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The result of another Putin's lie: Gazprom reports huge losses, showing its worst figure in Russian history

Oleksandr LytvynNews
Gazprom shares fell
Gazprom. Source: RBC

The Russian gas giant Gazprom has reported a net loss of 629 billion rubles ($6.8 billion) in 2023. This is not only the company's first loss since the post-default year of 1999 but also its worst result in history. Six months earlier, Kremlin leader Vladimir Putin said that Gazprom was feeling "confident."

According to Agence.Novosti, the company's revenue last year amounted to 8.6 trillion rubles, down from 11.6 trillion a year earlier. Revenues from gas sales fell by half compared to 2022, from 6.5 to 3.1 trillion rubles.

The main reason for the loss is a decrease in export revenues from gas sales to Europe. Gas supplies to the European Union fell by 56%, from 66.6 billion cubic meters in 2022 to 29.3 billion cubic meters in 2023, according to independent energy expert Kirill Rodionov. This decline could not compensate for the increase in gas exports to China from 16 billion cubic meters to 22.5 billion, the expert emphasized.

Another reason for Gazprom's catastrophic results is an increase in the financial burden on the company due to an additional increase in the mineral extraction tax (MET), Marcel Salikhov, President of the Institute of Energy and Finance, said.

"In October 2023, during the Russian Energy Week forum, Putin stated that he was not afraid of the situation around Gazprom. 'Although Gazprom is supplying less and its revenues are lower, that's okay. Gazprom is confident, calm, and coping,' he said," the publication reminds.

China cannot replace Europe. This year, Russia is expected to supply 38 billion cubic meters of gas to China via the Power of Siberia pipeline. By 2027, Russia will supply another 10 billion cubic meters to China under a 2022 contract. In addition, Russia and China are negotiating the creation of another pipeline, Power of Siberia 2, which, if commissioned, could increase Russia's supplies to China to 98 billion cubic meters. But even this volume will be half as much as Russia supplied to Europe before the full-scale war.

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