Russian energy giant Gazprom has announced a significant decline in net profit for 2022, with a drop of 41% attributed to a tax increase. The company's profit for the year amounted to 1.2 trillion rubles ($15 billion), down from 2.1 trillion rubles in the previous year. Gazprom stated that the increase in tax payments during the second half of the year had impacted profit margins.
The company's board has recommended withholding dividend payouts in light of the financial results. Gazprom, led by Alexei Miller, a close ally of President Vladimir Putin, has faced substantial challenges due to Western sanctions and the ongoing conflict in Ukraine. European imports of pipeline natural gas from Russia, according to the Gas Exporting Country Forum, decreased by 55% in 2022.
As a result, Gazprom has been seeking to shift its focus towards the Asian market, with China emerging as a key economic partner. The Power of Siberia pipeline has played a crucial role in supplying gas to China, with Gazprom reaching a daily record in gas volumes delivered in March. The pipeline also achieved an all-time high of 15.5 billion cubic meters of deliveries in 2022. However, redirecting gas exports and building the necessary infrastructure is a time-consuming and costly process.
Looking ahead, Gazprom plans to begin construction of the Power of Siberia 2 pipeline in 2024. As the world's largest holder of gas reserves and employing approximately half a million people, Gazprom remains a vital component of Russia's economic growth. However, the company continues to face challenges as it navigates changing global energy dynamics and geopolitical tensions.
