Higher prices hurt Gazprom
GAZPROM, the state-owned Russian energy giant, yesterday said its profits for the first six months of the year had halved, even as the cost of gas soared.
Profits in the period tumbled to 305.8bn roubles (£6.3bn) from 609.4bn roubles in the first half.
The company blamed the price of buying gas from central Asia, which has increased by 105 per cent, for the plunge in profit.
The news comes after oil giants BP and Royal Dutch Shell reported a slump in profits last month on the back of fluctuating oil prices. The commodity peaked at $147 (£87.70) per barrel in July last year, before slumping to $30, and has now rebounded to around $79.
Gazprom officials said gas supply volumes to Europe had reached a minimum in April and that, in July, they exceeded volumes seen in recent years.
They added the Ukraine had been “diligent” in paying for gas to date and that the company hoped this would continue.
The comments come after Russia cut off gas supplies to the West late last year as part of a pay dispute with the Ukraine, which left millions of Europeans in the cold.
Late last week, Russian Prime Minister Vladimir Putin warned the Ukraine against late payment, but a transfer of $500m (£348m) quickly followed.
FAST FACTS GAZPROM
• Gazprom, the world’s largest producer of natural gas, saw its earnings slump in the half year.
• The company’s debt increased by a third to 1.3 trillion roubles as it borrowed heavily to finance a 20 per cent stake in Gazprom Neft.