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Gazprom is circling the toilet.

By Hugolas_Madurez following x   2015 Aug 12, 6:34pm 2,836 views   17 comments   watch   nsfw   quote     share    

How Russian energy giant Gazprom lost $300bn.

It was not too long ago that Gazprom, Russia’s state-controlled energy conglomerate, was one of the Kremlin’s most powerful weapons. But those days now seem like a distant memory. Today, Gazprom is a financial shadow of its former self.

The speed of Gazprom’s decline is breathtaking. At its peak in May 2008, the company’s market capitalisation reached $367bn (£237bn), making it one of world’s most valuable companies, according to a survey compiled by the Financial Times. Only fellow Exxonmobile and PetroChina were worth more. Gazprom’s deputy chair Alexander Medvedev repeatedly predicted that within a decade the Russian energy giant could be worth $1 trillion.

That prediction now seems foolhardy. Since 2008, Gazprom’s value has plummeted. In early August it had a market capitalisation of $51bn – losing more than $300bn. No company among the world’s top 5,000 has suffered a bigger collapse, Bloomberg Business News reported in April 2014, and by the end of the year net income had fallen by an astonishing 86%.

Though share prices have rallied slightly since, indicators suggest Gazprom has further to fall. Lingering uncertainty raises questions about whether it can survive, with production continuing to tumble downward.

So what happened? Why is a company with the world’s largest gas reserves, operating in a country bordering China and the European Union – two of the world’s top energy consumers, performing so badly?"


1   HonkpilledMaster   ignore (4)   2015 Aug 12, 6:44pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

This might, maybe, possibly, be the Main Reason:

Much of a market cap of a gas company is in the value of it's reserves. It wouldn't be surprising that if nat gas prices collapsed from over $13 to under $3, much of it's market cap would be wiped out.

The author knows this because he chose May 2008 deliberately for his comparison, this was the very peak of Nat Gas prices in decades; therefore he picked that time for his comparison to today, when Nat Gas prices are circling the drain.

2   justme   ignore (0)   2015 Aug 12, 8:30pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Time for Goldman Sachs to get in and buy the reserves for a pittance, while leaving the current Gazprom shareholders with the losses. Then engineer a shortage or maybe a war or two, and presto, reserves will suddenly be worth a lot of money.

That also seems to be the game plan in Brasil, with Petrobras (PBR).

Nice work if you can get it.

3   justme   ignore (0)   2015 Aug 12, 8:35pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Hmm, maybe it is time to buy some?


Is OGZPY a real ownership of Gazprom or is it some 2nd-class stock of some sort?

4   Hugolas_Madurez   ignore (4)   2017 Jun 2, 3:36pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

The circling of the toilet continues:

Ukraine wins battle with Gazprom in contract clash

A three-year clash between Russia and Ukraine over the terms of a gas contract signed in 2009 has reached its critical point. In a move marking a major defeat of Russian state-controlled gas monopoly Gazprom, a Stockholm arbitration tribunal ruled in favor of Ukraine's Naftogaz, satisfying its claim to review disadvantageous conditions of the gas deal with Russia.

The arbitration rejected the claim by Gazprom to apply the so-called take-or-pay clause, which stipulates that Naftogaz pay for the annual gas supplies envisaged by the contract even if the company in fact purchased less gas than the contract terms had assumed. Gazprom demanded that Ukraine pay as much as $34.5 billion (30.6 billion euros) under this clause.
In a reciprocal move, Naftogaz requested a review of contractual gas prices. According to the agreement, the price Ukraine was paying for the Russian gas was bound to oil prices. As a result, during the years when oil prices were high, the gas price for the country was significantly above that for Gazprom's customers in Europe. In its claim with the court, Naftogaz demanded $18 billion in compensation for this price gap. The company also asked that a ban on re-exporting excess gas volumes stipulated in the gas deal with Russia be lifted. In its decision, the court satisfied these two claims as well.
Timothy Ash of BlueBay Asset Management suggested the court might oblige Gazprom to pay a significant award to its Ukrainian partner, "and I can't see Gazprom not paying." Ash also said that the ruling was rebalancing the relationship between Gazprom and its customers.

In a note for investors, Russian bank VTB Capital said the cancellation of the take-or-pay clause "looks like a loss for Gazprom, which tried to defend it as an important part of any long-term gas delivery contract." Its analysts also suggested this might have additional consequences for Gazprom's other contracts with consumers in Europe.

According to Krutikhin, the Russian gas monopoly "will have to acknowledge the existing reality." Ukraine has not been buying Russian gas for more than a year now, relying on reverse gas supplies from Europe, he noted, adding that the country "is managing well without [Russian gas]."


5   Strategist   ignore (2)   2017 Jun 2, 3:46pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Straw Man says

So what happened? Why is a company with the world’s largest gas reserves, operating in a country bordering China and the European Union – two of the world’s top energy consumers, performing so badly?"

It's something socialists can't understand. The value of a company, oil, gas is determined by the market.
Gassyprom does not innovate. It is dependent on the market only. Just like OPEC.
American innovative giants like Google, Apple, and Amazon rely on the best of what America offers......Capitalism.

6   Hugolas_Madurez   ignore (4)   2017 Jun 2, 4:12pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Strategist says

Gassyprom does not innovate. It is dependent on the market only. Just like OPEC.

It's even worse: Gazprom is basically an arm of Russian government used for (misguided) political ends.

"Gazprom's defeat had been in fact "pre-programmed" by the company itself, suggested Mikhail Krutikhin, a partner with Moscow consultancy RusEnergy. In an interview with DW, he said that in 70 percent of cases over the last four years, consumers of Russian gas in Europe had succeeded in getting the terms of their contracts with Gazprom reviewed, including requirements envisaged by the take-or-pay clause. In all those cases, the Russian company made concessions in out-of-court settlements. Gazprom, however, demonstrated "an absolute inflexibility" in its deal with Ukraine, Krutikhin said.

Krutikhin believes that Russia's tough position in this case has political reasons: "What was going on in relations between Gazprom and Naftogaz is a purely political situation. Gazprom acted as the Kremlin's political instrument, and not as a normal company."

8   Strategist   ignore (2)   2018 May 23, 7:42pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

So sad. Damn Americans........why did they develop fracturing?
9   anotheraccount   ignore (1)   2018 May 23, 9:34pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Yes, this all makes sense. Gazprom is only worth 51B while doing 100B of revenue and paying 6% dividend. Chevron is worth 245B while doing 134B in revenue and paying 4% dividend. How are those companies different again besides being located in different countries?
10   anotheraccount   ignore (1)   2018 May 23, 9:40pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Oh yeah the difference is that Russian oligarchs steal all the profits and buy treasuries with them.
11   Strategist   ignore (2)   2018 May 23, 9:44pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

anotheraccount says
Yes, this all makes sense. Gazprom is only worth 51B while doing 100B of revenue and paying 6% dividend. Chevron is worth 245B while doing 134B in revenue and paying 4% dividend. How are those companies different again besides being located in different countries?

The investors obviously think it matters. If you don't think it matters, the stock price must be undervalued. You should buy some stock.
12   Hugolas_Madurez   ignore (4)   2018 Jun 4, 5:46pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

US considering sanctions on Nord Stream 2 firms: report

An American official has said that the United States is considering imposing sanctions on multinational corporations taking part in the construction of the Nord Stream 2 gas pipeline from Russia to Germany, according to a report.

Kurt Volker, the US special representative for Ukraine, has told a press conference that, while no decision has been made so far, there is an ongoing debate in the United States on whether sanctions should be introduced, Poland’s wpolityce.pl news service reported.

It quoted Volker as saying that potential sanctions would hit European corporations working with the Russians and adding to Europe’s dependence on Russia for energy.

Europe’s 'energy security and stability' at stake

The US State Department spokeswoman said in March that the US government opposed Nord Stream 2 as the project would undermine Europe’s energy security and stability.

Heather Nauert told a news conference at the time that companies engaged in the construction and financing of the pipeline “could expose themselves to sanctions” under a US federal law known as the Countering America's Adversaries Through Sanctions Act (CAATSA).

At a department press briefing in Washington, Nauert said that “firms that work in the Russian energy export pipeline sector could – if they engage in that kind of business, they could expose themselves to sanctions under CAATSA.”

She added: “As many people know, we oppose the Nord Stream 2 project; the United States Government does. We believe that the Nord Stream 2 project would undermine Europe’s overall energy security and stability.”

Nauert also said that the project -- which would carry gas from Russia to Germany while bypassing Poland and other countries in its region -- would provide Russia with “another tool to pressure European countries,” especially Ukraine.

“We’ve seen that – what Russia has done in the past, when they’ve turned off the pipeline in the middle of winter, causing some families to not have heat ... and we think that that is simply wrong,” she said.

According to reports, work has officially begun to build the German section of the contested gas link.

Poland, the Baltic states and Ukraine all oppose the Nord Stream 2 project.

Five Western European energy firms at risk of sanctions?

According to wpolityce.pl, the Countering America's Adversaries Through Sanctions Act could hit five Western European energy companies that have announced plans to pick up half the tab for building the pipeline.

These companies -- ENGIE, OMV, Royal Dutch Shell, Uniper, and Wintershall -- have decided to lend Russian gas giant Gazprom USD 950 million for the construction of Nord Stream 2 and have recently extended the repayment period until 2035, wpolityce.pl said.

13   FortWayne   ignore (4)   2018 Jun 4, 5:49pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

I don’t know, Democrats sure bash it daily like it eats children or something.

Strategist says
So sad. Damn Americans........why did they develop fracturing?
14   HEYYOU   ignore (26)   2018 Jun 4, 8:33pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Burn million year old carbon quickly,no consequences.
It all about the money.
15   Strategist   ignore (2)   2018 Jun 4, 8:45pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Burn million year old carbon quickly,no consequences.

OK you have a point. My point is.....If you MUST burn fossil fuel, lets burn American fossil fuel. Or fossil fuel from our friends.
16   Hugolas_Madurez   ignore (4)   2018 Jun 20, 5:52pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

KIEV, Jun 19 (PRIME) -- Ukrainian energy holding Naftogaz Ukrainy has received an approval of the Commercial Court of London to freeze assets of Russian gas giant Gazprom in the U.K. under a previous decision of the Stockholm arbitration court, CCO Yury Vitrenko said on his Facebook page on Tuesday.

“We have been waiting so far for cancellation of a court of appeals decision on suspension of execution of the arbitration court’s decision in the Netherlands and Switzerland. Still, this did not block us from receiving orders of a U.K. court to freeze Gazprom assets for further enforced recovery. We have just received the orders for Gazprom,” he said.

Ukrainian news agency UNIAN reported that Vitrenko referred to a decision of the Commercial Court of London that stipulated that Gazprom has to submit a list of all U.K. and Welsh assets with a price of over U.S. $50,000 to Naftogaz Ukrainy within 48 hours after receiving the order.

The Stockholm arbitration court ruled earlier in 2018 that Gazprom must pay Naftogaz Ukrainy U.S. $2.56 billion for non-shipment of gas.

17   HonkpilledMaster   ignore (4)   2018 Jun 20, 5:57pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Hassan_Rouhani says
US considering sanctions on Nord Stream 2 firms: report

But Trump is in the pocket of Putin!!!

The MSM who never lies told me so!

Did you get this from Fox News?

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