MOSCOW: Russian energy giant Gazprom, the world’s biggest gas firm, said yesterday net profit in the first nine months of 2009 fell 36 per cent due to lower sales volumes and higher Central Asian gas prices.
PROFIT SHARPLY DOWN: A file photo taken on June 26, 2009 shows the headquarters of Russian gas giant Gazprom during the annual meeting in Moscow. —AFP photo
Net profit in the period fell to 479.3 billion rubles (US$15.70 billion) from 751.2 billion rubles (US$24.7 billion) in the same period in 2008, Gazprom said in a statement.
Gazprom said the drop in earnings reflected higher operating costs due to an increase in the price paid by the company for gas supplies purchased from Central Asian states.
The cost of purchased gas soared 64 percent over the period, Gazprom said, while the cost of purchased oil fell by 17 per cent.
Russia’s leading supplier of gas in Central Asia is energy-rich Turkmenistan.
A pipeline rupture in April virtually halted Turkmen gas supplies to Russia and they were only restored last month under a new price formula after a nine month break that strained diplomatic relations.
Sales for the nine months period were down 7.1 per cent at 2.41 trillion rubles (US$79 billion) due to a decrease in the volume of gas sold.
However net sales of gas to Europe increased slightly as a hike in prices made up for lower volumes.
But net sales of gas to former Soviet countries dropped nine percent, reflecting a 50 per cent fall in volumes while prices were raised by almost 87 per cent.
Among Gazprom’s major clients in the former Soviet Union is Ukraine, which last year waged a bitter conflict with the company over gas prices which left much of Europe cut off from Russian supplies for a fortnight.
This year, analysts say Ukraine has built up sufficient reserves to reduce the size of its purchases.
Gazprom, which has its roots in the Soviet Union’s gas ministry, now has 17 per cent of the global gas market and 60 percent of the Russian market. The state retains a controlling stake in the company.
Europe’s reliance on Russian gas supplies has caused concern in Brussels and the European Union is looking to bring supplies direct from Central Asia and the Caucasus via the planned Nabucco pipeline. —AFP