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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

Europe from Lisbon to Vladivostok will revive, Deripaska says

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One of Russia’s wealthiest men, Oleg Deripaska, announced his belief that the project to create a unified economic zone between Russia and Europe, stretching from Lisbon to Vladivostok, will be revived.

In a statement on his Telegram channel, Deripaska noted that this project would exclude Britain.

Deripaska stated, “The inevitable rapprochement after the conflict between Russia and Germany will completely change the political map of the European continent and lead to the revival of the project to create an economic zone from Lisbon to Vladivostok. This situation, along with Scotland’s secession from the United Kingdom, will definitively bury the British Empire in history.”

Deripaska stated that Britain’s problems have been accumulating for years, chief among them being “the virtual bankruptcy of public finances” and the complete failure of Brexit hopes.

Deripaska added, “No one came up with the dream of creating a Singapore on the Thames, and there was no desire for it in a society full of leftist ideas and not inclined to meticulous work.”

Deripaska assessed, “The collapse of the legal system and the terrible incompetence of judges in London have virtually destroyed the investment environment, and tax changes for foreigners have completely finished this situation.”

“But the worst is yet to come,” said Deripaska, adding, “All we have to do is wait and ignore the audacious ideas like ‘boots on the field.’ Let them crow a little.”

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Ukraine retreats from most occupied areas in Russia’s Kursk oblast

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According to military analysts and soldiers who spoke to The New York Times (NYT), the Ukrainian army has withdrawn from almost all of the territory it occupied in Russia’s Kursk oblast.

As a result of Moscow’s counterattacks, Ukraine’s months-long operation to seize and occupy Russian territory is nearing its end.

At the peak of the offensive, the Ukrainian army controlled approximately 1,295 square kilometers of Russian territory.

According to Pasi Paroinen, a military analyst at the Finland-based Black Bird Group, as of Sunday, the Ukrainian army was trying to hold on to a narrow area of approximately 78 square kilometers along the Russia-Ukraine border.

“The end of the war is coming,” Paroinen told the newspaper.

While the amount of Russian territory under Ukrainian control could not be independently verified, intense fighting was reported in the region.

With Russia’s rapid advance, supported by continuous air strikes and drone attacks, the Ukrainian army withdrew last week from several villages in Kursk oblast and from Sudzha, the main city they controlled.

The General Staff of the Ukrainian Armed Forces announced that the troops had withdrawn to more defensible areas inside Russia and were taking advantage of the rugged terrain to provide better fire control against the approaching Russian forces.

On Sunday, it published a map showing the narrow area that Ukraine still controlled in Kursk oblast.

However, it remains unclear how long the Ukrainian army will be able to hold this area.

Ukrainian soldiers stated that the ongoing fighting in Kursk is no longer about holding Russian territory, but rather about controlling the best defensive positions to prevent the Russians from entering Ukraine’s Sumy oblast and opening a new front in the war.

An assault company commander, who identified himself only by his radio code, Boroda, said in a telephone interview, “We continue to maintain our positions on the Kursk front,” and added: “The only difference is that our positions have moved significantly closer to the border.”

Military experts say that although Ukraine’s withdrawal from most of Kursk oblast was rapid, it came after months of Russian attacks and bombardment that gradually weakened Ukraine’s foothold in the region and cut off supply routes, eventually making withdrawal necessary.

Austrian military analyst Franz-Stefan Gady, who visited Ukraine’s Sumy oblast on the Kursk border last month and met with Ukrainian commanders, said, “What has happened in the last few months was an operation that prepared the conditions for a successful advance.”

Serhiy Kuzan, the head of the non-governmental organization Ukrainian Center for Security and Cooperation, said, “There was no danger of encirclement of Ukrainian troops, and there is no evidence to the contrary.”

Meanwhile, Trump’s special representative for the Middle East and also a mediator with Russia, Steve Witkoff, told CNN on Sunday that he expected Trump to meet with Putin this week.

Witkoff said he had a positive three-to-four-hour meeting with Putin last week. While refraining from sharing the details of their discussions, Witkoff expressed his continued optimism that an agreement could still be reached.

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Kremlin rejects temporary ceasefire in Ukraine, seeks long-term solution

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Yuri Ushakov, aide to the President of Russia, stated that Moscow is interested in a long-term resolution to the war in Ukraine and does not want a temporary ceasefire.

In an interview with Rossiya-1 television, Ushakov said, “We believe that our goal is a long-term peaceful solution; we are trying to achieve this. We want a peaceful solution that takes into account the legitimate interests and known concerns of our country. I think that steps imitating peace actions will not benefit anyone in this situation.”

Ushakov also mentioned that he conveyed Moscow’s position on this issue to US National Security Advisor Michael Waltz.

“Of course, I interpreted the agreements on the temporary ceasefire and stated our position that this is nothing more than a temporary respite for the Ukrainian army,” he added.

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