Gazprom Results Include $4bn Refund to European Clients

Gazprom, Russia’s energy giant, has reported half-year figures including a $4 billion (€3.1bn) refund to European customers.

The monopoly gas provider said its second-quarter profit had halved as a result. Net profit in April to June fell to 150.8 bn roubles (€3.75bn) from R303.7 bn a year earlier.

Gazprom, which is the only company allowed to export gas outside Russia, said its retroactive payments exceeded R133 bn (€3.3bn) in the first half of the year.

The European Commission is investigating claims that Gazprom was hindering the free flow of gas across the EU and imposing unfair cost by linking gas to oil prices. In September the EC started a formal inquiry into allegations of anti-competitive behaviour by Gazprom, in violation of anti-trust rules.

Much of the refund, which was higher than previously signalled, went to Germany, and the utility E.ON.

European clients have provided the biggest market for Russia, and previously the Soviet Union, since it started to export gas by pipeline over 30 years ago. However, statements accompanying the financial results confirmed that Gazprom is now turning to Asia for market prospects.

Reuters says that President Vladimir Putin has directed the energy monopoly to concentrate on China and Japan. A potential deal with the Chinese has run into a number of obstacles along the way. Gazprom’s share price rose slightly on the publication of results.

Domestic demand has fallen. In the first six months of 2012, Gazprom said, sales within Russia were 10% down, while there was a slight drop, of 0.5%, in sales to Europe and other countries.