Gazprom Reports Loss of 70% in 2014

Russian energy giant Gazprom saw its profits drop by 70% in 2014. The drop is doubtless due to the sharp drop in the value of the Russian ruble, low oil prices and the ongoing crisis in Ukraine. Gazprom has been at the center of the conflict in the Ukraine, as its supply of natural gas to its western neighbor has been cut off more than one.  Officials at the energy major have drawn the ire of politicians both in the European Union and the United States for what they allege to be illegal manipulation of neighboring markets for geopolitical gain.

Gazprom’s oil subsidiary Gazprom Neft faced a series of sharp losses as well. Indeed, the company reported a 32% loss in 2014 compared to the year prior. Oil and gas experts working with Bloomberg predict that Gazprom’s 2015 revenues will be the lowest in more than a decade, a negative omen for a country whose economy depends on its energy revenues for nearly 10% of total revenues.

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News briefs:

  • Iran will ramp up its offshore oil and gas exploration activities in the Caspian Sea. New exploration activities were expected due to Iran’s relatively recent success in finding the Sardar-e Jangal oil field in 2012. Iran’s deputy petroleum minister stated that the country will conduct deep water drilling in the Caspian Sea as well as in the Sea of Oman in “the coming years.” It is uncertain how existing sanctions will hamper these efforts.
  • Russia plans to send approximately $200 million to Kyrgyzstan to ease its accession into the Customs Union, Russia’s deputy finance minister stated yesterday. According to agreements signed previously by representatives from the two countries, the funds will be dispersed in stages in order to “ease” the transition process.
  • Freelance journalist Umar Farooq was deported from Kyrgyzstan following detention by the country’s security service. Farooq is an American citizen who claimed to be in the country to investigate disputes between ethnic Uzbeks and Kyrgyz. The Kyrgyz government claims, however, that he was in possession of extremist propaganda and that his motives were different.
  • The Diplomat recently posted a piece documenting the extravagant lifestyles afforded the children of Central Asian strongmen. The story documents the extent to which corruption allowed Gulnara Karimova to garner more than $1bn in bribes from foreign telecommunications companies, as well as the exploits of Maxim Bakiyev, the son of former Kyrgyz President Kurmanbek Bakiyev.
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