By Brendan Cole
May 9, 2024
Newsweek
Gazprom, the energy giant at the heart of Russia’s economy, has announced it is selling property in Moscow, one week after posting record losses linked to restricted supplies to Europe linked to Vladimir Putin ‘s invasion of Ukraine.
The company said on Wednesday that the properties include office and non-residential buildings, a car parking lot in the capital, and the Imperial Park Hotel and spa sanatorium and resort complex in Rogozino village, just outside of Moscow. “Gazprom is engaged in a fire sale. They had their worst year in decades, and their production has fallen precipitously, down to what it was in the 1970s,” said Tom O’Donnell, an energy and geopolitical analyst based in Berlin . “This is a result of a miscalculation by Putin,” he told Newsweek .
In announcing the real estate sale, Gazprom posted a statement on Telegram next to phone numbers for prospective purchasers. “Taking into account the completion of the relocation of the Gazprom Group companies to St. Petersburg, PJSC Gazprom is announcing its intention to sell real estate in Moscow,” the statement said.
Newsweek reached out to Gazprom for comment via email.
Until 2023, the majority state-owned multinational energy corporation headquartered in Putin’s home city, St. Petersburg, was the world’s largest publicly listed natural gas company and Russia’s biggest company by revenue.
However, last week, Gazprom Group, which also includes oil and power businesses, posted a net loss of 629 billion rubles ($6.9 billion) for 2023, according to Bloomberg, its first loss since 1999.
Core profit, or earnings before interest, taxes, depreciation, and amortization (EBITDA), slumped to 618.38 billion rubles in 2023 ($7.2 billion) compared with 2.79 trillion rubles ($25.1 billion) in 2022, the agency said.
Gazprom has restricted gas flows to Europe amid the Kremlin’s retaliation for Western support of Ukraine. Decreasing gas prices due to mild weather, sluggish demand, full inventories, and Western sanctions have also hurt Russia’s revenues.
O’Donnell, a fellow at the Wilson Center think tank, said that before the full-scale invasion, Russia had supplied Europe with 40 percent of its gas, and Putin had been planning to make the continent more dependent on its energy export.
He said that before the war, Putin had cut off gas, mostly through the Nord Stream pipelines and conduits through Belarus and Poland in what was “part of his war strategy.” “It was intended to
shock Europe and force them into submission with an energy war to prevent their acting in solidarity with Ukraine. To his surprise, this did not happen,” O’Donnell said.
Gazprom has not published its export statistics since the start of 2023 but Reuters said its calculations showed that the energy giant’s natural gas supplies to Europe had slumped 55.6 percent to 28.3 billion cubic meters (bcm) in 2023.
Last October, Gazprom said in the first half of 2023 that gas production in the first half of 2023 had decreased by nearly a quarter (24.7 percent) which independent Russian-language news outlet Agentstvo reported was the lowest since Soviet times.
Brendan Cole is a Newsweek Senior News Reporter based in London, UK. His focus is Russia and Ukraine, in particular the war started by Moscow. He also covers other areas of geopolitics including China. Brendan joined Newsweek in 2018 from the International Business Times and well as English, knows Russian and French.