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.
