Specifically, according to the earnings report released on August 29, Gazprom's net profit reached 1,040 billion rubles (11.5 billion USD) in the first half of this year, compared to 296.2 billion rubles (3.3 billion USD) in the same period last year.

The increase was attributed to higher pipeline gas exports, higher oil sales, and Gazprom's acquisition of Shell Plc's previous stake in the Sakhalin-2 project.

“Efficient oil operations, higher gas exports, including plans to increase supplies to China, and our active steps to reduce costs” all contributed to the positive financial results, Gazprom Deputy CEO Famil Sadygov said in a statement.

The results were also affected by the merger of Sakhalin Energy, the operator of the Sakhalin-2 oil and gas project, Sadygov said.

Gazprom, one of the world's largest energy producers and exporters, has seen its core natural gas business in Europe decline from 2022, after relations between the Kremlin and the West deteriorated following Russia's military campaign in Ukraine.

The Russian giant posted its first annual net loss this century in 2023. The sharp recovery in Gazprom's net profit this year is a positive sign for shareholders, the largest of which is the Russian government. Any potential dividend would benefit the country's budget, which is strained by rising military spending and Western sanctions.

In the first half of this year, Russian natural gas exports to Europe, once Gazprom’s biggest market, recovered by more than a quarter compared with the first half of 2023, and gas deliveries to China rose above contract levels with China National Petroleum Corporation (CNPC), according to Bloomberg calculations and statements from the producer.

Gazprom expects pipeline gas supplies to the Asian country to reach the planned annual level of 38 billion cubic meters by 2025.

Gazprom’s financial results so far this year have also benefited from its larger stake in the Sakhalin-2 oil and gas joint venture in Russia’s Far East. The company increased its stake in the project to nearly 78% after buying out the 27.5% previously held by Shell, which withdrew from the project after the Russia-Ukraine conflict erupted.

Gazprom booked a provisional profit of about 167.4 billion rubles ($1.85 billion) in the first half of this year from increasing its stake in Sakhalin-2, according to its financial report. The company’s oil business, which is mainly run by Gazprom Neft PJSC, has been boosted by rising prices for Urals crude, Russia’s main export crude blend.

Minh Duc (According to Bloomberg)