The Russian state energy giant Gazprom had in 2014 a massive drop in profits robust – and also because of the Ukraine crisis: Compared to last year the profit fell by 86 percent. And the outlook for the state-owned company is bleak.
Under pressure from the Ukraine crisis and because of the warm weather is the profit of the Russian energy monopoly Gazprom in 2014 slumped by 86 per cent compared to last year. The state corporation under international accounting standards IFRS made a surplus of 159 billion rubles (2.8 billion euros) last year, Gazprom said in Moscow on Wednesday. Profit therefore 2013 was a good seven times greater.
The demand in the West for Russian gas has fallen in the past year mainly because of the mild temperatures. In addition, Russia had Ukraine for months delivered no gas because of unpaid bills. Sales of Gazprom laid last year by 6.5 percent to 5.59 trillion rubles. 2013, the company had implemented 5.25 trillion rubles. To the slight increase was mainly due to the massive devaluation of the Russian currency, because the foreign invoices in dollars and pays Gazprom therefore received more rubles.
South Stream is only once on ice
At the same time, the weak exchange rate drove the net debt of the Group within one year by 48 percent in the air. Overall, the financial obligations grew to 1.65 trillion rubles. The outlook for the state-owned company is grim. Gazprom threatens a billion penalty in an antitrust action by the EU Commission. This raises Gazprom before that have foreclosed Central and Eastern European gas markets and there driven energy prices up.
Politically Gazprom due to the Ukraine conflict under pressure. From the planned pipeline project for years South Stream through the Black Sea, the Group adopted in December because of a fierce dispute with the European Commission. Instead, Gazprom is now planning a line – also through the Black Sea – in Turkey. The pipeline Turkish Stream with a planned capacity of 63 billion cubic meters per year will in future deliver gas to the Turkish-Greek border. From there up to 50 billion cubic meters of gas would continue to flow to Southeast Europe, the Russian plan.
Gazprom is seeking new partners – outside Europe
The aim of the project is to the Ukraine by 2019. To work as a transit country for Russian gas to avoid disputes over fares as in the past , Total 2014 Gazprom supplied with almost 160 billion cubic meters of gas about a third of its total sales in European countries. Europe is the main export market and this will remain so, said the company’s headquarters.
At the same time the monopolist strongly oriented towards Asia. In particular, the energy-hungry China is to be delivered via the planned pipeline Sila Sibirii (force of Siberia) in the future. Gazprom toying with the construction of a pipeline to South Korea even for years.