Robust sales: A Gazprom worker walking next to pipelines at a gas measuring station near Moscow. The Russian energy giant posted a net income of 1.04 trillion rubles (US$11.3bil) in the first six months of 2024 compared with 296.2 billion rubles a year earlier. — Reuters
SAINT PETERSBURG: Gazprom Group more than tripled its net income in the first half of the year thanks to higher pipeline gas exports, robust oil sales and its purchase of Shell Plc’s former stake in the Sakhalin-2 project.
The Russian energy giant posted a net income of 1.04 trillion rubles (US$11.3bil) in the first six months of 2024 compared with 296.2 billion rubles a year earlier, according to an earnings report published last Thursday.
“Efficient work of the oil business, higher gas exports, including the planned growth of supplies to China, and our active steps to reduce costs,” have all contributed to the positive financial results, Gazprom deputy chief executive officer Famil Sadygov said in a statement.
The performance “was also influenced by the consolidation of Sakhalin Energy,” operator of the Sakhalin-2 oil and gas project, Sadygov said.
Gazprom, one of the world’s largest energy producers and exporters, has seen its core European natural gas business decline since 2022, after the Kremlin’s relationship with the West deteriorated following the invasion in Ukraine.
As a result, the company posted its first annual net loss so far this century in 2023.
The sharp rebound in Gazprom’s net income this year is positive for shareholders, the largest of which is the Russian government. Any potential dividend would benefit the nation’s budget, which is strained due to rising military spending and Western sanctions.
In the first half of this year, Russia’s natural gas exports to Europe, formerly Gazprom’s single largest market, rebounded by more than a quarter from the first half of 2023, and deliveries to China have grown above the levels under the contract with China National Petroleum Corp, according to Bloomberg calculations and the producer’s statements.
Gazprom expects pipeline gas supplies to the Asian nation to reach the planned annual 38 billion cubic m in 2025.
So far this year, Gazprom’s financial results also benefited from its larger stake in the Sakhalin-2 oil and gas joint venture in Russia’s Far East.
The company increased its interest in the project to nearly 78% after purchasing 27.5% formerly held by Shell, which withdrew from Russia in condemnation of the invasion of Ukraine.
In the first half of this year, Gazprom provisionally recognised a gain of some 167.4 billion rubles from raising its stake in Sakhalin-2, according to the financial report. — Bloomberg
