(Reuters) -When the CEO of Gazprom, CEO of Gazprom, Alexei Miller, opened a luxurious Italian building in ST PETERSBURG Central to shelter the company’s export arm 11 years ago, funded a future funded by European sales.
“This is symbolic,” he said, referring to the new modern offices in the European city in Russia. “Europe will increase in Russian gas.”
Instead, the luxurious offices symbolize the rapid Gazprom, which fell due to the total loss of European markets nearly after the war in Ukraine, rolling Russia’s relations with the West.
The company is now studying under billions of dollars and defending for savings, and it is now studying Palazzo’s place for sale alongside the other luxury property it owns, according to a CEO of GazProm and another source with knowledge of internal discussions in GazProm.
It can be said that Gazprom is the Russian actions that are difficult to expose the international sanctions imposed on it after Russia has been widely invaded by Ukraine three years ago. Although the Russian economy was flexible, the increasing pressure signs appeared in many industries. Reuters previously reported that President Vladimir Putin was concerned that heavy military spending distorts the wider economy.
Reuters told Reuters that the number of employees in Gazprom Export, which was previously the most prosperous unit of the company, was overseeing Soviet gas sales and Russia for Europe for more than half a century, has shrunk to a few dozen employees only.
This fell from 600 employees five years ago, at the height of Russian exports to Europe. The potential sale of the building and discounts in the unit has not been reported.
The Ministry of Information in Gazprom and the Russian Ministry of Energy did not respond to detailed requests to comment on the results of the story.
With no European sales, the remaining workers focus mainly on litigation with the former European Union buyers. “Just a shell,” said Gazbrom.
Alexei Griffakh, of the pro -Kremlin Research Fund at the National Energy Security Fund, said that the least luster concentration of Gazprom in the near future is to bring gas to Russian homes.
“Gazprom has been handed over the social task of boosting and securing gas supplies to the economy and population at low, organized prices,” said Gazprom.
Reuters spoke to three executives and half -Dzina of former and current employees about this story about the depth of change while it was the most companies in Russia. Each request is not to be identified, noting the fear of professional repercussions.
Wide discounts
Gazprom problems reveal beyond the export unit, and talks are also revealed with employees. Two sources told Reuters that Miller has now agreed to plans to reduce 1500 jobs at the headquarters of the parent company in Russia and the tallest skyscraper in Europe, the British designer Khatta Center, in St. Petersburg as well.
The dismissal was not announced at the Gazprom headquarters, but employees were asked to prepare individual offers about the reason for keeping their jobs, according to one of the sources, who said that the employees had been asked to describe their job jobs in the event of interference.
The source said that the operation is expected to be completed within a few weeks.
The discounts add up to about 40 % of the employees at the GazProm headquarters, but a small part of the powerful workforce is half a million, spread throughout Russia.
The administration, which was offended how the European capitals were firm, according to one of the executives, who said that thinking within the company is that Europe will quickly return to “begging” to resume Russian gas.
Despite the economic pain to increase energy costs, the European Union has not retracted the sanctions.
“We have proven wrong,” said CEO.
American gas exporters soon moved to replace Russian gas in Europe. The United States has become the largest exporter of liquefied natural gas to the continent, with triple supplies since 2021. Europe is still buying LNG in Russia (LNG), but mainly from the involving of Gazprom, Yamal LNG LNG in Novatek.
The European Union aims to end its use of Russian fossil fuel by 2027 and its general gas consumption partially decreased due to the transformation of renewable energy sources.
Last year, Gazprom recorded a net loss of $ 7 billion for the year 2023, the first since 1999, the year in which Putin reached power. Another loss was published in the first nine months of 2024, which is the last period in which numbers are available.
The price of the Gazprom share in mid -December decreased to its lowest level since January 2009, when it touched 106.1 rubles, a decrease for more than a third since the beginning of 2024.
A few months after announcing the annual loss, Gazprom said last year that she was selling a group of high -end real estate that includes luxury hotels known in Moscow and in the Armenia Valley of flowers.
GAZPROM has a long history of investing in luxury property, which it uses to reward employees with holidays, host conferences and events such as the 2014 Olympic Games.
Trump Trade
Alpha Bank said in a memorandum last month that Donald Trump’s return to the White House helped to recover the price of Gazprom to about 180 rubles in the hope that a quick Ukrainian peace agreement will lead to the restoration of exports to Europe.
However, there are a few signs that the continent will accelerate to connect itself with Russian gas, although the Vinanchel Times times have reported that a long -time ally in Putin is pressuring the United States to allow investors to restart the Nord Stream 2 pipeline carrying gas from Russia across Germany. Germany says it will adhere to the policy of independence from Russian energy.
Even if there is appetite, Nord Stream is out of service and partially damaged.
“This depends on many things,” said Cederic Cremers, CEO of Integrated Gas at Shell.
He cited multiple arbitration issues with Gazprom and asked, “Are customers and Europe still wanting the same dependence on Russian gas?”
Gazprom’s share in the European Union markets has diminished to 7 % of more than 35 % before the European Union sanctions, as the European Commission data appears.
The market value as of Wednesday is about $ 46 billion, a decrease from the highest level at all times, amounting to 330.9 billion dollars in 2007, according to accounts in Moscow Securities, Jazbrom and Reuters.
Miller’s time
Since the company adapts to its new role as a local gas supplier, the ambitions of the CEO of Miller have been destroyed. In 2007, Miller said the company will eventually get the market value of $ 1 trillion.
At that time this seemed possible. Russia has five gas resources on the planet, making Gazprom the largest natural gas company in the world through reserves.
At its height, Gazprom – which was formed in the Soviet Union of the Ministry of Gas Industry – achieved revenues representing more than 5 percent of the annual GDP in Russia, which is trillion dollars.
The company has managed a close friend of Putin since the Russian mayor Saint Petersburg has been in the 1990s, over the past 24 years. Miller has been listed in the US sanctions list since 2018, as American citizens and entities were of any dealings with him.
Gazprom controls the entire cities in Siberia and the Northern Pole, such as Nadyym, where tens of thousands of employees and their families depend on them as a single employer. Yuri Shafranik, Russian Minister of Fuel and Energy from 1993 to 1996, told Reuters in 2023 that Gazprom was a “state within the state.”
The sources that Reuters spoke to the job cuts plans or the closure of production assets in these cities of the company did not describe.
Very far away?
Putin’s long -term promise to replace European markets exports to China is optimistic at best. Even the most ambitious projects that are currently considered in the east gas gas will not reach half of the previous annual peak exports of 180 billion cubic meters (BCM)
Many Russia’s gas passed through pipelines to Europe. When Germany and other European countries stopped buying it, there was no other place to go to go.
On the other hand, oil sources in Russia were able to redirect the tankers to refineries in the Asian countries that have not imposed sanctions.
Although gas production has been recovered slightly in the past year from a record decrease in 2023 by increasing domestic demand and exports to China, there is a minimal pipeline capacity to expand that trade.
Currently, there is only one path for Russia to supply the pipeline in China – the power of the Siberia pipeline, which transports 38 cubic meters annually.
There is a second smaller pipeline with a capacity of 10 BC in the year under construction, which is scheduled to link Sakhlin Island in the Pacific Ocean to China by 2027.
Russia and China were in talks for more than a decade on building a third pipeline, the Siber 2 power, to carry 50 BC and Ten Ten away from Chinese gas consumption. This plan will take years to develop completely and discussions have stopped due to price differences, according to media reports.
In May, Russian Deputy Prime Minister Alexander Novak said that Russia and China expect that the signing of a contract “in the near future” on the Siber 2 pipeline power.
Putin and Chinese President Xi Jinping discussed the Siberian -2 power in January, news agency Interfax reported, but no agreement was reached.
China National Petroleum Company, which deals with Gazprom, refused to comment on the talks. The government of Russia did not respond to the request for comment.
Even if the power of the Siberia 2 pipeline is quickly completed, the folders and pricing conditions are likely to be much lower than previous exports to Europe, analysts from the World Energy Policy Center at Columbia University.
They said in a research note last year: “By 2030, Russian gas export revenues may decrease by 55-80 percent compared to 2022, a year of record revenues for the Russian gas industry, by $ 165 billion.”
(Participated in Reuters reports, written by Simon Web and Frank Jack Daniel)
