Gazprom profits plunge nearly 50 per cent

MOSCOW – Russian energy giant Gazprom, the world’s biggest gas firm, said yesterday that net profit plunged 49,8 per cent in the first half of 2009 compared to the figure 12 months earlier owing to higher expenses.

Gazprom announced in Cape Town last week that they will start building Namibia’s first gas-fired power station at Walvis Bay in January.According to a company statement yesterday, half-year profits fell to US$10,6 billion, compared to US$21 billion in the first six months of 2008.Operating expenses and financial charges rose sharply as the cost of purchased gas soared 105 per cent, reflecting an increase in prices for gas from Central Asia.’The increase in the cost of purchased gas was mainly caused by the increase in prices for gas from Central Asia and increase in gas trading activities on the European market,’ it said.The company, which ships 65 per cent of its exports to Europe, was also hard hit by a drop in European demand amid the economic downturn as states turned to stocks held in reservoirs in the former Soviet Union.But Gazprom head Alexei Miller last month said European demand for gas had grown in recent months to exceed pre-crisis levels.The company, which has its roots in the Soviet Union’s Gas Industry Ministry, now has 17 per cent of the global gas market and 60 per cent of the Russian market. The state retains a controlling stake of 50 per cent.It said that net sales in the first half fell by 6,6 per cent to US$56,6 billion.Sales of gas to Europe and other states had increased by six per cent as higher prices across the world compensated for drastic falls in export volumes, it added.Gazprom said its debt for the six months to July had increased 31 per cent to US$48 billion from US$34,5 billion at the end of last year. – Nampa-AFP