Gas giant hands Kremlin $14 billion dividend after record profits
Russian energy giant Gazprom will pay a dividend worth $14.5 billion to the Kremlin following record profits brought on by a spike in gas prices triggered by the Ukraine war.
Shares in the state-owned company jumped by 20 per cent on Wednesday (Thursday AEST) after Gazprom reported profits worth 2.5 trillion roubles ($61 billion) during the first half of 2022 compared with a year earlier, the Telegraph reports.
The company board has recommended paying the dividend to the Russian government, which owns 49.3 per cent of the company's shares.
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Russia is a major gas exporter and has cut supplies to Europe in retaliation for economic sanctions. AP
Sanctions have impacted Gazprom's exports to Europe but a surge in wholesale gas prices has helped the company achieve record revenues and profits.
The company will now hold a shareholder meeting in late September to approve the interim dividend.
On Wednesday Gazprom halted the flow of natural gas through a major pipeline from Russia to Europe, a stoppage that it announced in advance and has said will last three days.
The company announced the closure of Nord Stream 1 in mid-August, citing maintenance at a compressor station — an explanation that German officials have cast doubt on.
Gazprom says that work is necessary on the only remaining functioning turbine at the Portovaya station, at the Russian end of the pipeline.
Gazprom started cutting supplies through Nord Stream 1 in mid-June.
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Russian President Vladimir Putin has been accused of using the Nord Stream 1 gas pipeline to Europe as an economic weapon. AP
It cited technical problems that German authorities have dismissed as cover for a political power play. In recent weeks, Nord Stream 1 has been running at only 20 per cent of capacity.
Ukrainian President Volodymyr Zelenskyy earlier this year accused Russian President Vladimir Putin of using the critical gas pipeline as a weapon, against of a broader energy war which has seen global prices spike up.
Russia, which before the reductions started accounted for a bit more than a third of Germany's gas supplies, has also reduced the flow of gas to other European countries which have sided with Ukraine in the war.
Natural gas is used to power industry, heat homes and offices, and generate electricity. Increasing the amount in reserve has been a key focus of the German government since Russia invaded Ukraine, to avoid rationing for industry as demand rises in the northern hemisphere winter.
- Reported with Associated Press
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