Gazprom

Article

May 17, 2022

Gazprom (Russian: Открытое Акционерное Общество «Газпром»; Otkrytoye Aksionernoye Obshchestvo "Gazprom") or Gasprom (short for Russian: газовая промышленность, the largest natural gas company in the world) and the largest gas company in the world. It supplies natural gas to many countries in Europe, especially ex-Soviet states and countries in Central and Eastern Europe. The Russian federal government acquired a majority stake in the company in 2005 and still held 50.23% of the shares at the end of 2020.

Core data

Gazprom controls 17% of global gas reserves and 12% of global gas production (2017) 72% of Russia's natural gas reserves (2017) share of Russian gas production was 68% (2017) market share in Russian gas consumption was 70% and in Europe (ex-Russia) 35% (2017) 15% share of Russian electricity production (2017) employees: 469,600 (2017) – with 0.6% of total employment, it is Russia's largest employer shareholders: about 0.5 million longest pipeline network for natural gas in the world: 172,100 kilometers of natural gas pipelines (2017)

Activities

Gazprom is the largest producer of natural gas in the world and a major producer of petroleum and natural gas condensate. The main customers are Russian buyers and export mainly to Europe. The activities are classified as follows: production of natural gas; transportation of natural gas through a large pipeline system; distribution of gas at home and abroad; storage of gas in underground storage facilities; production of crude oil and natural gas condensate; refining oil into petroleum products; generation and sale of electricity and heat; and other activities including financial services.

Reserves, production and export

As at the end of 2020, Gazprom had a 70% share of Russia's total gas reserves; or 33.575 billion m³ (2008: 33.100). These reserves have been calculated on the basis of the Russian method. This differs from what is customary internationally. The Russian method only considers the geological characteristics of the gas deposits, while the international method also takes into account economic elements. Natural gas that can only be produced at a loss is not included in the reserves. Based on the international calculation method, Gazprom's gas reserves are about a third lower. In 2020, Gazprom produced 455 billion m³ of gas, 47 million tons of petroleum and 16 million tons of natural gas condensate. Gazprom also buys gas from the former states of the Soviet Union such as Kazakhstan, Turkmenistan and Uzbekistan. These countries often do not have their own network or a network that is too small to export gas to European markets and the only export option is via the Gazprom network. Much Russian natural gas is exported to ex-Soviet countries and Europe. Gazprom is the only one allowed to export the gas by pipeline, the sale of liquefied natural gas by tanker is open to other parties, including Novatek. About a fifth of the export to Europe goes to the former Eastern Bloc countries and the rest to Western Europe. Within Western Europe, the Netherlands was the largest consumer of gas with a share of 48 billion m³, followed by Germany (41), Italy (21) and Turkey (16). Western Europe covers about a third of the gas needs from Russia. Below is an overview of Gazprom's gas sales by region: The figure clearly shows that gas is cheap for domestic customers. The Russian government regulates the gas price and had a policy of keeping it low. This policy has been changed since the beginning of 2008 and gas prices are being increased step by step. This is not clear from the figure above, because here the amounts are shown in US dollars. In local currency, the domestic gas price has increased from 1300 rubles per 1000 m³