bright outlook for 2023, citing anticipated robust financial results driven by “other activities” and escalating gas supplies to China.

At the same time, Russia and China have yet to reach an agreement on the construction of the expansive gas pipeline Sila Sibiri 2 ("Power of Siberia"), which could position Russia as China's principal gas supplier. However, even if consensus is reached regarding the pipeline's construction, it is likely not sufficient to mitigate Gazprom's loss in the European market.

You Might Also Like

An Air Self Defense
  • March 27, 2024

An Air Self Defense

Some Russian companies are buying their own air defense systems.
Like this post? Get a weekly email digest + member-only deals

Some of Our Books

Driving Down Russia's Spine

Driving Down Russia's Spine

The story of the epic Spine of Russia trip, intertwining fascinating subject profiles with digressions into historical and cultural themes relevant to understanding modern Russia. 
Marooned in Moscow

Marooned in Moscow

This gripping autobiography plays out against the backdrop of Russia's bloody Civil War, and was one of the first Western eyewitness accounts of life in post-revolutionary Russia. Marooned in Moscow provides a fascinating account of one woman's entry into war-torn Russia in early 1920, first-person impressions of many in the top Soviet leadership, and accounts of the author's increasingly dangerous work as a journalist and spy, to say nothing of her work on behalf of prisoners, her two arrests, and her eventual ten-month-long imprisonment, including in the infamous Lubyanka prison. It is a veritable encyclopedia of life in Russia in the early 1920s.
Survival Russian

Survival Russian

Survival Russian is an intensely practical guide to conversational, colloquial and culture-rich Russian. It uses humor, current events and thematically-driven essays to deepen readers’ understanding of Russian language and culture. This enlarged Second Edition of Survival Russian includes over 90 essays and illuminates over 2000 invaluable Russian phrases and words.
A Taste of Russia

A Taste of Russia

The definitive modern cookbook on Russian cuisine has been totally updated and redesigned in a 30th Anniversary Edition. Layering superbly researched recipes with informative essays on the dishes' rich historical and cultural context, A Taste of Russia includes over 200 recipes on everything from borshch to blini, from Salmon Coulibiac to Beef Stew with Rum, from Marinated Mushrooms to Walnut-honey Filled Pies. A Taste of Russia shows off the best that Russian cooking has to offer. Full of great quotes from Russian literature about Russian food and designed in a convenient wide format that stays open during use.
Fearful Majesty

Fearful Majesty

This acclaimed biography of one of Russia’s most important and tyrannical rulers is not only a rich, readable biography, it is also surprisingly timely, revealing how many of the issues Russia faces today have their roots in Ivan’s reign.
The Pet Hawk of the House of Abbas

The Pet Hawk of the House of Abbas

This exciting new trilogy by a Russian author – who has been compared to Orhan Pamuk and Umberto Eco – vividly recreates a lost world, yet its passions and characters are entirely relevant to the present day. Full of mystery, memorable characters, and non-stop adventure, The Pet Hawk of the House of Abbas is a must read for lovers of historical fiction and international thrillers.  
Murder at the Dacha

Murder at the Dacha

Senior Lieutenant Pavel Matyushkin has a problem. Several, actually. Not the least of them is the fact that a powerful Soviet boss has been murdered, and Matyushkin's surly commander has given him an unreasonably short time frame to close the case.
Stargorod: A Novel in Many Voices

Stargorod: A Novel in Many Voices

Stargorod is a mid-sized provincial city that exists only in Russian metaphorical space. It has its roots in Gogol, and Ilf and Petrov, and is a place far from Moscow, but close to Russian hearts. It is a place of mystery and normality, of provincial innocence and Black Earth wisdom. Strange, inexplicable things happen in Stargorod. So do good things. And bad things. A lot like life everywhere, one might say. Only with a heavy dose of vodka, longing and mystery.
Davai! The Russians and Their Vodka

Davai! The Russians and Their Vodka

In this comprehensive, quixotic and addictive book, Edwin Trommelen explores all facets of the Russian obsession with vodka. Peering chiefly through the lenses of history and literature, Trommelen offers up an appropriately complex, rich and bittersweet portrait, based on great respect for Russian culture.

About Us

Russian Life is a publication of a 30-year-young, award-winning publishing house that creates a bimonthly magazine, books, maps, and other products for Russophiles the world over.

Latest Posts

Our Contacts

Russian Life
73 Main Street, Suite 402
Montpelier VT 05602

802-223-4955