Gazprom facts for kids

Quick facts for kids
Gazprom PJSC

Native name	ПАО "Газпром"
Type	State-owned company Public (PAO)
Traded as	MCX: GAZP
Industry	Oil and gas
Founded	8 August 1989; 35 years ago (1989-08-08)
Headquarters	Lakhta Centre, Saint Petersburg , Russia
Key people	Viktor Zubkov (Chairman) Alexey Miller (CEO)
Products	Petroleum Natural gas Petrochemicals
Services	Gas pipeline transport
Revenue	$87.7 billion (2020)
Operating income	$8.53 billion (2020)
Net income	$2.25 billion (2020)
Total assets	$324 billion (2020)
Total equity	$205 billion (2020)
Owner	Russian government (50.23%)
Number of employees	466,000 (2018)
Subsidiaries	List of subsidiaries

PJSC Gazprom (Russian: Газпром, IPA: [ɡɐsˈprom]) is a huge energy company from Russia. The letters "PJSC" mean "Public Joint-Stock Company," which is a type of company whose shares can be bought and sold by the public. Gazprom's main office is in the Lakhta Center in Saint Petersburg. The name "Gazprom" comes from Russian words meaning "gas industry." In 2022, Gazprom became the largest company in Russia based on its market value.

Gazprom is involved in every part of the gas business. This includes finding gas, drilling for it, cleaning it, moving it through pipelines, selling it, and even making electricity. In 2018, Gazprom produced 12% of the world's natural gas. They also own and build many pipelines, like Nord Stream 1 and TurkStream, to send gas across Russia and to other countries. Gazprom also produces a lot of oil through its company Gazprom Neft. They also own parts of other businesses, like banks, media companies, and even an aviation company.

Gazprom started in 1989. It was formed when the Soviet Union's Ministry of Gas Industry became a company. After the Soviet Union broke apart, Gazprom became a private company. Later, in the early 2000s, the Russian government took back control. Since then, Gazprom has been important in Russia's international relations, especially when it comes to gas prices and pipeline access. The Russian government owns most of Gazprom, but some shares are available for people to buy.

What is Gazprom's History?

How Gazprom Began

During World War II in 1943, the Soviet Union started its own gas industry. By 1965, the government controlled all gas activities. In the 1970s and 1980s, large natural gas fields were found in Siberia and other Russian regions. This made the Soviet Union a major gas producer.

In August 1989, the Ministry of Gas Industry changed its name to State Gas Concern Gazprom. It was the first state-run company in the Soviet Union. When the Soviet Union ended in 1991, Gazprom kept its assets in Russia. It became the only company allowed to sell gas in Russia.

When Gazprom Became Private

In December 1992, Viktor Chernomyrdin, Gazprom's chairman, became the Prime Minister of Russia. This made Gazprom even more powerful. The company then became a joint-stock company, meaning its shares could be bought by the public.

Many Russian citizens bought shares using special vouchers. By 1994, 33% of Gazprom's shares were owned by the public. Gazprom employees also received 15% of the shares. The government kept 40% of the shares. For a while, foreigners could only own a small part of the company.

During this time, Gazprom did not pay many taxes, and the government received little money from it. Some people in charge of Gazprom, like Chernomyrdin, were accused of taking company assets for themselves or their families.

When the Government Took Control Again

Major Russian natural gas basins in 2000

In June 2000, Vladimir Putin became the President of Russia. He wanted the government to have more control over important companies. Putin removed Chernomyrdin from Gazprom's board. He replaced the old leaders with people he trusted, like Dmitry Medvedev and Alexei Miller. Their job was to stop people from taking assets from Gazprom and to get back what was lost.

In April 2001, Gazprom bought NTV, a TV station that was independent from the government. This happened after the station criticized Putin's government.

In June 2005, the Russian government bought more shares in Gazprom. This gave the government control of the company. They also allowed foreigners to invest more in Gazprom. In September 2005, Gazprom bought a large oil company called Sibneft for $13.01 billion. Sibneft was renamed Gazprom Neft. This made Gazprom the largest company in Russia.

Countries dependent on Russian natural gas (2006)

In July 2006, a new law gave Gazprom the only right to export natural gas from Russia. In December 2006, Gazprom made a deal to take control of Sakhalin Energy, a big energy project.

In June 2007, another company, TNK-BP, sold its share in a gas field in Siberia to Gazprom. This happened after the Russian government questioned BP's right to export gas.

Gazprom has also had disagreements with countries like Belarus and Ukraine about gas prices. Sometimes, Gazprom threatened to stop gas supplies if payments were not made. For example, in January 2009, gas supplies to Ukraine were stopped for a while during a dispute.

In December 2014, Russia decided to stop building the South Stream gas pipeline to Europe. Instead, they planned to send more gas to Turkey. This was because Bulgaria was having problems with the European Union over the pipeline contract.

Gazprom's Continued Growth

The ceremony marking the opening of a LNG production plant built as part of the Sakhalin-II project

In September 2012, the European Commission started an investigation into Gazprom. They were concerned that Gazprom might be using its strong position to unfairly control the gas market.

In May 2014, Gazprom signed a huge contract with China National Petroleum Corporation (CNPC) in Shanghai. This $400 billion deal means Gazprom will send 38 billion cubic meters of natural gas to China every year for 30 years, starting in 2018. Construction for the Power of Siberia pipeline began soon after.

In September 2015, agreements for the Nord Stream 2 pipeline were signed. This pipeline was completed in July 2021.

Recent Changes for Gazprom

After the 2022 Russian invasion of Ukraine in February 2022, Russia's gas supply to Europe changed a lot. Gazprom's exports to Europe fell sharply in 2022 and 2023. This meant less money for Gazprom. The company even had to increase gas prices for customers inside Russia. Gazprom also faces claims for not supplying gas as promised in long-term contracts.

How Does Gazprom Get and Deliver Gas?

Countries by natural gas proven reserves (2014). Russia has the world's largest reserves.

Gas Production

In 2011, Gazprom produced 513.17 billion cubic meters of natural gas. This was 17% of all gas produced worldwide and 83% of Russia's total gas production. Most of Gazprom's gas fields are in Western Siberia. The three largest fields are Medvezhe, Urengoy, and Yamburg. These fields have been producing gas for over 20 years, so their output is now decreasing. Gazprom keeps its production levels high by opening new, smaller fields and buying gas assets from other companies.

Gazprom Neft is the company that produces crude oil for Gazprom. In 2005, Gazprom bought 75% of Gazprom Neft's shares.

Gas Reserves

In 2015, Gazprom had 23.705 trillion cubic meters of natural gas reserves. This was about 18.4% of the world's total gas reserves. They also had large reserves of crude oil and gas condensate. Most of Gazprom's natural gas reserves are in the Urals Federal District and the Arctic shelf.

Developing New Gas Fields

Location of the Shtokman gas field

Gazprom invests a lot of money in new projects to keep up its gas supply. About 37% of Gazprom's gas reserves are in the Yamal Peninsula and the Barents Sea.

One important project is the Blue Stream Pipeline. This pipeline sends natural gas to Turkey under the Black Sea. It can transport 16 billion cubic meters of gas each year.

The Yamal Peninsula has huge gas reserves, over 10 trillion cubic meters. The Bovanenkovo field there can produce 115 billion cubic meters of gas per year.

Zapolyarnoye gas field

The Shtokman field is one of the biggest natural gas fields in the world. It is located in the Barents Sea. This field is estimated to hold up to 3.7 trillion cubic meters of gas. Gazprom is working with companies from France and Norway to develop this field.

Gazprom also explores for gas in other countries like India, Pakistan, Algeria, and Venezuela.

How Does Gazprom Transport Gas?

Natural gas pipelines from Russia to Europe in 2009

Gazprom has the largest gas transportation system in the world. It includes 158,200 kilometers of gas pipelines and 218 compressor stations. In 2008, this system carried 714.3 billion cubic meters of gas. Gazprom says its system is working at full capacity. Important transportation projects include the Nord Stream pipelines and pipelines within Russia.

Liquefied Natural Gas (LNG)

In 2021, Russia had two large plants that make liquefied natural gas (LNG). LNG is natural gas that has been cooled down to a liquid so it can be shipped more easily. Gazprom has a share in both of these plants.

The Russian government plans to build nine more LNG plants to meet the growing demand for LNG around the world. In August 2021, Russia's first LNG bunkering vessel, the Dmitry Mendeleev, was finished for Gazprom. This ship helps refuel other ships with LNG.

In October 2021, Gazprom announced plans to build a new LNG plant called Baltic LNG near the Baltic Sea. This plant will process gas and produce 13 million tons of LNG per year.

In 2024, Gazprom had trouble finding enough LNG tankers. This made them use a special floating storage unit to export LNG. This problem happened because their usual tankers were taking longer routes to Asia to avoid dangers in the Red Sea.

Who Buys Gazprom's Gas?

In 2006, Gazprom sold 316 billion cubic meters of gas to customers in Russia. They sold 162 billion cubic meters to the rest of Europe and 101 billion cubic meters to countries that used to be part of the Soviet Union. About 60% of Gazprom's money came from selling gas to European customers.

Gas prices have changed a lot since 2000. For example, in late 2007, German customers paid $250 per 1,000 cubic meters for Gazprom's gas, while Russian customers paid only $49.

Since the 2022 invasion of Ukraine, Gazprom's income from exports has dropped. Because of this, gas prices for customers in Russia will increase by 34% by July 2025.

Gas Exports

CEO of Gazprom Alexei Miller and Head of the China National Petroleum Company Zhou Jiping signed a $400 billion gas deal for natural gas supplies via the Eastern Route between Gazprom and CNPC, 21 May 2014 Vladimir Putin and Xi Jinping pictured in background.

Gazprom sends gas to 25 countries in Europe. Its main export company is Gazprom Export LLC. This company has the only right to export gas to countries outside the former Soviet Union. Most Russian gas in Europe is sold through long-term contracts, usually for 25 years.

In late 2004, Gazprom was the only gas supplier for countries like Bosnia and Herzegovina, Estonia, Finland, and Latvia. It supplied a large percentage of gas to many other European countries, including Bulgaria (97%), Hungary (89%), Poland (86%), and Germany (36%). By 2010, Russia was supplying 70% of Italy's gas. In May 2006, the European Union received about 25% of its gas from Gazprom.

In 2014, Europe provided 40% of Gazprom's income.

In September 2013, Gazprom and CNPC (China) agreed not to use the Henry Hub index to set gas prices. On May 21, 2014, Vladimir Putin and Xi Jinping signed a $400 billion deal between Gazprom and CNPC. Under this contract, Russia will supply 38 billion cubic meters of gas to China every year for 30 years.

In January 2023, due to international sanctions against Russia, Gazprom's gas exports fell by 45%. This was mainly because they lost the European market. In 2023, Europe bought only 28 billion cubic meters of gas from Gazprom, which is the lowest level since the 1970s.

Disputes Over Gas Prices

On January 1, 2006, Gazprom stopped supplying gas to Ukraine during a dispute. Gazprom wanted Ukraine to pay more for natural gas, similar to global prices. After a few days, Ukraine and Gazprom reached a temporary agreement.

In December 2006, Gazprom threatened to stop gas supplies to Belarus unless Belarus paid more or gave Gazprom control of its gas pipelines. Belarus and Gazprom signed an agreement just hours before the deadline. Belarus agreed to pay $100 per 1,000 cubic meters in 2007. The agreement also allowed Gazprom to buy 50% of Beltransgaz, Belarus's pipeline network.

On April 1, 2014, Gazprom increased the gas price for Ukraine from $268.50 to $385.50 per 1,000 cubic meters. Ukraine owed Russia $1.7 billion for gas bills. In October 2014, Russia agreed to restart gas supplies to Ukraine for the winter.

How Gazprom is Organized

Gazprom is a "vertically integrated" company. This means it owns all the different parts of its business, from finding gas to delivering it. Gazprom owns all its main gas processing plants in Russia. It also runs Russia's main gas pipelines and has had the legal right to be the only gas exporter since 2006. Other gas producers in Russia must use Gazprom's facilities to process and transport their gas.

19th conference of Gazprom's young scientists in Tyumen in 2016

Gazprom's former headquarters in Cheryomushki District, South-Western Administrative Okrug, Moscow

At the end of 2008, Gazprom had 221,300 employees. Most of them worked in gas production, transportation, storage, and processing. Gazprom's main office was in Moscow until 2021, when it moved to the Lakhta Centre in Saint Petersburg.

Gazprom is considered a "national champion" in Russia. This means that big companies in important areas are expected to not only make money but also help Russia's national interests. For example, Gazprom sells gas to its own country at a lower price than it sells to other countries. In 2008, Gazprom's activities made up 10% of Russia's total economic output.

Gazprom's large projects, like international pipelines, have also been a big source of income for many Russian suppliers and contractors.

Who Owns Gazprom?

As of 2017, the main owners of Gazprom were the Federal Agency for State Property Management (38.37%) and Rosneftegaz (10.97%). Together with another small share, these ensure that the Russian government controls most of the company. The rest of the shares are owned by investors, including those who trade on foreign stock markets.

Gazprom is listed on the stock markets in Moscow and Karachi. It used to be listed on other stock exchanges like London and Frankfurt, but this changed after the 2022 sanctions.

Other Companies Gazprom Owns

Gazprom owns hundreds of other companies in Russia and other countries. These are called subsidiaries. For example, it has companies in the United Kingdom and the Netherlands.

Gazprom's Leaders

Gazprom CEO Alexei Miller with the Energy Minister of Ukraine Yuriy Boyko, June 2012

Gazprom has a Board of Directors and a Management Committee that make important decisions. Some key people include:

• Viktor Zubkov (Chairman of the Board, a special representative for gas exporting countries)
• Alexey Miller (CEO and Chairman of the Management Committee)

Gazprom and Sports

Gazprom is a big sponsor of sports. It owns and sponsors the Russian Premier League football (soccer) club FC Zenit Saint Petersburg. It also sponsors their basketball and volleyball teams. Gazprom also owns the ice hockey club SKA St Petersburg.

On January 1, 2007, Gazprom became a sponsor of the German football club FC Schalke 04. This sponsorship was worth a lot of money each year. However, Schalke stopped their sponsorship with Gazprom after the 2022 Russian invasion of Ukraine.

Gazprom also became a sponsor of the Serbian football club Red Star Belgrade in 2010. In 2010, Gazprom was a "Gold Partner" for the Russian professional cycling team, Team Katusha.

On July 17, 2012, Gazprom became a partner of the UEFA Champions League winners Chelsea. This sponsorship lasted for three years.

In September 2013, Gazprom became an official partner of FIFA tournaments from 2015 to 2018, including the 2018 FIFA World Cup in Russia.

Gazprom also sponsored the Minardi F1 racing team in 2002–2003.

In April 2021, Gazprom became a sponsor of the International Amateur Boxing Association (AIBA). This partnership ended in 2023.

Gazprom was also a sponsor of the UEFA Champions League and UEFA Super Cup from 2012. This partnership was extended until 2024. However, due to the 2022 Russian invasion of Ukraine, Gazprom's sponsorship for the Champions League and Euro 2024 was ended.

Environmental Concerns

According to a geographer named Richard Heede, Gazprom was the second-highest company in the world for CO₂ emissions in 2013. Its emissions were about 3.4% of all human-caused emissions worldwide.

In June 2021, a large amount of methane gas leaked over Russia from a Gazprom pipeline during repairs. Methane is a very powerful gas for warming the planet, much more so than carbon dioxide.

What are Some Challenges Gazprom Has Faced?

Using Gas for Political Influence

Gazprom has often been accused of being used by Russia as a political and economic tool. People say Russia uses gas supplies and prices to gain influence over countries in Europe, especially Ukraine. For example, Donald Tusk, a former prime minister of Poland, said in 2014 that relying too much on Russian energy makes Europe weak. Russia denies using energy as a weapon. In December 2019, Gazprom paid $2.9 billion to Ukraine's Naftogaz after a court ruling about past disputes.

After the 2022 invasion of Ukraine, Gazprom had problems with many European Union countries. Gazprom said it would cut off supplies to a French energy company for not paying in full. France's Energy Minister said that Russia was clearly using gas as a weapon.

Nord Stream Pipelines

The Nord Stream pipelines are gas pipelines that run under the Baltic Sea from Russia to Germany. Gazprom owns and operates them. The United States and Ukraine, along with other European countries, have strongly opposed these pipelines. They worried that the pipelines would give Russia more influence in Europe and reduce fees for using older pipelines.

In February 2022, German Chancellor Olaf Scholz stopped the certification of Nord Stream 2. This happened after Russia recognized two regions in Ukraine as independent. In March 2022, Nord Stream 2 AG, a Gazprom company, stopped its business operations due to international sanctions.

On September 26, 2022, there was a sudden drop in pressure in both Nord Stream pipelines. This was caused by damage to the pipes due to sabotage.

Protests Against Arctic Drilling

Gazprom's oil drilling in the Arctic has led to protests from environmental groups, especially Greenpeace. Greenpeace believes that oil drilling harms the Arctic environment and that there are no good plans to prevent oil spills.

In September 2013, the Greenpeace ship MV Arctic Sunrise protested at Gazprom's Prirazlomnaya oil platform. Greenpeace said the drilling could cause major damage to the Arctic ecosystem. The Russian Coast Guard took control of the Greenpeace ship and arrested 30 activists. The Russian government planned to charge them with serious crimes, but these charges were later dropped.

International Sanctions

Following Russia's actions towards Ukraine, the United States and the European Union placed restrictions on Gazprom and its related companies starting in 2014. These restrictions limit how Gazprom can get money and do business.

In April 2018, the United States placed sanctions on Gazprom's CEO, Alexey Miller. This means U.S. citizens and companies cannot do business with him. Miller said he was proud of the sanction, seeing it as a sign they were doing things right.

In December 2019, the U.S. also placed sanctions on companies involved in the Nord Stream 2 project.

On February 24, 2022, after the 2022 Russian invasion of Ukraine, the U.S. increased penalties on Nord Stream 2 AG and Gazprom. The European Union also banned investments in the Russian energy sector, including Gazprom Neft. The UK also placed financial restrictions on Gazprom.

How Sanctions Affected Gazprom

Because of these economic sanctions, Gazprom stopped paying dividends (money paid to shareholders) for the first time since 1998.

In the first half of 2022, Gazprom made a lot of money due to high gas prices. However, in the second half of 2022 and into 2023, Gazprom likely did not make a profit because exports fell so much. Overall, Gazprom's profit in 2022 was lower than in 2021 due to an extra tax.

In December 2022, European energy ministers agreed to put a price cap on natural gas. This was to stop Russia from forcing gas prices up in Europe.

Gazprom's gas exports from Russia fell significantly: from 185 billion cubic meters in 2021 to 100 billion in 2022, and then to 62 billion in 2023.

Private Army

In February 2023, the Russian Prime Minister signed an order allowing Gazprom Neft to form its own private army.

Stopping Gas Supplies to Companies

After the February 2022 invasion of Ukraine and the sanctions, some Western gas companies continued to pay Gazprom in Euros and Dollars. These funds became blocked by sanctions. On March 31, President Vladimir Putin signed a new rule requiring payments to be made in a different way. Many Western companies refused to pay in the new way, so Gazprom stopped supplying gas to them.

Several Western companies have started legal cases against Gazprom. They are asking for money because Gazprom either supplied less gas than promised or stopped supplies completely. For example, Germany's Uniper is claiming €11.6 billion from Gazprom.

See also

In Spanish: Gazprom para niños