Posted on 10/22/2008 7:35:26 PM PDT by DeaconBenjamin
Gazprom has produced record quarterly figures on the back of a 72% increase in the value of exports to Europe, but the heavily indebted Russian group warned the credit crunch could hit its cashflow.
The world's largest gas producer earned $18.5bn (£11.4bn) from European sales in the first quarter, triggering more harsh criticism in the west about its decision to establish a gas cartel with Iran and Qatar that could drive up prices further.
Domestic sales at Gazprom grew by only 2% and are now worth less than half its European business, while sales to former members of the Soviet Union slumped by 20%.
Profits rose by 30% to more than $10bn but the company, which has a monopoly on exports from Russia and supplies a quarter of Europe's gas, admitted the global liquidity squeeze would make life harder.
"Such circumstances could affect the ability of the group to obtain new borrowings and refinance its existing borrowings at terms and conditions similar to those applied to earlier transactions," Gazprom said in a statement.
"Deteriorating operating conditions for borrowers may also have an impact on management's cashflow forecasts and assessment of the impairment of financial and non-financial assets."
* * *
But Artyom Konchin, an analyst at Aton Capital in Moscow, said Gazprom's share price had slumped 70% to give the group a value of $100bn, partly because it had failed to convince investors that the scale of investments it wanted to make could be justified at a time when demand may be hit by global economic slowdown.
"Minority investors in particular want to know where the value is coming from," Konchin said.
Gazprom announced on Monday it was establishing a "big gas troika" with Iran and Qatar, described by the Iranian oil minister, Gholamhossein Nozari, as a "gas Opec".
(Excerpt) Read more at guardian.co.uk ...
What’s the matter, Pootie? Somebody yank the rug from under your feet?
The world’s largest gas producer earned $18.5bn (£11.4bn) from European sales in the first quarter.
Expect that number to be cut in half or more next quarter with oil now in the 60s. Those numbers were reflective of 140 oil which is no longer happening.
You mean it will be a cold day in Europe before they pay these prices?
good ol’ american capitalism
hurt putin more than a military invasion of georgia could do.
Russia has two problems.
1) at the current oil prices, they are at breakeven and lower on their countries budget. All those Moscow millionaires driving diamond crusted Bentleys is going to end really fast. Putin wanted to increase military spending by 30% next year. So much for that too. They will be lucky to keep the lights on now in most cities.
2) Putins screwed any chance of new foreign investment in this country after his nationalization spree by his Kremlin billionaires boys club that screwed foreign investors left and right and his stupid invasion of Georgia.
I predict a multi year recession for Russia very soon. Inflation had been skyhigh in that country for years. Probably 5+ years which will wipe out most of the foreign reserves of cash they have been building up during commodities boom.
Oil isn’t what makes Gazprom money - natural gas is where they get their funds. And the price of natural gas has NOT slumped like oil.
No, they’ll cut their profits in half from corruption, bribery, skimming, and loss of sales (strong-arming others)... But not from the fall in the price of natural gas.
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