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Gazprom plans to lay off 1,600 employees amid record losses

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Russia’s energy giant Gazprom, which lost its European market and announced losses of hundreds of billions of rubles, is planning extensive layoffs for head office employees.

According to the St. Petersburg-based 47news website, the company is considering the dismissal of 1,600 employees at its head office. This proposal was voiced by Elena Ilyukhina, deputy chairman of Gazprom’s board of directors, in a petition sent to the company’s president, Alexei Miller.

The petition highlighted the challenges facing Gazprom and the necessity of cost optimization in management and production processes. According to Ilyukhina, Gazprom spends 50 billion rubles annually on head office employees. She stated that the number of these employees could be reduced from 4,100 to 2,500.

On the other hand, Sergey Kupriyanov, head of Gazprom’s Information Policy Department, confirmed the situation to Forbes. It is stated in the report that the personnel to be laid off are planned to be determined by 15 February.

Gazprom, which cut natural gas deliveries through Ukraine, lost two-thirds of its exports. In 2023, the company’s gas exports outside Europe totaled only 69 billion cubic meters, the lowest level since 1985. Exports to Europe fell to 28 billion cubic meters, dropping to levels last seen in the late 1970s.

In 2024, gas deliveries to Europe increased to 32 billion cubic meters but remained less than a fifth of pre-war levels (180 billion cubic meters in 2018–2019).

In 2023, for the first time in 25 years, Gazprom posted a net loss of 629 billion rubles, according to International Financial Reporting Standards (IFRS). This figure marked the largest loss in the company’s history.

Although Gazprom announced a profit of 989 billion rubles in the January–September period last year, losses in the gas business continued, amounting to 480.6 billion rubles in the first half of the year. Gazprom’s annual revenue is expected to fall by about $6 billion with the end of natural gas deliveries through Ukraine on 1 January 2025.

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Ukraine targets TurkStream pipeline in drone attack, says Russian Defence Ministry

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The Russian Defence Ministry announced that the Ukrainian military attempted to attack the Russkaya compressor station, which supplies gas to the TurkStream gas pipeline, using unmanned aerial vehicles (UAVs).

The attack occurred on 11 January, and nine drones were shot down by air defence systems. However, falling debris caused minor damage to the gas metering station building and equipment. No station employees were injured in the incident.

Natural Gas flow continues as normal

The ministry stated that the damage caused by the wreckage was quickly repaired by Gazprom teams, and gas flow continued without interruption.

The Russkaya compressor station is located in the Anapa district of the Krasnodar region, approximately 5 kilometres from the Black Sea coast. According to Gazprom data, as of 2020, the station has seven gas pumping units with a capacity of 32 MW each.

As of 1 January, the five-year agreement to transport Russian gas to Western and Central Europe via Ukraine expired. Kiev has refused to extend this agreement.

Following the explosions in the Nord Stream pipelines and the suspension of the Yamal-Europe line, TurkStream remains the only route for Russian gas to reach Europe.

LNG exports will increase

Russian President Vladimir Putin stated that Russia will focus on liquefied natural gas (LNG) exports instead of pipeline transport after Ukraine’s withdrawal from gas transit.

Putin said, “This product is in demand in world markets. We will continue to increase our presence in this area.”

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Russia introduces new gas payment rules amid U.S. sanctions

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In response to U.S. sanctions on Gazprombank, Russia has implemented new regulations for gas payments from foreign buyers, mandating transactions in rubles. These changes were outlined in a presidential decree published yesterday.

Gas payments through special accounts established by Gazprombank in March 2022 will be suspended until the sanctions are lifted.

Foreign buyers can now transfer funds to their ruble accounts in authorized banks for payment or debt settlement. Payments may be conducted in rubles or the currencies specified in contracts.

Gas suppliers can terminate payment obligations by offsetting mutual claims, as per the amendments.

To purchase Russian gas, foreign buyers must transfer the required amount in rubles to the supplier’s account in an authorized bank. Alternatively, buyers may secure a ruble loan from a third party for this purpose.

The addition of Gazprombank to the U.S. sanctions list in November has disrupted the existing payment framework for foreign buyers. The decree, however, does not specify which banks besides Gazprombank are authorized to handle payments for natural gas.

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INTERVIEW

Russian expert: “Kremlin looks forward to Trump’s return to the White House”

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We asked 6 questions to Eduard Galimullin, an expert at the Centre for Comprehensive European and International Studies (CCEIS) at the HSE (Higher School of Economics) University, one of Russia’s most prestigious educational institutions. In our interview on the impact of the Trump administration on the war in Ukraine, Galimullin drew attention to ‘Trump’s unpredictability’. Galimullin believes that the Kremlin is cautiously optimistic and emphasised that the Kremlin has not yet given a definitive response to actions that violate Russia’s red lines.

The US and the UK have authorised Ukraine to use weapons capable of delivering deep strikes against Russia. This step came on the eve of the change of power in the United States. How do you think this step will affect the course of the war?

I think the temptation to wait for the switch of the U.S. leadership is quite strong. Although the Kremlin says that the U.S. course of containing Russia will remain unchanged no matter who is occupying the White House, I think there is still some hope for Trump’s return. Especially given the intentions to end the conflict that he has publicly voiced.

Therefore, I expect that the Western countries’ authorization for Kyiv to use missiles to strike Russian territory will not fundamentally affect the course of the war. As we can see, Moscow still has various options for a non-nuclear response. The situation on the battlefield will also not change significantly for such a short time.

However, a dramatic escalation is possible if, for example, the use of Western long-range missiles leads to mass civilian casualties. But I don’t think Kiev will be keen to do as much damage to Russia as possible in the shortest possible time. Yes, so far it seems that Trump is rather unlucky for Ukraine. But the paradox is that both Moscow and Kyiv have certain hopes for him. This is because he is unpredictable.

The US and NATO in general are constantly eroding Russia’s ‘red lines’ in Ukraine. How far do you think Russia will show ‘strategic patience’?

Russia has so far taken a rather responsible approach to the issue of using nuclear weapons, unwilling to allow the escalation of the crisis into a conflict between Russia and NATO. However, the U.S. and many European countries interpret this as a weakness, continuing to push the Kremlin to escalate. Yet it should be obvious to an outside observer that military provocations against a nuclear power are extremely dangerous. Diplomatic measures to resolve the conflict are necessary. One can jest at Russia’s “red lines,” but the fact is that when a decisive response is forthcoming, there will be no reason for joking.

We can say that the Ukrainian army is a continuation of the Soviet military tradition. Do you think the process of adapting this army to NATO systems is complete? Or are these modern Western systems being used directly by Western military experts and personnel. Does the Russian side have any precise information or intelligence on this? What is your opinion?

Unfortunately, since I am not a military expert, I cannot provide precise information on this matter. However, the media have already repeatedly leaked information that the Ukrainian army is once again returning to the Soviet military tradition in terms of battlefield planning. I think that this is true. As for Western weapons, it is at least known that Ukrainian soldiers are trained to operate them in Western countries. However, practice has shown that these weapons so far have not had any significant effect on the course of the conflict.

Do you see a risk of the conflict in Ukraine turning into an inter-state war in Europe? ‘We believe that we have the right to use our weapons against the military targets of countries that allow their weapons to be used against our facilities,’ Putin said. Can this be directly interpreted as meaning that Western states could also be targets of Russia?

I think that’s the way it is. The question of to what extent are Western countries involved in the conflict has been raised almost from the very beginning of the conflict. Starting at what point is it possible to claim that the U.S. and Europe are directly involved in the war with Russia? Of course, the most obvious answer is to send ground troops to Ukraine. But so far that has not happened.

North Korean troops are alleged to have participated in the war in favour of Russia. Is it too early to say that the polarisation created by the Ukraine war has triggered a global military bloc? Or is such a trend gaining strength?

I do not think that the Russian-Ukrainian conflict, even if its hot stage lasts for a few more years, will divide the world into opposing blocs. We see that even within European countries there is no unity on the issue of confrontation with Russia. On the other hand, it is unlikely that India or Latin American countries will take sides.  In my opinion, the technological rivalry between Washington and Beijing will probably polarize the world into two opposing blocs.

Are there any expectations in Russia from the next Trump administration? Have the conditions put forward by Russia for the start of the dialogue and peace process been met?

I think that definitely, the Kremlin looks forward to Trump’s return to the White House, although it has little hope for a shift in U.S. policy. Trump’s figure is extremely contradictory. On the one hand, he intends to end the conflict as soon as possible. On the other hand, he is unpredictable, and facing the first difficulties in organizing the negotiation process, he may take tough measures to accelerate escalation.

Regarding the conditions for dialogue, Russia’s demands, such as recognition of annexed territories and lifting sanctions, have not been met. These remain major sticking points that complicate any prospect of meaningful negotiations under the current geopolitical climate.

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