The loss of a key European market has dealt a severe financial blow to Russian energy giant Gazprom, resulting in net losses of 1.076 trillion rubles ($13.1 billion) in 2024, the Moscow Times reported on March 18.
Gazprom’s losses averaged $251 million per week, $35 million per day, or $1.4 million per hour. While the company’s total revenue increased by 11% and its gas revenue by 14%, it still ended the year with a sales loss of 192 billion rubles ($2.3 billion).
The company’s financial troubles were compounded by falling share prices in its subsidiary Gazprom Neft and an increased income tax rate of 25%, which raised deferred tax liabilities.
In 2023, Gazprom posted a net loss under international accounting standards for the first time in 25 years, recording a historic deficit of 629 billion rubles ($7.6 billion).
Despite attempts to maintain its presence in Europe, Gazprom’s gas exports to the EU remained low. In 2023, the company delivered 32 billion cubic meters of gas to Europe, nearly six times less than its peak of over 180 billion cubic meters in 2018-2019.
The downturn has forced Gazprom to implement cost-cutting measures, including mass layoffs. On Jan. 13, Russian media outlet 47News reported that the company was preparing to lay off 1,600 employees from its central office.
Gazprom’s financial woes stem largely from the EU’s decision to reduce reliance on Russian energy following the full-scale invasion of Ukraine.
Compounding its troubles, Russia’s direct pipeline gas supplies to the EU have ceased completely after Ukraine refused to extend its transit agreement with Gazprom beyond Dec. 31, 2024.
UK, EU to discuss confiscating Russian assets ahead of Ukraine peace talks, Bloomberg reports
Negotiations will focus on establishing the legal and financial framework to seize Russian assets, despite opposition from some EU member states, particularly Belgium and Germany.
