Gazprom’s First Annual Loss Since 1999

Russian energy behemoth Gazprom faced its first annual loss since 1999, marking a significant downturn attributed to dwindling gas exports and Western sanctions. The state-owned company reported a staggering net loss of 629 billion rubles (.7 billion) in 2023, in stark contrast to the .2 billion net profit recorded in 2022. This financial setback follows a considerable decline in total revenue, dropping from 6 billion in the previous year to billion in 2023.

According to a report, the earnings report unveiled a 40% decrease in revenue from gas sales, amounting to .4 billion, while revenue from the oil business saw a marginal 4% increase to billion. Conversely, sales within its power utilities division surged by nearly 9% to .6 billion. Consequently, Gazprom’s shares plummeted over 4% in response to the disappointing financial figures.

Gazprom’s natural gas supplies to the EU dwindled by 55.6% to 28.3 billion cubic meters in 2023, reaching the lowest levels since the 1970s, as estimated by the International Energy Agency.

However, Gazprom has strategically shifted its focus towards Asian markets, particularly China, emerging as a key buyer. The completion of the Power of Siberia pipelines is anticipated to enable Russian gas supplies to China to reach nearly 100 billion cubic meters annually. Consequently, Gazprom foresees China replacing the EU as its primary market for gas sales upon full operationalization of these pipelines.

CEO Aleksey Miller has outlined Gazprom’s intentions to bolster cooperation with Central Asian nations as part of a broader strategy to offset losses in the EU market. Despite facing unprecedented financial challenges, Gazprom is actively diversifying its energy trade routes and markets to mitigate the impact of Western sanctions and geopolitical tensions on its operations.