For the first time in history, Gazprom’s suffered a loss on its profit: in the first quarter, the company’s efficiency fell by 306.2 billion rubles ($4.1 billion).
In 2019, the company’s net profit in this period reached over 199.4 billion ($2.7 billion).
The company’s problem is also the devaluation of the ruble, which led to an increase in the company’s external debt by almost 20%: out of 3.7 trillion rubles ($50 billion), almost 85% were occupied in foreign currency.
Also this year, Gazprom forecasts a 16% reduction in exports and a 1/3rd reduction in gas prices. As a result, the company may lose up to $20 billion in export revenue.
To this, an additional $18.8 billion requested from Naftogaz Ukraine can be added, as well as a lawsuit for $1.5 billion from the Polish PGNiG for gas deliveries at an inflated price for six years.
There is little doubt that Gazprom will have to pay both sums.
In addition, the Polish concern does not plan to extend the contract with Gazprom for the supply of gas through the Yamal-Europe pipeline, through which one fifth of all exported gas to the EU passes.
For Gazprom, this means that supplying Russian gas to its customers may become even more expensive.
Through Nord Stream-2 gas pipeline, which is yet to complete and become operational, the company will be able to supply only half of the planned volume, as EU legislation has changed.
Essentially, Gazprom is selling gas to Europe at a loss, since the set prices, taking into account logistics, are already lower than those it sells at in Russia.
In addition, Gazprom’s exports towards Europe are facing even more increasing risks.
On May 14th, the Greek parliament overwhelmingly ratified the interstate agreement of Greece, Israel and Cyprus on the construction of the East Mediterranean gas pipeline (EastMed pipeline).
Only one party abstained from voting, the KKE. A member of parliament from the party, Nikos Karatanasopoulos, said that the agreement bears the seal of the USA and NATO and turns the Eastern Mediterranean into a base for their activities, benefiting only specific groups of businessmen.
Greek Energy Minister Hatzidakis said the agreement will diversify energy sources and gas routes to Greece and Europe. According to him, this agreement is not directed against anyone, but is an indirect response to the provocative activities of Turkey in the Mediterranean.
The head of the Ministry of Energy also indicated strong support for the project from the United States, announcing the upcoming meeting in the near future at the ministerial level of the 3 + 1 group (Greece, Cyprus, Israel and the USA).
The Minister also said that EastMed and other gas infrastructure projects – TAP (Trans-Adriatic Gas Pipeline, TAP), IGB (Interconnector Greece-Bulgaria Inter-System Pipeline between Bulgaria and Greece), a floating LNG regasification terminal in the city of Alexandroupolis and an LNG terminal in Revitus under Athens – turn Greece into the energy crossroads of Europe.
The EastMed gas pipeline is supposed to provide energy supplies from the Eastern Mediterranean through the island of Crete to mainland Greece, from where it is supposed to supply gas via the Poseidon subsea pipeline to Italy and through the connecting gas pipeline between Greece and Bulgaria to other European countries.
As such, if the US is the one delivering the gas, even at its proven higher prices, it is likely trying to diplomatically force its allies into submission, which could specifically not be aimed at Russia and Gazprom, but just to turn a profit, but still is likely to impact the Russian gas monopolist negatively.
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