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Gazprom Keeps Gas Flowing Despite Dispute With Ukraine’s Naftogaz

Kremlin-controlled gas giant Gazprom has maintained gas flows to Europe via Sokhranovka point despite an ongoing transit dispute with Ukraine’s Naftogaz. Ukrainian transit flows have remained stable at slightly above 40 million cubic meters per day according to data from Gazprom, as reported by Energy Intelligence.  

Gazprom CEO Alexei Miller had earlier threatened to slap sanctions on Naftogaz as it continues to pursue an arbitration case for non-payment of transit  fees by Gazprom.

According to Naftogaz the "funds were not paid by Gazprom, neither on time nor in full" for the gas transit. Last year, Ukraine suspended the flow of gas through Sokhranovka, which delivers almost a third of the fuel piped from Russia to Europe through Ukraine.

Gazprom has seen its revenues and profits crash after Europe drastically cut gas purchases from Russia after it invaded Ukraine. The company’s profits for FY 2022 clocked in at 1.226 trillion rubles ($15.4 billion), 41% lower than in 2021 with the company citing a windfall tax imposed by Moscow last year as the reason for the decline. 

The state controlled company has decided not to pay dividends for the entire year 2022, having previously paid an interim dividend of 1,208 billion rubles ($15 billion) last autumn for the results recorded in the first half of 2022. 

Gazprom’s Deputy General Director Famil Sadygov tried to put a positive spin on the [clearly] bad situation: “We did not wait for the results for the whole year, but offered the shareholders the opportunity to receive, in advance, a significant amount. Due to this fact, the received dividends have a real value higher than the amount paid at the end of the previous exercise,” he told shareholders.

The weak results have sunk Gazprom’s shares further, bringing 12-month losses to nearly 10%. However, shares of its Russian oil and gas peers have fared better, with Rosneft shares up 54.3% while Novatek has gained 52.6%.

By Alex Kimani for Oilprice.com

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