The Russian oil and gas giant closed the last year with a massive loss.

The Russian oil and gas giant closed the last year with a massive loss – the equivalent of $9.3 billion.

The worst year ever on the global hydrocarbon market also proved fatal for Russia’s Gazprom. The company, which has a monopoly on pipeline gas exports from the Russian Federation, suffered a net loss of 706.925 billion roubles ($9.3 billion) against a profit of 734 billion roubles a year earlier, Interfax reported.

This has happened to Gazprom only once before in its history – in 1998, when Russia was undergoing an internal financial crisis and the rouble became virtually worthless. In 2020, it is not only the pandemic but also the exceptionally mild winter that put the Russian company at a disadvantage.

Gazprom’s revenue from gas sales fell 20.4 per cent to RUB 2.636 trillion; gross profit was 25 per cent lower – RUB 1.573 trillion. Profit on sales fell 57 times – from 629.11 billion roubles to 11 billion roubles. Two-thirds of the pure loss – 466 billion roubles – came as a result of the decline in Gazprom Neft’s balance sheet value. At the end of last year, the oil subsidiary fell in value by a quarter. The remainder of the loss was due to the devaluation of the rouble, which saw Gazprom’s foreign currency debt rise sharply, as well as a collapse in export revenues.

At the end of 2020, the company exported 179.3 bcm of gas to non-CIS countries, the lowest figure in the past five years. In physical terms, exports fell by 10 per cent and in monetary terms by 40 per cent due to a sharp fall in prices in Europe, which in spring 2020 slipped below Gazprom’s break-even point of $100 per thousand cubic metres.

According to the Bank of Russia, gas sales brought Russia $25.1 billion, its worst performance since 2004.

By Annie Cook (photo: web)