Russia Giant Gazprom’s Decades of Work ‘Flushed Down Toilet’: Ex-Official

  • Gazprom’s years of work on exporting Russian gas have been “flushed down the toilet,” an ex-official said.
  • An ex-manager at the gas giant bemoaned the impact of the Ukraine war to Reuters after gas prices fell close to two-year lows. 
  • Gazprom’s overseas revenues are nearly $3 billion lower than they were a year ago, per Reuters.

Decades of work by Gazprom to build up Russia’s natural-gas exports have gone to waste, a former official at the state-run energy giant has said, as Ukraine war sanctions threaten to help cut the company’s overseas revenues in half.

Speaking to Reuters on the condition of anonymity, the former Gazprom manager spoke about the impact of the collapse of Moscow’s gas exports to Europe on the company and the Russian state.

“The work of hundreds of people, who for decades built the exporting system, now has been flushed down the toilet,” he told Reuters.

Russia’s gas exports to Europe have fallen significantly thanks in part to sanctions imposed on Moscow after President Vladimir Putin sent troops into Ukraine in late February last year. The Kremlin’s decision to cut flows via a key pipeline to Germany also brought down trade.

As a result, Gazprom could see its revenue from overseas customers halve this year, according to Reuters calculations. Those sales were around $3.4 billion in January, down from $6.3 billion in the same period last year, it reported.

Because Gazprom is under the hand of the Kremlin, that is likely to have a direct impact on Russia’s trade deficit. The country’s oil and gas deficit dropped by nearly 50% at the start of 2023.

Energy prices are dipping after a milder winter than expected for Europe, which has successfully built up stocks of oil and gas. At the same time, Europe has opened up its gas supply chain to include imports from the likes of the US, undoing years of developments to trade links between Russia and the West.

A price cap on Russian energy has also softened demand for the country’s exports, and European natural-gas futures are trading around their lowest levels in nearly two years. Commodities trader Pierre Andurand told the Financial Times he thinks Russian President Vladimir Putin has lost the energy war over falling prices for the commodity.

Gazprom didn’t immediately respond to Insider’s request for comment.

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