PJSC Gazprom (Russian:Газпром,IPA:[ɡɐsˈprom]) is a Russianmajority state-owned multinationalenergy corporation headquartered in theLakhta Center in Saint Petersburg.[3] The Gazprom name is a contraction of the Russian wordsgazovaya promyshlennost (газовая промышленность, gas industry). In January 2022, Gazprom displacedSberbank from the first place in the list of thelargest company in Russia by market capitalization.[4][needs update] In 2023, the company's revenue amounted to 8.5 trillion rubles, a significant decline from the 11.7 trillion rubles it reported in 2022.[5]
Gazprom isvertically integrated and is active in every area of the gas industry, includingexploration andproduction,refining,transport,distribution and marketing, andpower generation.[6] In 2018, Gazprom produced twelve percent of the global output of natural gas, producing 497.6 billion cubic meters of natural andassociated gas and 15.9 million tonnes ofgas condensate.[7][needs update] Gazprom then exports the gas throughpipelines that the company builds and owns across Russia and abroad, such asPower of Siberia andTurkStream.[8] It produced 359 billion cubic meters of natural and associated gas, a decline of approximately 13 percent from the previous year.[9][unreliable source?]In the same year, Gazprom hasproven reserves of 35.1 trillion cubic meters of gas and 1.6 billion tons of gas condensate.[7] Gazprom is also a largeoil producer through its subsidiaryGazprom Neft, producing about 41 million tons of oil with reserves amounting to 2 billion tons.[7] The company also hassubsidiaries in industrial sectors, includingfinance,media andaviation, and majority stakes in other companies.
Gazprom was created in 1989, when theSoviet Ministry of Gas Industry was converted to acorporation, becoming the first state-run corporate enterprise in theSoviet Union.[10] After theSoviet Union's dissolution, Gazprom was privatized, retaining its Russia-based assets. At that time, Gazprom evaded taxes and state regulations and engaged inasset stripping. The company later returned to government control in the early 2000s, and since then, the company has been involved in the Russian government's diplomatic efforts, setting of gas prices, and access to pipelines.[11]
In 1943, duringWorld War II, the government of theSoviet Union developed a domestic gas industry. In 1965, itcentralizedgas exploration, development, and distribution within the Ministry of Gas Industry. In the 1970s and 1980s, the Ministry of Gas Industry found large natural gas reserves inSiberia, theUral region, and theVolga Region. The Soviet Union became a significant producer of gas.[15] In August 1989, under the leadership of the minister of Gas Industry of theSoviet Union (1985-1989)Viktor Chernomyrdin, the Ministry of Gas Industry was renamed theState Gas Concern Gazprom, and became the Soviet Union's first state-runcorporate enterprise.[16][17] In late 1991, when theSoviet Union dissolved, gas industry assets were transferred to newly established national companies, such asNaftogaz andTurkmengaz.[18] Gazprom kept assets located inRussia and secured amonopoly in the gas sector.[19]
In December 1992, whenBoris Yeltsin, theRussian president, appointedViktor Chernomyrdin, Gazprom's chairman, hisprime minister, the company's political influence increased.Rem Viakhirev took the chairmanship of Gazprom's Board of Directors and Managing Committee.[20] Following theDecree of the President of the Russian Federation of 5 November 1992, and theResolution of theGovernment of Russia of 17 February 1993, Gazprom became ajoint-stock company.[16] Gazprom began to distributeshares under thevoucher method. (Each Russian citizen receivedvouchers to purchase shares of formerly state-owned companies). By 1994, 33% of Gazprom's shares had been bought by 747,000 members of the public, mostly in exchange for vouchers. Fifteen percent of the stock was allocated to Gazprom employees. The state retained 40% of the shares. That amount was gradually lowered to thirty-eight percent.[21] Trading of Gazprom's shares was heavily regulated. Foreigners were prohibited from owning more than nine percent of the shares. In October 1996, 1% of Gazprom's equity was offered for sale to foreigners asGlobal Depository Receipts. In 1997, Gazprom offered abond issue of US$2.5 billion.
Chernomyrdin, asPrime Minister of Russia, ensured Gazprom avoided tight state regulation. Gazprom evaded taxes, and the Government of Russia received little individends. Gazprom managers and board members, such as Chernomyrdin and the GazpromChief Executive Officer,Rem Viakhirev, engaged inasset-stripping. Gazprom assets were shared amongst their relatives.Itera, a gas trading company, also received Gazprom assets.[22] In March 1998, for reasons unrelated to his activities at Gazprom, Chernomyrdin was fired by Yeltsin.[23] On 30 June 1998, Chernomyrdin was made chairman of the board of directors of Gazprom.
When, in June 2000,Vladimir Putin became the President of Russia, he acted to gain control overRussia's oligarchs, and increase the Government of Russia's control in important companies through a program ofnational champions.[24] Putin fired Chernomyrdin from his position as the Chairman of the Gazprom board. The Russian Government's stock in Gazprom gave Putin the power to vote out Viakhirev. Chernomyrdin and Viakhirev were replaced byDmitry Medvedev andAlexei Miller. They were Putin's prior employees inSaint Petersburg.[24] Putin's actions were aided by theshareholder activism ofHermitage Capital Management Chief Executive OfficerWilliam Browder, and the former Russian Finance MinisterBoris Fyodorov. Miller and Medvedev were tasked with halting asset stripping at Gazprom and recovering the associated losses. Itera was denied access to Gazprom's pipelines and came close tobankruptcy. In 2006, Itera agreed to return stolen assets to Gazprom for a fee.[25] Browder was deported from Russia in 2005, and the Russian arm of Hermitage Capital Management was seized two years later.[26][27]
In April 2001, Gazprom acquiredNTV, Russia's only nationwide state-independent television station, fromVladimir Gusinsky's company, Media-Most Holdings.[28][29][30] Gusinsky fell out of Putin's favor after using NTV to publish criticism from the families of sailors who died during theKursk submarine disaster and additional criticism of Putin's handling of theSecond Chechen War. Gusinsky then fled Russia, allowing Gazprom to take over NTV without his opposition.[31][32]
In June 2005,Gazprombank, Gazpromivest Holding,Gazfond and Gazprom Finance B. V., subsidiaries of Gazprom, sold a 10.7399% share of their stock for $7 billion toRosneftegaz [ru], a state-owned company. Some analysts said the amount paid by Rosneftegaz for the stock was too low.[33] The sale was completed by 25 December 2005, and with the purchased stock and the thirty-eight percent share held by the State Property Committee, the Government of Russia gained control of Gazprom.[34] The Government of Russia revoked the Gazprom twenty percent foreign ownership rule; the company became open to foreign investment.[35][36] In September 2005, Gazprom bought 72.633 percent of the oil company Sibneft for $13.01 billion. Sibneft was renamedGazprom Neft. The purchase was aided by a $12 billion loan. Gazprom became Russia's largest company.[37] On the day of the deal the company worth was valued at£69.7 billion (US$123.2 billion).
Countries dependent on Russian natural gas (2006)
In July 2006,On Gas Export was enacted with a nearly unanimous vote from theState Duma. This law gave Gazprom the exclusive right to export natural gas from Russia.[38][39][40][41] In December 2006, Gazprom signed an agreement withRoyal Dutch Shell,Mitsui andMitsubishi, to take over fifty percent plus one share ofSakhalin Energy.[42]
In June 2007,TNK-BP, a subsidiary ofBP plc, agreed to sell its stake inKovykta field in Siberia to Gazprom after the Government of Russia questioned BP's right to export gas from Russia.[43][44][45][46]
On 1 August 2007, Gazprom'sSergey Kuprianov threatenedBelarus with the stoppage of their gas flow if the latter failed to pay off their debts, and if so, they would experience a 300% price increase. Two days later, he saw significant progress towards payment, and he expected to be paid by the following week.[47]
On 23 June 2007, the governments of Russia and Italy signed amemorandum of understanding towards a joint venture between Gazprom andEni SpA to construct a 558-mile (900 km) gas pipeline to carry 1.05 trillion cubic feet (30 km3) gas per year from Russia to Europe. ThisSouth Stream pipeline would extend under theBlack Sea to Bulgaria with a south fork to Italy and a north fork to Hungary.[48][49][50]
On 18 December 2007,Frank-Walter Steinmeier (who was then Foreign Minister of Germany) andDmitry Medvedev signed an agreement on behalf ofBASF to exploit another gas field. At the time, German demand was 40% covered by Russian supply. Some German academics warned that Germany had become too dependent on Russia, but Steinmeier, citing the newOstpolitik, disregarded them.[47]
On 11 February 2008, Kuprianov threatened Ukraine with a halt to the flow; in January 2009, the threat was carried out, marking the beginning of the2009 Russia–Ukraine gas dispute. BASF'sJürgen Hambrecht was concerned about the reliability of his firm's supply, but Miller assuaged his worries in a phone call, and the Europeans did nothing to change course for more than a decade.[47]
On 1 December 2014, during a visit toTurkey, Putin said the SouthStream project would not proceed and 63 billion cubic metres per year (bcm/y) of gas would be shipped toTurkey instead ofBulgaria. Bulgaria was being sued by theEuropean Union for signing a contract with Russia, which was not aligned with European Union regulations. The president of Bulgaria,Rosen Plevneliev, pressured the European Union and Russia to resolve the matter quickly.[51][52]
The ceremony marking the opening of aLNG production plant built as part of theSakhalin-II projectNatural gas pipelines from Russia to Europe in 2009
On 4 September 2012, theEuropean Commission announced ananti-trust investigation into Gazprom's activities. This was based on "concerns that Gazprom may be abusing its dominant market position in upstream gas supply markets."[53] In late November 2013, Gazprom expanded its media interests by acquiringProfmedia fromVladimir Potanin.[54]
On 21 May 2014, inShanghai, Gazprom and theChina National Petroleum Corporation made a contract worth $400 billion over thirty years. The contract was for Gazprom to deliver 38 billion cubic meters of natural gas per year toChina beginning in 2018.[55][56] In August 2014, construction began with pipes for thePower of Siberia pipeline delivered to Lensk, Yakutia.[57] Russia will start supplying natural gas to China through thePower of Siberia pipeline on 20 December 2019 as part of the two countries' $400 billion energy pact. Beijing and Moscow are now negotiating over a second Far Eastern gas pipeline.[58][needs update]
Following theRussian invasion of Ukraine in February 2022, the threat by Russia of reducing the supply of gas to Europe risked the Gazprom export market. When it was implemented, exports by Gazprom decreased from the 185 Bcm achieved in 2021 to 100 Bcm in 2022 and further declined in 2023. The revenue of Gazprom, initially supported by high prices, collapsed in 2023, resulting in a trading loss and necessitating a 34% price increase in the domestic market over three years.[61][62] Gazprom has also opened itself up to compensation claims for failure to supply gas under long term contracts.[63] In April 2025, Gazprom announced that it will begin producing home appliances.[64]
In 2011,[needs update] Gazprom produced 513.17 billion cubic metres (18.122 trillion cubic feet) of natural gas, which was 17 percent of theworldwide production and 83 percent of Russian production. Of this amount, theYamburg subsidiary produced 41 percent,Urengoy 23.6 percent,Nadym 10.9 percent,Noyabrsk 9.3 percent and others 15.2 percent. Additionally, the company produced 32.28 million tons of oil and 12.07 million tons of gas condensate.[65][66][67]
The majority of Gazprom's fields are located in the Nadym-Pur-Taz region (near theGulf of Ob) inYamalo-Nenets Autonomous Okrug in WesternSiberia.[68] Historically, the three largest fields are Medvezhe,Urengoy andYamburg.[69][70] After more than twenty years of production, the fields are now in decline. Production from the fields has decreased by twenty to twenty-five bcm per year.[71][72] The production atZaporliarnoe, Gazprom's fourth largest field, increased until 2004, offsetting the decline in the other fields.[71] Since 2004, Gazprom has maintained production by activating new smaller fields and by purchasing production assets from other companies.[71][73]
Gazprom Neft produces crude oil. In 2005, Gazprom purchased 75 percent of the Gazprom Neft shares for $13.1 billion.[74]
billion cubic metres
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Natural gas
552.5
555.0
556.0
548.6
549.7
461.5
508.6
513.2
487.0
487.4
443.9
418.5
419.1
472.1
498.7
501.2
454.5
515.6
million tons
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Crude oil
0.9
9.5
34.0
34.0
32.0
31.6
32.0
32.3
33.3
33.8
35.3
36.0
39.3
48.6
48.3
48.0
47.1
48.2
Condensate
11.1
11.5
11.4
11.3
10.9
10.1
11.3
12.1
12.9
14.7
14.5
15.3
15.9
15.9
15.9
16.7
16.2
16.3
Source: Gazprom in figures 2004–2008, 2007–2011, 2009–2013 and 2012–2016.[65][66][67][75] 2017-2019[76] 2020-2021[77]
Gazprom's ability to supply natural gas to the domestic market and for reexport relied to a large extent on imports fromCentral Asia.[70][71] In 2007, Gazprom imported a total of 60.7 billion cubic metres (2.14 trillion cubic feet) from Central Asia: 42.6 billion cubic metres (1.50 trillion cubic feet) fromTurkmenistan, 8.5 billion cubic metres (300 billion cubic feet) fromKazakhstan, and 9.6 billion cubic metres (340 billion cubic feet) fromUzbekistan.[71] In particular, Gazprom purchased seventy-five percent ofTurkmenistan gas exports to supply gas toUkraine. In 2008, Gazprom paid $130/mcm to $180/mcm for gas from Central Asia.[71]
In 2015, Gazprom's proved and probable reserves of natural gas were 23.705 trillion cubic metres (837.1 trillion cubic feet), a 3.8% increase from the 2011 figure, which represented 18.4% of the world's reserves. In 2015, the reserves of crude oil were 1.355 billion tons and the reserves ofgas condensate were 933.3 billion tons.[65][78] 59.8 percent of Gazprom's natural gas reserves (Categories A+B+C1) were located in theUrals Federal District (decreasing), 20.5 percent in theArctic shelf (increasing), and 8.3 percent in theSouthern Federal District andNorth Caucasus Federal District.[65][66]
trillion cubic metres
2004
2005
2006
2007
2008
2009
2010
2011
2013
2015
2019
2021
Natural gas
20.90
20.66
20.73
20.84
21.28
21.95
22.52
22.84
23.26
23.71
34.89
30.22
Source: Gazprom in figures 2004–2008, 2007–2011 and 2009–2013.[65][66][67] 2019[76] 2021[77]
Gazprom invested approximately 480 billion rubles ($20 billion) in new major projects to maintain its supply.[71][73] Nearly 37 percent of Gazprom's reserves are located in theYamal Peninsula and in theBarents Sea.[70]
One of Gazprom's major projects is the Blue Stream Pipeline.[79] The Blue Stream Pipeline delivers natural gas toTurkey via theBlack Sea. In 1997, the Blue Stream Pipeline agreement was signed between Turkey and Russia.[80] In 2000, the first joint was welded. The pipeline transports 16 billion cubic meters each year.[79]
Exploration of the Yamal Peninsula has found reserves of over 10 trillion cubic metres of natural gas and over 500 million tons of oil and gas condensate. About 60 percent of these reserves are located inBovanenkovo,Kharasavey, and Novoportovo. The natural gas production capacity of the Bovanenkovo field was estimated to be 115 billion cubic metres per annum (4.1 trillion cubic feet per annum), with potential to increase to 140 billion cubic metres per annum (4.9 trillion cubic feet per annum).[65]
TheShtokman field is one of the world's largest natural gas fields. It is located in the central part of theBarents Sea, 650 kilometres (400 mi) northeast of the city ofMurmansk and 1,000 kilometres (620 mi) west of the Yamal Peninsula. The field is estimated to contain up to 3.7 trillion cubic metres (130 trillion cubic feet) of gas.[71] Potential production is 71 billion cubic metres per annum (2.5 trillion cubic feet per annum) in the initial phases, with a potential increase to 95 billion cubic metres per annum (3.4 trillion cubic feet per annum).[65] Gazprom,TotalEnergies (France), andStatoil (Norway) created a joint company, Shtokman Development AG, for the development of the field.[81][82][83]
In 2013, in Amsterdam,Alexey Miller, chairman of the Gazprom management committee, andJorma Ollila, chairman of the board of directors ofRoyal Dutch Shell, signed in the presence of Putin andMark Rutte, prime minister of theNetherlands, a memorandum outlining the principles of cooperation within hydrocarbons exploration and development in theArctic shelf and a section of the deep-water shelf.[84]
In 2008, Gazprom carried out 284.9 kilometres (177.0 mi) of explorative well drilling; 124,000 kilometres (77,000 mi) of 2Dseismic and 6,600 square kilometres (2,500 sq mi) of 3D seismic survey. As a result, gas reserves grew by 583.4 billion cubic metres (20.60 trillion cubic feet), and crude oil and gas condensate reserves grew by 61 million tons.
Gazprom'sUnified Gas Supply System (UGSS) includes 158,200 kilometres (98,300 mi) of gas trunklines and branches and 218 compressor stations with a 41.4 GW capacity. The UGSS is the largest gas transmission system in the world.[85] In 2008, the transportation system carried 714.3 billion cubic metres (25.23 trillion cubic feet) of gas.[65] Gazprom has claimed the UGSS has reached its capacity.[85] Major transmission projects included the Nord Stream pipelines, as well as pipelines inside Russia.[65]
In March 2021, the Russian Government authorised a long-term programme to develop and expand theliquefied natural gas industry in Russia with nine more LNG plants, to address the growing global LNG market.[86]
In August 2021 Russia's first LNG bunkering vessel,Dmitry Mendeleev, was completed for Gazprom.[87]
In October 2021, Gazprom andRusGazDobycha announced they would build a new plant,Baltic LNG, atUst-Luga, with access to theBaltic Sea for sea transportation westward. It would processethane-containing natural gas with a capacity of 13 million tons of LNG per year.[87][88]
In 2024, Gazprom faced a significant shortage of LNG tankers, leading the company to use the Marshal Vasilevskiyfloating storage and regasification unit (FSRU) for exporting LNG from its Portovaya facility. This shortage occurred because Gazprom's regular tankers, such as the Pskov, were involved in extended voyages to Asia, avoiding theSuez Canal andRed Sea due to security threats fromHouthi attacks.[89]
In 2006, Gazprom sold 316 billion cubic metres (11.2 trillion cubic feet) of gas to domestic customers; 162 billion cubic metres (5.7 trillion cubic feet) to the rest of Europe; and 101 billion cubic metres (3.6 trillion cubic feet) toCIS countries and the Baltic states.[71] Gazprom received about 60 percent of its revenue from its sales to European customers.[90] In 2008, the average gas price paid by Russian industrial customers was $71/mcm, while households paid $54/mcm.[71]
Since 2000,Natural gas prices have fluctuated. In late 2007, the price of natural gas at the New YorkNYMEX was $7.53 permillion British thermal units ($25.7/MWh). At a conversion of 26,4 m3 per millionBtu, it would correspond to a price of $285 per 1,000cubic metres. At the same time, based on their respective contracts with Gazprom, German customers paid $250 per cubic metre (m3), Polish customers $290 per m3, Ukraine customers $130 per m3 and Russian customers $49 per m3.[91]
Since the start of the Russian invasion of Ukraine in February 2022, and as a result of falling export revenue, the domestic market is expected to see price rises of 34% by July 2025.[62]
Gazprom delivered gas to 25 European countries. Its main export arm is Gazprom Export LLC, founded in 1973 and previously known as Gazexport until November 1, 2006, which has a monopoly on gas exports to countries outside the former Soviet Union. The majority of Russian gas in Europe was sold on 25-year contracts.[71] In late 2004, Gazprom was the sole gas supplier to Bosnia and Herzegovina, Estonia, Finland, Macedonia, Latvia, Lithuania, Moldova, Serbia, and Slovakia. It provided 97 percent of Bulgaria's gas, 89 percent of Hungary's gas, 86 percent of Poland's gas, nearly 75 percent of the Czech Republic's, 67 percent of Turkey's, 65 percent of Austria's, about 40 percent of Romania's, 36 percent of Germany's, 27 percent of Italy's, and 25 percent of France's gas.[95][96] By December 2010 with strong support fromAlexander Medvedev and Antonio Fallico, who was Russia's honorary consul in Verona, a formerItalian communist and a close associate of both Alexey Anatolievich Matveev (Russian:Алексей Анатольевич Матвеев; born 21 December 1963) and Vladimir Putin, Italy's gas supplied by Russia had greatly increased from 25 percent in 2004 to 70 percent.[97][98][99][100] In May 2006, theEuropean Union received about 25 percent of its gas supply from Gazprom.[101][102] In 2006, Gazprom entered several long-term gas contracts with European companies.[103] The contract prices were mainly linked to oil prices.[104]
In 2014, Europe accounted for 40% of Gazprom's revenue. The proportion of Europe's gas bought in thespot market rose from 15 percent in 2008 to 44 percent in 2012.[105]
In September 2013, during theG20 summit, Gazprom signed an agreement withChina National Petroleum Corporation (CNPC) that theHenry Hub index would not be used to settle prices for their trades.[106] In May 2014,Russian PresidentPutin met withGeneral Secretary of the Chinese Communist PartyXi Jinping and negotiated a $400bn deal between the Gazprom and the CNPC.[107] Under the contract, Russia was to supply 38 billion cubic meters of gas annually over 30 years for $350 per thousand cubic meters beginning in 2018. In 2013, the average price of Gazprom's gas in Europe was about $380 per thousand cubic meters.[107] China offered a loan of about $50bn to finance the development of the gas fields and the construction of the pipeline by Russia up to the Chinese border, with the Chinese to build the remaining pipeline.[107]
In January 2023, as a result of the sanctions imposed on Russia following the 2022 invasion of Ukraine, Gazprom announced that its gas exports had fallen 45% from 185 billion cubic meters (Bcm) to 101 Bcm, mainly due to the loss of the European market.[108] During 2023 exports fell again, with Europe purchasing just 28Bcm, a level not seen since the 1970s.[62]
On 1 January 2006, during theRussia-Ukraine gas dispute, Gazprom ceased the supply of gas to the Ukrainian market. Gazprom has called on the Ukrainian government to increase its payment for natural gas in line with global fuel price increases. During the night of 3 January 2006, and early morning of 4 January 2006,Naftogas of Ukraine and Gazprom negotiated a deal that temporarily[109] resolved the long-standing gas price conflict between Russia and Ukraine.
On 3 April 2006, Gazprom announced it would triple the price of natural gas to Belarus after 31 December 2006. In December 2006, Gazprom threatened to cease supply of gas to Belarus at 10 am Moscow time on 1 January 2007, unless Belarus increased payments from $47 to $200 per 1,000 cubic metres or to cede control over its distribution network.[110] Some analysts suggested Moscow was penalisingAlexander Lukashenko, the President of Belarus, for not delivering on pledges ofcloser integration with Russia,[111] while others noted that other countries like Armenia were paying as much for their gas as Belarus would with the new price levels.[112]
Gazprom later requested a price of $105,[113] yet Belarus still refused the agreement. Belarus responded that if supplies were cut, it would deny Gazprom access to its pipelines, which would impair gas transportation to Europe.[114] However, on 1 January 2007, just a few hours before the deadline, Belarus and Gazprom signed a last-minute agreement. Under the agreement, Belarus undertook to pay $100 per 1,000 cubic metres in 2007. The agreement also allowed Gazprom to purchase 50 percent of the shares inBeltransgaz, the Belarusian pipeline network.[115] Immediately following the signing of this agreement, Belarus declared a $42/ton transportation tax on Russian oil traveling through the Gazprom pipelines crossing its territory.
On 13 March 2008, after a three-day period during which gas supplies to Ukraine were halved, Gazprom agreed to supply Ukraine with gas for the remainder of the year. The contract removed intermediary companies.[116]
On 1 April 2014, Gazprom increased the gas price charged toUkraine from $268.50 to $385.50 (£231.00) per 1,000 cubic metres. Ukraine's unpaid gas bills toRussia stood at $1.7bn (£1.02bn).[117] On 30 October 2014,Russia agreed to resume gas supplies to Ukraine over the winter in a deal brokered by theEuropean Union.[118]
Gazprom is avertically integrated company, one that owns its supply and distribution activities.[70] Gazprom owns all its main gas processing facilities in Russia. It operates Russia's high-pressure gas pipelines and, since 2006, it has held a legal export monopoly. Other natural gas producers, such asNovatek, Russia's second largest gas company, are forced to use Gazprom's facilities for processing and transport of natural gas.[90][119]
At the end of 2008, Gazprom had 221,300 employees across its major subsidiaries involved in gas production, transportation, underground storage, and processing. Of these employees, 9.5 percent were in management, 22.9 percent were specialists, 63.4 percent were workers and 4.2 percent were other employees.[65] Gazprom's headquarters were in theCheryomushki District,South-Western Administrative Okrug,Moscow[120] until 2021, when they moved to theLakhta Centre in Saint Petersburg.[121]
Gazprom is anational champion, a concept advocated by Putin, in which large companies in strategic sectors are expected not only to seek profit, but also to advance Russia's national interests. For example, Gazprom sells gas to its domestic market at a price less than that of the global market.[21] In 2008, Gazprom's activities made up 10 percent of the Russiangross domestic product[65]
Due to its large-scale projects, including international pipelines likeNord Stream 1 andTurkish Stream, Gazprom was once a substantial source of revenue for several domestic suppliers and contractors.[122]
As of 2017[update], Gazprom's main shareholders were theFederal Agency for State Property Management with 38.37% andRosneftegaz with 10.97%.[12] Together with a 0.89 share of Rosgazifikatsiya, they guaranteed a majority control of the company by the Russian government. The rest of the shares were held by investors, including 25.20% byADR holders on foreign stock markets, and 24.57% by other legal entities and individuals.[12]
Gazprom has several hundred subsidiaries in Russia and abroad, which are either directly or indirectly owned and controlled by the company. It has incorporated a subsidiary in the United Kingdom, named Gazprom International UK Ltd, and the Netherlands, namedGazprom International Projects BV.[125]
Alexander Kozlov (Deputy Chairman, member since 18 March 2005)
Andrey Kruglov (Deputy Chairman, Head of the Department for Finance and Economics, member since 2002)
Alexander Medvedev (Deputy Chairman, Deputy Chairman of the Board, former Director General of Gazprom Export, President ofKontinental Hockey League, member of the Coordination Committee ofRosUkrEnergo, member since 2002)
Mikhail Sereda (Deputy Chairman, Head of Administration, Deputy Chairman ofGazprombank, member since 28 September 2004)
Sergei Ushakov (Deputy Chairman, member since 18 April 2003)
Elena Vasilyeva (Deputy Chairman, Chief Accountant, member since 2001)
Bogdan Budzulyak (Head of the Department of Gas Transportation, Underground Storage and Utilization, member since 1989)
Nikolai Dubik (Head of Legal Department, member since 2008)
Viktor Ilyushin (Head of the Department of Relationships with Regional Authorities of the Russian Federation, member since 1997)
Olga Pavlova (Head of the Department of Asset Management and Corporate Relations, member since 2004)
Vasiliy Podyuk (Head of the Department of Gas, Gas Condensate and Oil Production, member since 1997)
Vlada Rusakova (Head of the Department of Strategic Development, member since 5 September 2003)
Kirill Seleznev (Head of the Department of Marketing and Processing of Gas and Liquid Hydrocarbons, member since 27 September 2002, Director-General of Mezhregiongaz)
On 1 January 2007, Gazprom became the sponsor of the GermanBundesliga clubFC Schalke 04 at a cost of up to €25 million per year. On 23 November 2009, the partnership was extended for a further five years. Schalke then suspended their sponsorship of Gazprom after theRussian invasion of Ukraine. The sponsorship was worth $150m (USD) over five years.[128]
On 9 July 2010, Gazprom became a sponsor of theSerbian SuperLiga football clubRed Star Belgrade. In 2010, Gazprom was aGold Partner of the Russian professional cycling team,Team Katusha, together withItera, and Russian Technologies (Rostekhnologii).
On 17 July 2012, Gazprom became the officialGlobal Energy partner of the UEFA Champions League 2012 winnersChelsea. The sponsorship continued for three years until 2015.[129]
In September 2013, Gazprom became an official partner ofFIFA tournaments from 2015 to 2018. The contract included the2018 FIFA World Cup in Russia.[130]
Gazprom was also a sponsor for the defunct-Minardi F1 team in 2002–2003.
In April 2021, Gazprom became a sponsor of the International Amateur Boxing Association (AIBA, now theInternational Boxing Association) as "general partner". The sponsorship became controversial due to the IBA's increased Russian ties under presidentUmar Kremlev. This partnership ended in 2023.[131][132]
On 9 July 2012, Gazprom became a sponsor of theUEFA Champions League andUEFA Super Cup. The sponsorship continued for three seasons until 2015. In 2021, the partnership was also extended until 2024. The company was also set to serve as the global partner forUEFA Euro 2020 and2024; however, due to theRussian invasion of Ukraine, Gazprom's sponsorship for the Champions League and Euro 2024 was voided, marking the end of their 10-year partnership with UEFA.[133]
Repeatedly, Gazprom has been accused of being a political and economical weapon ofRussia, using the supply and price of natural gas to gain control overEurope and most noteworthy,Ukraine.[137][138] "Regardless of how the stand-off over Ukraine develops, one lesson is clear: excessive dependence on Russian energy makes Europe weak," saidDonald Tusk, former prime minister of Poland in April 2014.[139] The friction resulted in two boycott campaigns in Ukraine, one that started in2005, the other in2013. Russia denies weaponizing energy via Gazprom.[140] In December 2019, Gazprom paid $2.9 billion to Ukrainian counterpartNaftogaz as ordered by a Stockholm court ruling's award on damage claims stemming from alleged economic harassment.[141]
In the wake of the2022 Russian invasion of Ukraine, Gazprom had issues with many EU countries, and stated it would cut off supplies to French energy supplier,Engie, over failure to pay in full for deliveries. This was disputed, with France's Energy Transition Minister Agnes Pannier-Runacher stating, "Very clearly Russia is using gas as a weapon of war and we must prepare for the worst case scenario of a complete interruption of supplies."[142]
Yuganskneftegaz was the core production subsidiary of theYukos Oil Company, which was previously run by a Russian businessman,Mikhail Khodorkovsky. In 2003, the Russian tax authorities charged Yukos and its founder, Khodorkovsky, with tax evasion. On 14 April 2004, Yukos was presented with a bill for over US$35 bn in back taxes and a demand to pay the entire bill the same day. Requests by Yukos to defer payment, allow payment by installments, or to discharge the debt by sale of peripheral assets, including its shareholding in theSibneft oil company, were also refused.
The bailiffs froze Yukos' shares in Yuganskneftegaz and on 19 November 2004, they placed a notice in the Russian government newspaperRossiyskaya Gazeta. Yuganskneftegaz would be sold at an auction thirty days later on 19 December 2004.[143] The conditions for participation in the auction included an advance deposit of US$1.7 bn and prior clearance by the RussianFederal Antimonopoly Service. In early December 2004, Gazprom applied to participate in the auction via its wholly owned subsidiary,Gazpromneft.
On 15 December 2004, Yukos filed for bankruptcy protection in aHouston court and obtained a temporary injunction prohibiting Gazprom from participating in the auction. On 16 December 2004, a group of Western banks withdrew their financial support for Gazprom's application. On the same day, Baikalfinansgrup, a previously unknown company, submitted an application to participate in the auction.
On 19 December 2004, only two companies appeared at the auction,Gazpromneft and Baikalfinansgrup.Gazpromneft declined to place any offer. Baikalfinansgrup acquired Yuganskneftegaz on its first bid. On 23 December 2004, Baikalfinansgrup was acquired by Rosneft. Rosneft later disclosed in its annual financial statement that it had financed the acquisition of Yuganskneftegaz.[144] At the time,Sergey Bogdanchikov was the president of Rosneft and the chief executive officer ofGazpromneft.[145]
Shortly after the auction, the planned merger between Gazprom and Rosneft was abandoned, and Bogdanchikov resigned as Chief Executive Officer of Gazpromneft.
On 7 February 2006, in response to a question by a Spanish journalist,Vladimir Putin disclosed that Rosneft had used Baikalfinansgrup as a vehicle to acquireYuganskneftegaz to protect itself against litigation.[146]
On 22 April 2015, Gazprom was charged by theEuropean Commission with using territorial restrictions to engage in anticompetitive behavior and using its dominant position to impose unfair prices.[147] The company was accused of preventing competition inBulgaria, theCzech Republic,Estonia,Hungary,Latvia,Lithuania,Poland andSlovakia.[148] The territorial restrictions prevented the import of gas at potentially more competitive prices.[149] The restrictions also prevented gas from reaching areas of high demand and avoiding areas of excessive supply. Gazprom was also accused of compelling entities to consent to the now-defunctSouth Stream pipeline by necessitating a consent clause in long-term contracts.[147]
In 2018, Gazprom agreed to a settlement that involved dropping all contractual barriers to the free flow of gas in Central and Eastern European gas markets and taking various steps to improve economic cooperation.[148][150] Customers would be given an explicit contractual right to trigger a price review when prices paid diverged from competitive price benchmarks, and be allowed more frequent and efficient price reviews. Gazprom agreed not to seek any damages from itsBulgarian partners following the termination of the South Stream project. Had the case gone to court, the company could have been forced to pay fines of up to $12 billion.[147]
In 2020, Gazprom agreed to reimbursePoland'sPGNiG close to $1.5 billion for years of compelling it to overpay for its gas supply.[151]
In June 2021, a massivemethane plume over Russia resulted from the partial shutdown of a Gazprom PJSC pipeline for emergency repair. The company stated that the repairs, which took place on 4 June, released 2.7 million cubic meters (1,830 metric tons) of methane. That amount has roughly the same short-term planet-warming impact as 40,000 internal-combustion cars in the U.S. driving for a year, according to the Environmental Defense Fund. The climate-warming effect of methane is estimated to be 86 times more potent than that of carbon dioxide.[152][153]
Nord Stream is a system of offshorenatural gaspipelines in Europe, running under theBaltic Sea from Russia to Germany. The pipelines are owned and operated by subsidiaries of Gazprom. The Nord Stream projects have been fiercely opposed by theUnited States andUkraine, as well as by other Central and Eastern European countries, because of concerns that the pipelines would increase Russia's influence in Europe, and because of the knock-on reduction of transit fees for use of the existing pipelines in Central and Eastern European countries.[154][155] German ChancellorOlaf Scholz suspended certification of Nord Stream 2 on 22 February 2022 because Vladimir Putin led Russia torecognize theDonetsk andLuhansk regions of Ukraine as independent republics.[154] On 2 March 2022, it was reported that Nord Stream 2 AG, a Gazprom subsidiary, had ended business operations and laid off all 106 members of its staff as a result ofInternational sanctions, though earlier reports that it had filed forbankruptcy were denied.[156]
On 26 September 2022, a severe drop in pressure in both NS1 and NS2 was associated with a rupture in both pipes due to sabotage.
Gazprom's oil drilling in the Arctic has drawn protests from environmental groups, particularlyGreenpeace. Greenpeace has opposed oil drilling in the Arctic because it believes that oil drilling damages the Arctic ecosystem and that there are no safety plans in place to prevent oil spills.[157]
In August 2012, Greenpeace staged protests against the Prirazlomnaya oil platform, the world's first offshore Arctic drill site.[158][159] On 18 September 2013, the Greenpeace vesselMVArctic Sunrise staged a protest and attempted to board Gazprom's Prirazlomnaya oil platform. Greenpeace stated that the drill site could cause massive disruption to the Arctic ecosystem.[160] After arresting two campaigners attempting to climb the rig,[161] theRussian Coast Guard seized control of the Greenpeace ship by dropping down from a helicopter and arresting thirty Greenpeace activists.Arctic Sunrise was towed by the Russian Coast Guard toMurmansk.
The Russian government intended to charge the Greenpeace campaigners with piracy and hooliganism, which carried a maximum penalty of fifteen years imprisonment. Greenpeace argued their operatives were in international waters.[158] The Russian government's actions generated protests from governments and environmentalists worldwide.[157][162][non-primary source needed] According toPhil Radford, Executive Director of Greenpeace in theUS at the time, the reaction of the Russian Coast Guard and the courts were the "stiffest response that Greenpeace has encountered from a government since thebombing of theRainbow Warrior in 1985."[163] The charges of piracy were dropped in October 2013. In November 2013, 27 of the 30 activists were released on bail.[164]
In May 2014, the first shipment of Arctic oil arrived at a refinery in the Netherlands and was purchased by the French company,TotalEnergies.[165]
The episode is portrayed in the 3-hour television documentaryOn Thin Ice: Putin v Greenpeace.[166][167]
FollowingRussia's continued aggression towardsUkraine, theUS tightened its debt financing restrictions onGazprombank on 17 July 2014.[168] On 12 September 2014, the United States barred U.S. persons from selling goods and services to Gazprom andGazprom Neft in connection with certain deepwater, Arctic offshore and shale projects.[168][169] On 31 July 2014, the EU placed financial restrictions on Gazprombank.[170] On 8 September 2014, the EU placed financial restrictions on Gazprom Neft.[171]
In April 2018, the United States placedCEO Alexey Miller among theSpecially Designated Nationals.[172] This sanction bars U.S. individuals and entities from having any dealings with him. Entities outside the U.S. jurisdiction may also face punishment if the U.S. government deems they are aiding a sanctioned entity. Miller himself claimed to be proud of the sanction: "Not being included in the first list I even had some doubts – may be something is wrong (with me)? But I am finally included. This means that we are doing everything right," Miller said through his spokesman.[173]
The UK banned Gazprom from its debt and equity markets on 2 March 2022,[179] sanctioned Gazprombank on 24 March 2022,[180] and Gazprom board members on 1 March 2023.[181] Gazprom Energy, a UK firm, stated that "supplies 20.8% of non-domestic gas volume in Great Britain. We source our gas through commodity exchanges in exactly the same way as our competitors and we do not depend on gas supplies from Russia."[179]
Effect of sanctions
In 2022, due to economic sanctions, Gazprom took the unprecedented step of suspending dividends for the first time since 1998.[182]
On 18 July 2022, amid theNord Stream 1 maintenance period, Gazprom sent a letter declaringforce majeure, claiming that due to extraordinary circumstances it could not guarantee a gas supply. On 26 September 2022, a rupture occurred in both pipes due to sabotage.
In the first half of 2022, Gazprom reported high profits, roughly equal to the profit for the whole of 2021, due to high prices. In the second half of 2022 and into 2023, Gazprom likely did not make a profit at all due to falling exports.[183] Overall, Gazprom made a profit of 1.226 trillion roubles ($15.77 billion) in 2022, down 40%, after an extra tax was levied in late 2022.[184]
On 19 December 2022 the European Energy ministers agreed on aprice cap for natural Gas at €180 per megawatt-hour[185] aiming to stop Russia forcing European gas prices upwards.
Exports of gas by Gazprom from Russia in 2021 was 185Bcm,[186] in 2022 it fell by 45% to 100Bcm[187] and in 2023 it fell again to 62Bcm.[188]
After the February 2022 invasion of Ukraine and the West's introduction of sanctions, Western gas companies continued to pay, normallyGazprom Bank accounts in euros and dollars, which meant that the funds became blocked by sanctions. On 31 March, President Vladimir Putin signed adecree −decree 172, requiring payment to be made by alternate means. Many Western companies refused to pay except in accordance with their contracts; accordingly, Gazprom ceased supplying those companies. There had also been cases of short delivery by Gazprom. This created the2022–2023 Russia–European Union gas dispute
Arbitration cases through theInternational Court of Arbitration have been started by many western companies with long term contracts, for damages due to short supply or cessation of supplies in breach of Gazprom's contractual obligations, including Germany'sUniper, who is claiming €11.6 billion compensation from Gazprom[190] andEngie which opened proceedings in February 2023 for short delivery,[191]
Gazprom went to arbitration for €300m for unpaid gas fromGasum in Finland, which the arbitration decided was payable, but not in rubles.[192]
India'sGAIL is also seeking compensation through a London arbitration court over Gazprom's short delivery of LNG to India, which was disrupted by sanctions against a Gazprom subsidiary in Germany.[193]
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