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Gazprom shares at lowest since 2017

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Shares in Russian energy giant Gazprom have fallen to their lowest level since the autumn of 2017.

According to transaction data from the Moscow Stock Exchange, Gazprom shares fell 3.97 per cent to 117.9 rubles. The company’s shares last traded below this level on 6 September 2017.

In total, since the beginning of the year, Gazprom’s quotations on the Moscow Stock Exchange have fallen by more than 25 per cent.

In May, Gazprom’s Board of Directors recommended to the Annual General Meeting not to declare or pay dividends based on the company’s 2023 results.

Optimistic expectations about the signing of the contract for the Power of Siberia-2 pipeline project, which will increase natural gas supplies to China, at the St Petersburg International Economic Forum (SPIEF) last week also failed to materialise.

The company’s natural gas production is also at the lowest level in its history

On the other hand, Gazprom continues to cut production. In its annual report published on Monday, the company reported that natural gas production at the end of 2023 was 359 billion cubic metres.

The report said that 13 per cent (53.9 bcm) of production was lost compared to 2022 and 30 per cent (156 bcm) compared to 2021.

Last year’s result was the company’s worst in the 34 years since it was transformed from the USSR’s Ministry of Natural Gas Industry into Gazprom.

By cutting off gas to most of its European customers, Gazprom lost a market it had been associated with for more than half a century.

Last year it sold only 69 bcm of gas to countries outside the Commonwealth of Independent States (CIS), the lowest volume since 1985.

Deliveries to Europe fell to 28 bcm, a level last seen in the second half of the 1970s.

Gazprom ended the year with a net loss under International Financial Reporting Standards (IFRS) for the first time since the late 1990s, and the size of the loss, 629 billion roubles, was a record in the company’s history.

Moscow continues to negotiate with Beijing over the construction of the Siberian Power-2 pipeline, which is expected to increase China’s gas purchases fivefold.

But Beijing has been slow to act, expecting Russia to offer new discounts on gas, which is already 46 per cent cheaper for Chinese buyers than for European countries and Turkey.

According to Financial Times (FT) sources familiar with the talks, Chinese President Xi Jinping has asked his counterpart Vladimir Putin to cut the price of gas to the local level. He also agreed to buy only a small part of the 50 bcm of Siberia’s Power-2 capacity.

According to the newspaper, negotiations on the project have stalled and Russian investment banks have excluded the Chinese contract from Gazprom’s future valuations in their special reports.

RUSSIA

CERN prepares to export Russian scientists

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CERN, the European particle physics laboratory near Geneva, Switzerland, will stop working with hundreds of scientists affiliated with Russian institutions on 30 November unless they move to institutions outside the country.

This date marks the official end of the laboratory’s cooperation with the Russian Federation, following CERN’s decision to sever ties with the Russian Federation following the start of the war in Ukraine in 2022.

But tensions remain among researchers over CERN’s relationship with Russia, as the organisation will continue to work with Russian scientists through an agreement with the Joint Institute for Nuclear Research (JINR), an intergovernmental centre in Dubna, near Moscow, Nature reports.

JINR’s agreement with CERN is separate from Russia’s agreement with CERN. The decision not to cut ties with the lab has divided scientists, with some pointing to the lab’s relationship with the Russian state as it continues its war in Ukraine.

Boris Grinyov, director of the Institute for Scintillation Materials in Kharkov, Ukraine, who represents Ukraine as an associate member of the CERN Council, the organisation’s governing body, argues that allowing JINR scientists to participate in CERN projects was a “big mistake”.

Neither JINR nor the Russian Ministry of Science responded to Nature’s requests for comment. CERN’s agreement is very clear that we carry out peaceful fundamental research,’ said CERN spokesman Arnaud Marsollier.

Russia’s departure could put CERN, which was set up after the Second World War to bring nations together for “peaceful scientific pursuits”, in a difficult position.

CERN began working with the Soviet Union in 1955. Although Russia has never been a full member and its observer status has been suspended, hundreds of scientists affiliated with Russian institutions contribute to independent experiments on the Large Hadron Collider (LHC) particle accelerator.

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Meta bans RT and other Russian state-owned media networks

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Meta, the parent company of Facebook and Instagram, has banned Russia Today (RT), Rossiya Segodnya, and other Russian state-owned media from its platforms, citing their involvement in deceptive practices to conduct influence operations. In a statement released on Monday, Meta said the decision was made following thorough consideration and is part of expanded sanctions against Russian state media.

“We have taken action to extend our sanctions against Russian state-owned media. RT, Rossiya Segodnya, and related entities are now banned globally from our platforms due to their participation in foreign interference activities,” the statement said. This ban affects Facebook, Instagram, WhatsApp, and Threads.

The move comes shortly after the Biden administration announced sanctions targeting RT and other Moscow-controlled media outlets. U.S. officials have characterized RT as an integral part of Russia’s intelligence operations. Secretary of State Antony Blinken, speaking on Friday, emphasized the importance of truth in countering Russian misinformation. “Our strongest weapon against Russia’s falsehoods is the truth. It illuminates what the Kremlin is trying to hide,” Blinken said.

Earlier this month, the U.S. Department of Justice charged two RT employees with allegedly funding a right-wing media outlet in Tennessee in an effort to sow political division in the United States.

RT, which had 7.2 million followers on Facebook prior to the ban, has not yet commented on Meta’s decision. However, in a previous statement responding to U.S. actions, the broadcaster dismissed the legal charges with a mocking tone, stating: “We eat DOJ indictments for breakfast. Usually with a lot of sour cream.”

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The last major American bank in Russia closes its doors

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American CitiBank, one of the largest Western banks in Russia and one of the country’s 20 largest banks by assets, is winding down its operations in Russia.

According to information obtained by Frank Media from CitiBank, the bank’s subsidiary in Russia will close its last retail branch on 15 November.

The branch near the Paveletskaya metro station in the capital Moscow will also close within two months. Citibank advised its customers to “consider other options for making deposits and other transactions”.

All Citibank debit cards will be invalid from 20 September, and money transfers, ATM cash withdrawals and QR code purchases, including through the Central Bank’s Faster Payment System, will be stopped from 25 September.

Citigroup had planned to sell its retail operations in Russia in early 2021, but decided to close them completely following the military intervention in Ukraine.

The volume of loans granted by the bank since the beginning of 2022 has decreased by 98 per cent to 2.4 billion roubles. Of the 154 billion roubles in deposits from individual clients, only 1 billion roubles remained, and the funds held in commercial accounts fell more than 90 times, from 346 billion roubles to 3.8 billion roubles.

Following Citi’s lead, European banks began to close their operations in Russia. Raiffeisenbank, one of the largest, stopped foreign transfers for most of its clients at the end of August.

The total assets of foreign banks in the country at the beginning of this year will be only $66 billion. This is almost half the pre-war level of 2021 ($119 billion) and less than a quarter of the record level of 2012 ($239 billion).

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