The Russian energy behemoth Gazprom announced on Thursday that it incurred a record loss of 6.4 billion euros last year, against the backdrop of the near-closure of the European market and sabotage of the Nord Stream pipelines.
According to figures released by this natural gas production leader, the net loss in 2023 amounted to 629 billion rubles, compared to a net profit of 1.226 trillion rubles in 2022.
These results underscore the challenges facing this major pillar of the Russian economy, which has been targeted for over two years by unprecedented Western sanctions due to the Kremlin’s offensive in Ukraine.
The gas giant is heavily affected by the European Union’s determination, its primary foreign customer before the Russian assault on Ukraine, to reduce its energy dependence on Moscow.
The sabotage of the Nord Stream 1 and 2 pipelines in September 2022 led to the near-total cessation of Russian gas deliveries to the European Union.
Since then, Gazprom has been trying to find new customers, but the infrastructure, costly and time-consuming to build, is lacking to transport its natural gas to Asia.
The uncertainties are numerous for the large Russian state-owned group, which also faces strong tax pressure without access to international financing.
Gazprom, which holds the world’s largest natural gas reserves, also has to undertake a project to expand the domestic gas distribution network.
In the face of these challenges, the group can, however, rely on the growing strength of the Power of Siberia 1 gas pipeline in Russia’s Far East, destined for China.