• 4 minutes Some Good News on Climate Change Maybe
  • 7 minutes Cuba Charges U.S. Moving Special Forces, Preparing Venezuelan Intervention
  • 12 minutes Washington Eyes Crackdown On OPEC
  • 15 minutes Solar and Wind Will Not "Save" the Climate
  • 1 hour Prospective Cause of Little Ice Age
  • 4 hours L.A. Mayor Ditches Gas Plant Plans
  • 10 hours is climate change a hoax? $2 Trillion/year worth of programs intended to be handed out by politicians and bureaucrats?
  • 3 mins *Happy Dance* ... U.S. Shale Oil Slowdown
  • 7 hours students walk out of school in protest of climate change
  • 24 hours Most Wanted Man In Latin America For AP Agency: Maduro Reveals Secret Meetings With US Envoy
  • 11 hours Ford In Big Trouble: Three Recalls In North America
  • 1 day Amazon’s Exit Could Scare Off Tech Companies From New York
  • 1 day And the War on LNG is Now On
  • 11 hours Why Is Japan Not a Leader in Renewables?
  • 8 hours Is the Green race a race from energy dependence.
  • 1 day And for the final post in this series of 3: we’ll have a look at the Decline Rates in the Permian
Is A Natural Gas Cartel Forming?

Is A Natural Gas Cartel Forming?

Over two months ago, Qatar…

How Long Will This Oil Rally Last?

How Long Will This Oil Rally Last?

Oil prices have been trading…

Gazprom Expects Profits To Triple Despite Low Oil Prices

Pipeline

After posting an 86 percent drop in net profit of 159 billion rubles ($3.07 billion) in 2014, the Russian gas giant has posted margins of over 10 percent for 2015 and expects its profits to triple.

Andrey Kruglov, Gazprom’s deputy chairman explains in Issue 12 of Gazprom Magazine that for the 2014 year its “net income collapsed mainly due to non-cash losses on currency differences as a result of a major weakening of the ruble.”

This currency risk is inherent to companies like Gazprom, where most cash producing assets are denoted in rubles, while most of its revenue and debt is denoted in foreign currency. This makes forecasting net profit difficult.

“The foreign currency debt dominance in our credit portfolio will largely depend on the still volatile dollar rate at the year-end,” Kruglov notes.

The company’s EBITDA is posted around US$30 billion, a decrease of less than 10 percent from the 2014 level. Kruglov noted, “The decline in global energy prices is putting pressure on the financial results of all oil and gas companies across the world, and Gazprom is no exception… The expected decline in profitability is primarily caused by a deterioration in the oil and gas market and an increase in the tax burden.”

Gazprom is and has been taking cost-reduction efforts to increase its margins. This includes selling off non-performing assets, and, as Kruglov notes, to “pursue a conservative debt management policy, i.e. to pay out more than to borrow.”

By Matt Slowikowski for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News