Gazprom 1H Revenues Hit Despite Sales Boost
Russian state piped gas export monopoly Gazprom sold in the first half of this year more gas but at at a lower price compared with the same period of 2016, with the rouble-dollar exchange rate also contributing to a drop in its ruble income.
Its profit for the period was rubles 408.025bn ($6.95bn), compared with last year's rubles 625.405bn.
Net sales of gas decreased in value by rubles 90.9bn, or by 5%, to just rubles 1.7 trillion ($29bn) for the six months mainly owing to an appreciation of the average exchange rate of the ruble against the dollar and euro by 17% and 20% respectively.
Western gas sales averaged $5.30/mn Btu in 1H2017
Net sales of gas to Europe and other non former Soviet (non-FSU) countries fell by 7% to rubles 1.05 trillion ($17.9bn) for the six months ended June 30, 2017 compared to the same 2016 period. This was mainly driven by a 13% lower ruble price (including excise tax and customs duties), partly offset by a 9% rise in volumes of gas sold, thus up 9.7bn m³ at 119.4bn m³ (using the Russian cubic metre, which has less energy than a standard cubic metre). The price fell from rubles 12,798 ($218) per '000 m³ to rubles 11,117 ($190.80) per '000m³ - the latter equivalent to just $5.30/mn Btu at current exchange rates.
Net sales of gas to FSU countries fell 9% to rubles 151.2bn ($2.6bn) for the six months. The change was due to lower average ruble prices (including customs duties) by 18% that was partly offset by selling 12% or 2bn m³ more gas.
Net sales of gas in the Russian Federation rose or 11%, to rubles 466.5bn ($7.9bn) for the six months ended June 30, 2017 compared to the same period of the prior year. This is mainly explained by the increase in volumes of gas sold by 13%, or 14.4bn m³, which was reduced by 2% lower prices.
Sales volumes were up in all three regions and prices lower in all three. In Russia where it sold the most, marginally – 124.3bn m³ – it received the lowest price, about a third of its export sales including tax and duties, at rubles 3,761/'000m³.
It made a loss of rubles 7.3bn on retrospective price adjustments, compared with a gain last year of rubles 40.0bn.
Net sales of refined products rose 11% to rubles 780.8bn for the six months compared to the same period of the prior year. The increase in sales of refined products was due to higher average prices. Net sales of crude oil and gas condensate increased by 64% to rubles 273.3bn, owing to more sales by Gazprom Neft Group to customers in Europe and other countries.
Power and heat energy net sales increased by 11 % to rubles 263.16bn thanks partly to a colder winter.
William Powell