The Russian gas giant Gazprom is ready to pay Kremlin £8.6bn after posting profit records. Gazprom, usually known as Russia’s biggest gas producer, has made enormous profits of 2.5tn roubles (£35.8bn) in the first half of this year.
Gazprom will share its 1.21tn rouble with Kremlin as Kremlin owns 49.3% of Gazprom after its board suggested paying investors 51.03 roubles for each ordinary share. On September 30, the shareholders are set to make a decision at the general meeting.
The payout signifies a failure of the West’s sanctions campaign against Russia. The UK and Europe have gradually moved to phase out Russian gas and oil imports to stop Western funding of Vladimir Putin’s government. Instead, Russia expanded its oil exports to Asia, and due to a decrease in Gazprom’s supplies to Europe, gas prices inflated rapidly.
Famil Sadigov, Deputy CEO of Gazprom, said,” The Gazprom Group successfully achieved record revenue and net profit in the first half of 2022 under the burden of sanctions and a challenging environment while minimising net debt and leverage.
In recent months, Gazprom has reduced its supplies to the lowest since 2008. The supply was stopped for ten days for maintenance of the pipeline. A new crisis erupted when When Gazprom CEO Alexey Miller announced that Siemens Energy was unable to conduct routine maintenance on equipment for the Nord Stream 1 gas pipeline.
European governments have accused Putin of using gas supplies as a weapon against Europe for supporting Ukraine in the Russia-Ukraine war. Moscow denies this and cites technical faults for interrupting gas supplies in Europe.
The European Commission is looking for emergency interventions in wholesale gas markets as they fear interruption of power services in the upcoming winter.
European countries are generally surpassing the EU’s pre-winter gas storage goals. About 84 bcm of natural gas is stored in Europe, which is higher than the 65 bcm goals set for September 1 and not far from the 88 bcm goals set for November.
Poland, Italy, Czech and France have already reached their target for November. Latvia is the only European country falling behind the September target.
Germany has the highest storage facility, around 2.6 bcm, because it has enormous storage facilities and higher ambitions.