Gazprom recorded a second year of heavy losses in 2024, the worst in the company’s history, with a net loss of near $13 billion.
Gazprom, which was once Russia’s most lucrative company’s, recorded a combined loss of more than $20 billion in the last two years, outweighing the gains it made in 2022 – when Russia’s gas export prices soared to an all-time.
While in Gazprom’s accounts suggest that the main loss in 2024 was primarily due to the devaluation of GazpromNeft’s market value and heavy taxation, it seems there are more structural factors at play.
The profitability of Gazprom’s sales shrunk drastically in the last two years: the company lost most of its lucrative European gas market, while new outlets for gas sales are barely allowing it to cover its production and transport costs.
Domestic gas prices in Russia averaged not too far from $1.5/mmbtu in 2024, export prices to Uzbekistan are below $4/mmbtu and the average price for the highly publicised piped gas sales to China were at $7/mmbtu.
Meanwhile, in Europe Gazprom was making around $10/mmbtu in 2024.
Gazprom is now looking into ways to cut costs, according to leaked internal papers 1500 jobs might be cut.
And the company’s ambitious investment plans might be also reshuffled.
Last but not least, Gazprom will continue to push for an increase in Russia’s domestic gas prices -which have been the basis of Russia’s social agreement for decades.
Source: Greg MOLNAR
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