Gazprom 1Q Profits Rise on Export Push
Gazprom increased profits on a big volume sales push into European markets in what was a colder than usual first quarter, with exports outside the former Soviet Union reaching $15bn. Its results also detailed a lost list of ongoing arbitration actions.
Its 1Q net profits increased by 12% year on year to rubles 392.2bn ($6.26bn), according to international (IFRS) accounting standards, Gazprom disclosed May 30.
The value of its gross gas sales to Europe and other export markets, before taxes and excise duties, increased by 28% to rubles 940.1bn ($15bn); while to Russia they increased by 12% to rubles 350.5bn, and to former Soviet states by 9% to rubles 123.8bn. Net sales value to all markets increased by 21% to rubles 1220.5bn ($19.5bn).
The Russian giant noted the February 28 final arbitration award in the Naftogaz-Gazprom case, saying that Naftogaz is obliged to pay Gazprom $4.673bn for untaken gas but that, net of other considerations, Gazprom must nonetheless pay Naftogaz $2.56bn – which Gazprom said it had included in 1Q results under ‘provisions for liabilities and charges’. It added that it lodged a petition in the Court of Svea (Sweden) against the charge and to cancel it partially. Gazprom also said it lodged a request for arbitration April 20 over gas transits against Naftogaz.
Lithuania arbitration hearings due next month
Hearings are meanwhile due June 2018 over an arbitration request lodged by Lithuania in 2012 in Stockholm (arbitration institute of the chamber of commerce) claiming LTL 5bn ($1.67bn), added Gazprom.
Saipem’s December 2015 request for arbitration against Gazprom-owned South Stream for compensation after the termination of Saipem's construction contract is scheduled to be heard June 2019.
Gazprom said it is also continuing to contest anti-trust fines imposed since January 2016 by Ukraine in that country’s courts. It also said it is considering a notice, received May 4 this year from Poland’s anti-trust regulator, about initiation of proceedings against the Nord Stream 2 (NS2) project.
The giant, in which the Russian state retains an overall majority stake, said it is also reviewing the impact of US sanctions; the company itself has not been directly targeted but its CEO Alexei Miller is on a US Treasury asset-freeze list; Miller is not thought to own significant assets in the US.
Talks with BASF
Gazprom also said Miller met May 29 in St Petersburg with Martin Brudermueller, CEO of German chemicals giant BASF.
Gazprom said the meeting covered a broad range of issues, including joint petroleum development projects in Russia, plus the Nord Stream pipeline. Wintershall has a 15.5% in the operating Nord Stream (NS1) pipeline, and is a financial backer of the NS2 project. Wintershall also partners operator Gazprom in blocks 4A and 5A in the Achimov formations of the Urengoyskoye gas field, as well as its block A1.
Photo credit: Gazprom