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Gazprom reported a net profit of US$12.36 billion (737.4 billion rubles) for the first nine months of 2016, an improvement on its nine-month 2015 result, which stood at US$11.57 billion (690.3 billion rubles).
The operating result for January-September 2016 was US$9.52 billion (567.82 billion rubles), almost half the operating profit for the same period of 2015, and revenues stood at US$70 billion (4.32 trillion rubles), a slight improvement on 2015.
For the third quarter alone, Gazprom booked lower revenues but a higher profit, at US$1.7 billion (102.2 billion rubles.)
The gas giant said in its financial statement for January-September and July-September that gas exports had improved from 125.3 billion cubic meters in January-September 2015 to 160.9 billion cubic meters in the same period of 2016. Still, in the third quarter, sales to Europe declined in money terms because of the cheaper ruble.
Earlier this week, Gazprom said that gas sales to Germany had reached a new record in 2016, at 49.8 billion cubic meters, up from 45.3 billion cubic meters a year earlier. Germany is Gazprom’s biggest foreign market and the destination of its Nord Stream-2 pipeline project, vehemently opposed by Eastern European members of the EU and Ukraine, which will lose a substantial portion of its gas transit income to Nord Stream-2.
Last year, CEO Alexei Miller said that Nord Stream-2 would let Gazprom save some US$1.6 billion annually as it will eliminate the need to maintain the old transit pipeline through Ukraine. At the same time, the amount of transit gas going through Ukraine will drop from the current 50-70 billion cubic meters to as little as 10-15 billion cubic meters.
Meanwhile, Ukraine’s own state oil and gas company Naftogaz is only growing more hostile to Gazprom. The two are locked in a dispute over several billion dollars that Gazprom says Naftogaz owes it in payments under a take-or-pay contract. Earlier this week, the Russian company presented Naftogaz with an invoice for the dues, at US$5.3 billion, which Naftogaz said it would not pay until the court rules on the dispute.
By Irina Slav for Oilprice.com
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Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.