From manna to ruin? Once the most lucrative yardstick in the Russian economy, Gazprom is becoming a lame duck for Moscow.
The gas champion who once brought Europe to its knees is suffering from Moscow’s invasion of Ukraine. The figures do not lie: on May 2, Gazprom announced that it had suffered a record loss of 6.4 billion euros in 2024, its first loss since 1999, when the company was suffering the Russian financial crisis and the collapse of the ruble, notes L’Echo. However, analysts expected a net profit of 447 billion rubles, according to the Russian agency Interfax.
Bad news for the Kremlin, 50.3% shareholder In 2021, Gazprom represented around 7% of the Russian federal budget, but in 2023, it is estimated that it only represented half of this share, recalls Newsweek.
Russia: on the gas route, from the Caspian to the Black Sea
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Russia caught at its own game
It must be said that the company is losing its footing in Europe, and is experiencing a series of disappointments. The latest one? The announcement by the German energy company Uniper, Wednesday June 12, of the termination of its long-term gas supply contracts with Gazprom, details Newsweek.
Uniper indicates that it can claim “more than 13 billion euros” compensation for obligations not honored by Gazprom since 2022. Berlin then had to nationalize its company, heavily affected by the reduction and then the total end of deliveries of Russian gas to Germany, via the Nord Stream gas pipeline.
If this is the last blow dealt by Europe on Russian economic interests, many others have preceded it, and will follow. Russia, which had of its own accord restricted its supply of gas to Europe in 2022, has taken to its own game: Europe is weaning itself off faster than expected, and has adapted by diversifying its sources of gas. gas. The continent now mainly turns to Norway for its natural gas, and to the United States for its LNG.
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Thus since February 2022, European demand for Russian natural gas has dried up: from 40% in 2021, the Russian share arriving in Europe has fallen to less than 8% at the end of 2023, according to figures from the European Commission. Oh, the Federation is trying to deceive the trend by sending its LNG tankers full to the brim with Novatek LNG to the Baltic, but the equation is so far losing: Russian LNG represents only around 7% of gas (natural and liquefied). ) arriving at the 27.
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As for the Chinese and Indian markets, purchasing prices are lower there, and they are far too cautious in the face of Western sanctions to bring in big returns.
More room for Gazprom
“Gazprom is in a very difficult position”Henning Gloystein, director of energy, climate and resources at the Eurasia Group, a political risk consultancy, tells Newsweek“
European gas sales were by far the main source of revenue. of the company and “launching it in the LNG sector would be costly and technically difficult”, especially since another Russian behemoth already occupies the place: Novatek. “In the current context of sanctions and global LNG oversupply, a significant entry by Gazprom into this sector does not seem viable.” Clearly, there is no longer any place on the global market for Gazprom, especially since the EU has sworn through its Repower EU to do without Russian gas supplies in 2027.
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The situation of the gas giant is expected to get even worse on January 1, 2025, the date which marks the end of its deal with Naftogaz, providing for delivery via the Ukrainian gas pipeline. Brotherhood Russian natural gas to Eastern Europe. kyiv, until now bound by the terms of the contract with Gazprom, has already expressed its desire to cut off Russia’s access to the part of the pipeline located on its territory, which it owns. Russian deliveries via this means will therefore no longer be possible.
Certain countries in Eastern Europe (Austria, Hungary, Slovakia) nevertheless continue to depend on Russian natural gas, the European Union is currently working on a plan intended to leave the Ukrainian corridor Brotherhood opened, Bloomberg revealed last Monday… But for Azerbaijani gas.
