Russian hydrocarbon (Oil and Gas and Coal) Industry: News #5

After losses in 2023 Gazprom seems to have recovered a bit in 2024 despite sanctions only getting tighter and more extensive...

Gas for domestic consumers got more expensive. Probably, another bump in the price is in the books for upcoming year due to announced wind down of exports to Europe and need to finance future projects, as their CAPEX was slashed to very low levels previously.
One thing that could be good is to cut workforce numbers, as they have too many. These people wouldn't have any problems finding another job with present state of job market.
Not that i think workforce cuts will happen.

Merkel keeps looking worse and worse as time goes by in terms of her legacy for Germany and its economy and future... BTW the pipeline through Mongolia would be a bit more expensive and China didn't want to invest in that so it would be more expensive than the alternatives. The line through Kazhakstan is easier and cheaper and Kazhakstan will buy gas too and will put in infrastructure to use it in their country so they wont just be a transit country but also a customer too. Transit fees for Chinese gas will subsidise their own energy... it is a bit of a shame Mongolia might miss out on that... most countries would appreciate transit fees and cheap energy... most countries outside of the EU that is.. wrote:

I have to admit I did have respect for her at the time, not aware what a snake she was. In hindsight Putin shoulda let the dogs attack!! Woulda been better for EVERYONE.

@Garry

There is no substantial US supply. US LNG is a scam because the US does not have enough spare capacity in gas production to feed Russia's
former supply to the EU. The US imports a big fraction of its gas from Kanada. Currently, the tight gas "revolution" in decline. As usual we
had gross exaggeration of US gas supply based on BS about tight gas. The same clown media and pundits who claimed that the Green River
formation has over a trillion barrels of oil are the ones who pushed this BS.

So the congenital retardation in the EU "ruling" class is terminal.

Putin's pet dog is too cute to attack Merkel. Her BS about being terrorized by it is ludicrous. As if it lunged at her or something. What a rotten
smelly bitch she is. Fully consistent with her laughing about "fooling" Putin with the Minsk Accords.

Statement by Russian MFA on the cessation of gas transiting Ukraine:

    Kiev refused to extend the agreements of PJSC Gazprom with Naftogaz of Ukraine and with the Operator of the Gas Transmission System of Ukraine. The documents expired on January 1, 2025, and from the same day, the transit of Russian gas to Europe through the territory of Ukraine was stopped. It should be emphasized that the Kiev authorities have decided to stop pumping blue fuel from Russia for residents of European countries, despite the fulfillment by Gazprom of its contractual obligations.

    The cessation of supplies of competitive and environmentally friendly Russian energy not only weakens the economic potential of Europe but also has the most negative impact on the standard of living of European citizens. The geopolitical background of the decision of the Kyiv regime lies on the surface. The main beneficiary of the redistribution of the energy market of the Old World and the main sponsor of the Ukrainian crisis is the United States. The first victim of their predatory strategy has already become the largest European economy – Germany, which, after blowing up the Nord Stream and Nord Stream 2 gas pipelines, was forced to buy natural gas at significantly higher prices and moved to curtail a number of the largest and legendary German industries. Other countries of the formerly economically successful and independent European Union will now have to pay the price for American patronage.

    The responsibility for stopping Russian gas supplies lies entirely with the United States, the puppet Kiev regime, as well as the authorities of European states, which sacrificed the well-being of their citizens for the financial support of the American economy.

Interesting map but well out of date as Southstream is still there and Turkstream is not there but is operational.

Without Nordstream and pipelines in Ukraine, now only Turkish gas pipelines connect Russian gas to the EU

The European continent has thus become completely dependent on Turkey for energy, Greek media note.



https://x.com/SprinterFamily/status/1874774145222983966

These retarded U-rope decider f*cks think that the US can supply them with 100+ bcm/year of gas through LNG. The US has nowhere near
such an export capacity. The EU reduced its gas consumption between 2021 and 2023 by 100 bcm/year and consumed 295 bcm in 2023. This
is a catastrophic contraction that will keep going. Russia supplied from 140 bcm to 200 bcm per year in the 2010 to 2020 period.

Mercouris' latest video is rather lame since he goes along with this BS. He even cites the ludicrous 5% of EU's supply comes from Russia claim
without comment and context. There is no way that only 5% still comes from Russia. It's LNG input is much larger than this. What we have
is the usual lying by the NATzO west. They are attributing Russian LNG to the USA and Qatar. This retarded game can be played because
LNG tankers are often "rebranded" and deliver different source gas to the customer. EU orders to Qatar and the USA are filled substantially by Russia.

On January 11, 2025, the Kiev regime, in order to stop gas supplies to European countries, attempted an attack using nine aircraft-type UAVs on the infrastructure of the Russkaya compressor station in the village of Gai-Kodzor (Krasnodar Krai), which supplies gas through the Turkish Stream pipeline.

During the repelling of the raid by air defense units, all UAVs were shot down .

There were no casualties among the compressor station maintenance personnel and no damage. As a result of the fall of fragments from one UAV, the building and equipment of the gas measuring station on the territory of the Russkaya compressor station received minor damage.

The emergency response teams of PAO Gazprom promptly eliminated the consequences of the falling fragments and restored the equipment.

The compressor station supplies gas to the Turkish Stream pipeline in a normal mode. No failures in operation have been detected.

Ministry of Defense of Russia

All of the sanctions rest on the notion that Russia needs to export oil to run its GDP. This rabid delusion will keep going until the
NATzO west deciders leave the scene.

The reason that there is any effort to keep exports going is to avoid sealing extraction wells. There is not enough storage capacity for the Russian
oil to be parked for a few years. Sure, tankers can be used as storage but this requires a vast number of them. It would be better if
Russia simply downsized its exports. This would help with the inflation "problem" by injecting less money into the economy.

There is something wrong with that statement and of course Arrow wont be keen enough to pick it up, but I would wager someone else should have.

Question is: Then what oil will India be buying then? Since All Russian oil and gas has been sanctioned now and US is only targeting the tankers, then India is breaking the 20 year agreement already they just signed. Since US sanctions does not really apply outside of USA, that would mean India does recognize US law over its own. And due to the fact that India signed a 20 year deal, means either: (1) they dont actually care about these and will just be buying Russian oil regardless and say " its not from that company anyway" or (2) they are dumb enough to break agreements already and will face a heavy penalization for breaking that to begin with.

Since India is barely functioning state with current prices of petrol, they know it will end up costing them dearly so they aren't that stupid to fall for this. So either they will just say "pinky swear, we arent buying that oil" or they are that dumb and realize they just cost themselves a competitive market and China is gonna run even more laps around them.

Regardless, Russia doesn't care much if at all, as KVS said, oil rent isn't enough to cost them their economy. The issue will be India.

I think the incentive is for India to solve this problem. If Russian tankers offload in India, is the US going to sanction Indian ports? The deciders in the
US are trying to use India as some bulwark against China.

I see the diesel prices here in Kanada have jumped again. Binden-tard and his collection of neocon loons are shooting themselves in the foot with their
rabid obsession with damaging Russia.

India doesn't solve problems.  If it doesn't create problems, it just sits on problems and pretend it doesn't exist.

The issue is, who will blink first?  India or USA?

India already broke US sanctions by purchasing Russian oil and Gas in the first place.  For them to say "we wont accept sanctioned oil from Russia" doesn't make sense and either its an old article from years ago and Arrow is trying to pretend to be smart posting it now, or there is some kind of collective rot in the brain that people are forgetting the oil and gas has been sanctioned for years.

Also, if it is entirely that the "tankers are being sanctioned", well, that isn't up to India to decide.  If Russia turns around and says "well then, come get it yourself and we are not taking money off of it because we were supposed to deliver it but you decided to go with US sanctions" or "well, too bad, either we deliver it or you are breaking the agreements, so bugger off", India is then put in a bad position.

Russia has already mentioned the trade imbalance with India and the fact they cant even make use of the Rupees from India, since most people don't want Rupees.  India is in need, badly, of the oil since they are net importer of it and process it.  Their entire economy right now is trying to invest in infrastructure and logistics.  Well, guess what happens when petrol prices are too high?  Their competitiveness drives down to zero.

China doesn't care.  They let shell companies get hit as they import cheap Russian oil and gas.  In turn, Russia could use the oil and gas excess for nation building in North Korea and in various allied states in Africa.  Cheap energy for them will make them even more competitive.

People have this mistaken belief that Russia relies on exports to survive.  They do not.  Exports is a big bonus to its accounts surplus, sure.  But overall, it has dwindled a lot over the years and domestic consumption is what matters.

If the excess oil and gas also hits the Russian market, it makes their development even more lucrative and cheaper and competitive.

India on the other hand is trying to play a game.  It is a member of BRICS and what is funny is that the rules in BRICS dictates that you cannot follow sanctions to a country economically.  Meaning, India is even breaking BRICS rules.

This can end very badly for India, especially with the events that happened in Bangladesh and now you got the Kuki extremists in Manipur trying to carve out a christian state around India (all backed by USA and UK BTW).

Edit:

What I see will happen is this (which already happens and how it ends up EU and US buying Russian oil and gas):

The tankers are gonna reach Russia second or third trip. Pick up the oil and gas. Move down to some other country port to pick up some oil and gas. Then the barrels are moved around and oil and gas now are no longer Russian but lets say Dutch or Iraqi or whatever, and then boom, its sold to India.

It's a start. More should follow.

https://lenta.ru/news/2025/01/13/v-gazprome-gotovyat-massovye-uvolneniya-tsentralnyy-apparat-kompanii-sokratyat-v-poltora-raza/

Gazprom is preparing mass layoffs. The company's central office will be reduced by half

Gazprom has confirmed information about mass layoffs in the central office

The central office of Gazprom will be reduced by more than half - from 4.1 thousand to 2.5 thousand people. Such a proposal was sent to the head of the corporation Alexey Miller by Deputy Chairman of the Management Board Elena Ilyukhina.

According to the publication 47news, Ilyukhina stated that the challenges facing the Gazprom Group require a reduction in the time frame for preparing decisions, the elimination of duplicate functions and excessive bureaucratic processes, the need to increase the focus on results of employees involved in the implementation of key corporation processes, as well as the optimization of costs at all levels of management and production processes.

Over 20 years, the number of Gazprom administration employees has increased several times

The document also states that over the past 20 years, the number of employees of Gazprom administration and the branch in St. Petersburg has increased several times and reached 4,100. At the same time, the company's employee payroll exceeds 50 billion rubles per year.

Ilyukhina proposes to use the released funds for measures to increase the motivation of the remaining employees and personnel development. She also believes it is necessary to accelerate the processes of automation and digitalization.
In addition, the letter proposes to establish indicators of general and individual efficiency for all employees and to give more opportunities to managers to award bonuses depending on the results of their work. 47news sources claim that large-scale changes indicate a change in the entire management structure of the corporation. Deputy Chairman of the Management Board of Gazprom, Head of the Information Policy Department Sergey Kupriyanov confirmed the authenticity of the letter. "The document is relevant. We do not plan to comment," he noted in a conversation with Forbes.

In 2023, Gazprom became the company with highest losses in Russia

In October 2024, it became known that, based on the results of 2023, Gazprom topped the rating of the most unprofitable Russian companies, with a minus of 583.1 billion rubles according to international financial reporting standards (IFRS).
The corporation became a leader after a highly successful 2022, in which it managed to earn 1.3 trillion rubles. However, as the publication notes, Gazprom's first loss in 25 years was mainly due to the depreciation of non-financial assets and exchange rate differences, while net cash flow from operating activities increased during the same period. At the same time, against the backdrop of a record loss, the company achieved a reduction in its tax burden. The government agreed to cancel the surcharge on mineral extraction tax starting in 2025, as a result of which revenues from the gas industry in this part will fall by almost one and a half times, to a trillion rubles.

Caveat, maybe you are not knowledgeable or able to comprehend something but:

Gazprom is massive.  And to add to that, as the article states, top heavy in administration.

Guess what also falls under Gazprom, something that is a huge problem even for Russian authorities - its rather biased gazprom media group.

Gas sales have been massive and if a company cannot profit from it, then that means there are issues.

https://tradingeconomics.com/gazp:rm:operating-profit

Gazprom is trimming the fat. Those corpos at the head office that will get laid off don't pump out the gaz or lay the pipe.

They are not denuding themselves of essential capability unlike American style layoffs.

I was calling here for Gazprom to start shedding workforce before already.  My comment doesn't mean that they will go under, but that they are badly run and have way too much workforce. They had 500k workers in 2023. This is way too many and inefficient.  They can easily shed 10% and achieve everything they need. Anyway, Russia has a worker shortage and some freed up workforce will find employment fast. As for this downsizing, this is mostly paper pushers and people that don't do much for the company.  FYI, doubling positions and employment of unnecessary people is very common in state owned companies. And not only in Russia. Rosneft would bemefit from same treatment.


What you thought i knew or could or couldn't comprehend is meaningless and immaterial for tnis subject.

Gazprom stocks are still good too:

https://tradingeconomics.com/gazp:rm

If only I could buy them.

Edit: Gazprom operating profits for 2024 was 300B rubles. So how are they losing then? Something doesn't add up and my guess is it isn't their gas industry part that's causing issues.

Regarding NIS, which is majority owned by Gazprom. Due to sanctions, some sort of a deal will be worked out. Two most probable options that are talked about are that Serbia buys Gazprom owned part or deal with SOCAR.

https://www.danas.rs/vesti/ekonomija/lavrov-nis-ne-moze-biti-nacionalizovan/