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

Russian Rules

Russian Rules

From the shores of the White Sea to Moscow and the Northern Caucasus, Russian Rules is a high-speed thriller based on actual events, terrifying possibilities, and some really stupid decisions.
Okudzhava Bilingual

Okudzhava Bilingual

Poems, songs and autobiographical sketches by Bulat Okudzhava, the king of the Russian bards. 
Chekhov Bilingual

Chekhov Bilingual

Some of Chekhov's most beloved stories, with English and accented Russian on facing pages throughout. 
Dostoyevsky Bilingual

Dostoyevsky Bilingual

Bilingual series of short, lesser known, but highly significant works that show the traditional view of Dostoyevsky as a dour, intense, philosophical writer to be unnecessarily one-sided. 
At the Circus (bilingual)

At the Circus (bilingual)

This wonderful novella by Alexander Kuprin tells the story of the wrestler Arbuzov and his battle against a renowned American wrestler. Rich in detail and characterization, At the Circus brims with excitement and life. You can smell the sawdust in the big top, see the vivid and colorful characters, sense the tension build as Arbuzov readies to face off against the American.
White Magic

White Magic

The thirteen tales in this volume – all written by Russian émigrés, writers who fled their native country in the early twentieth century – contain a fair dose of magic and mysticism, of terror and the supernatural. There are Petersburg revenants, grief-stricken avengers, Lithuanian vampires, flying skeletons, murders and duels, and even a ghostly Edgar Allen Poe.
The Little Humpbacked Horse (bilingual)

The Little Humpbacked Horse (bilingual)

A beloved Russian classic about a resourceful Russian peasant, Vanya, and his miracle-working horse, who together undergo various trials, exploits and adventures at the whim of a laughable tsar, told in rich, narrative poetry.
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.

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