Gazprom

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Type Public Limited Company
Traded as RTS:GAZPLSE:OGZD
Founded 1989[1]
Headquarters Moscow, Russia
Key people Victor Zubkov (Chairman), Alexei Miller (Vice-Chairman and CEO)
Revenue US $117.62 billion (2011)[2]
Net Income US $31.67 billion (2011)[3]
Total assets US $302.55 (end 2011)[4]
Employees 393,000 (2012)[5]
Website www.gazprom.com


Global Snapshot

Moscow-based Gazprom is primarily engaged in the operation of gas pipeline systems and gas supply to European countries but is also involved in oil production and refining activities. In 2012 Gazprom was the second largest oil company in the world by production[6] and the world's fifteenth largest publicly listed company.[7] It was also the world's largest gas producer, with average daily production standing at 9.7 million barrels of oil equivalent (boe) per day.[8] Via its subsidiaries and affiliates, the company has operations established in the UK, Serbia, Uzbekistan, Kyrgyzstan, Tajikistan, Vietnam, India, Iraq, Algeria, Libya, Equatorial Guinea, Bolivia and Venezuela, among others.[9]

Russia's significant share of the world's gas makes it the country's most important asset and the Economist magazine suggests that this makes Gazprom arguably its most important company.[10] Founded in 1989, Gazprom grew out of the USSR's Gas Industry Ministry and was part-privatized from 1993 with the large-scale sale of state assets in post-Soviet Russia. The Russian Government holds a controlling stake of just over 50% and former Russian president Dmitri Medvedev previously occupied the post of Gazprom Board Chairman.[11] In total the company operates around 70 fully-owned subsidiaries, including one whose shareholder committee Chairman is former German Chancellor Gerhard Schroder. In addition Gazprom also owns a bank, newspapers, radio stations, television stations, film studios, cinemas and real estate.[12]

Gazprom accounts for 18% of the world's gas reserves, 70% of Russian gas reserves and 15% of global gas production. In 2011 Gazprom also presided over 161.7 thousand kilometres (km) of gas pipelines, the largest gas transportation system in the world.[13]

Company Report Highlights

Gazprom's Annual Report for 2010[14] showed a rise of 17.4% in sales between 2009-10, reaching 3,661.7 billion Russian Rubles (approximately US$ 124.4 billion). Net profit also rose by 22.36% in the same period to 775.9 billion RR. Crude oil production increased by 1.3% during the period and gas production by 10.2%.

In natural gas production, the Yamal Peninsula in North West Siberia remained the focus of efforts to implement advanced technology in 2010. Production wells on the peninsula were constructed using heat-insulated pipes that prevented the permafrost from thawing out during the extraction of natural gas. However, efforts were also made to develop conventional projects on the continental shelf such as the Kirinskoye field, as part of the Sakhalin-3 project. The launch of the construction of the Portovaya compressor station in 2010 is hoped to ensure gas transportation through the Nord Stream gas pipeline, the first line of which has been laid. On the international front, Gazprom made discoveries in Algeria (Berkine Basin), drilled a second exploration well at the Dzhel area in Uzbekistan and signed an agreement with France's Total to reassign shares for a project at the Ipati and Aquio blocks in Bolivia.

Official Accreditations and Global Perceptions

EITI Supporter Status

As of December 2011, Gazprom was not a supporter company of the EITI.

UN Global Compact

As of December 2011, Gazprom was not a participant in the UN Global Compact.

CSR Review

According to Gazprom's Annual Report 2010[15], the following are the key achievements regarding Corporate Social Responsibility:

  • A 5.4 % reduction in methane emissions into the atmosphere and an 83 % decrease in payment for impacts in excess of limits.
  • The 'number of accidents and incidents at hazardous production facilities' fell from 156 in 2009 to just 115 in 2010.
  • Social programs implemented include the Gazprom to Children program, aimed at developing youth sport activities and creative work, covering 69 Russian regions. Underway since 2006, the Group had to date invested 10.9 billion Russian rubles into the Program and constructed 659 sports facilities.

External Coverage

  • In 2001 Gazprom controversially took over NTV, a television station whose founder was an 'oligarch' who the press claimed had fallen out with President Putin. Furthermore, Gazprom's gas export monopoly over former Soviet countries is seen by many as the Kremlin's most powerful foreign-policy tool and best hope of regaining control over what it perceives as a key sphere of influence.[16]
  • In 2009 Gazprom sparked a Europe-wide energy crisis when it cut off gas supplies to the Ukraine on New Year's Day, following the collapse of price negotiations between the two countries. Gazprom was demanding market rates rather than the subsidized rates which the Ukraine had previously enjoyed, as well as $1.6 billion in backdated bills and another $450 million in fines for late payments from Ukrainian state company Naftogaz. Gas supplies were cut off completely on the 7 January, when Russia accused the Ukraine of siphoning off gas destined for Europe. A similar row had taken place in 2006 when Gazprom shut down pipelines across the Ukraine.[17] A deal was eventually reached, the terms of which implied a move from subsidized to market rates for the Ukraine.

Global Operations by Country

Iraq

Main article: Gazprom Operations in Iraq

Libya

Main article: Gazprom Operations in Libya

Iran

Main article: Gazprom Operations in Iran

Niger

Main article: Gazprom Operations in Niger

References

  1. "Gazprom" Forbes, retrieved 19 December 2012.
  2. "Gazprom" Forbes, retrieved 19 December 2012.
  3. "Gazprom" Forbes, retrieved 19 December 2012.
  4. "Gazprom" Forbes, retrieved 19 December 2012.
  5. "Gazprom" Forbes, retrieved 19 December 2012.
  6. "The World's 25 Biggest Oil Companies", Forbes, 16 July 2012.
  7. "Gazprom" Forbes, retrieved 19 December 2012.
  8. "The World's 25 Biggest Oil Companies", Forbes, 16 July 2012.
  9. "Gazprom OAO" Reuters, retrieved 10 October 2011.
  10. "http://www.economist.com/node/4484349 Russia's energetic enigma" The Economist, 6 October 2005.
  11. "Gazprom reports quarterly profits of $16bn" The Guardian, 30 August 2011
  12. "In Thrall to Gas: The City Where Gazprom Is King" Spiegel Online, 2 March 2011.
  13. "Annual Report 2010" Gazprom, retrieved 10 October 2011.
  14. "Annual Report 2010" Gazprom, retrieved 10 October 2011
  15. "Annual Report 2010" Gazprom, retrieved 10 October 2011
  16. "http://www.economist.com/node/4484349 Russia's energetic enigma" The Economist, 06 October 2005
  17. "Q&A: Russia-Ukraine gas row" BBC News, 20 January 2009