PJSC Gazprom () is a Russian state-owned multinational energy corporation headquartered in the Lakhta Center in Saint Petersburg. The name is a contraction of the Russian words (, gas industry). In December 2024, Gazprom ranked fifth in the list of the largest companies in Russia by market capitalization. In 2023, the company's revenue amounted to 8.5 trillion rubles, a significant decline from the 11.7 trillion rubles it reported in 2022.
Vertically integrated, Gazprom is active in the hydrocarbons sector, with activities including exploration and production, refining, transport, distribution and marketing, and power generation. In 2018, Gazprom produced twelve percent of the global output of natural gas: 497.6 billion cubic meters of natural and associated gas and 15.9 million tonnes of gas condensate. Gazprom distributes gas through pipelines that the company builds and owns across Russia and abroad, such as Power of Siberia and TurkStream. In 2023 it produced 359 billion cubic meters of natural and associated gas, a decline of approximately 13 percent from the previous year.In the same year, Gazprom had proven reserves of 35.1 trillion cubic meters of gas and 1.6 billion tons of gas condensate. Gazprom is also a large oil-producer through its subsidiary Gazprom Neft, producing about 41 million tons (730 million barrels) of oil with reserves amounting to 2 billion tons (35 billion barrels). The company also has subsidiaries in other industrial sectors, including finance, media and aviation; and majority stakes in other companies.
Gazprom formed in 1989, when the government converted the Soviet Ministry of Gas Industry into a corporation to become the first state-run corporate enterprise in the Soviet Union. After the Soviet Union's dissolution in 1991, Gazprom was privatized, retaining its Russia-based assets. At that time, Gazprom evaded taxes and state regulations and engaged in asset stripping. The company returned to government control in the early 2000s, and since then, the company has been involved in the Russian government's diplomatic efforts, setting of gas prices, and access to pipelines.
The company is majority-owned by the Russian government, via the Federal Agency for State Property Management and Rosneftegaz, while the remaining shares are traded publicly. Gazprom is listed on the Moscow Exchange. Many arbitration cases have been decided against Gazprom.
In 2024, Gazprom was responsible for 1,065 Mt of CO2 emissions, which was 2.76% of global CO2 emissions.
History Origins In 1943, during World War II, the government of the Soviet Union developed a domestic gas industry. In 1965, it centralized gas exploration, development, and distribution within the Ministry of Gas Industry. In the 1970s and 1980s, the Ministry of Gas Industry found large natural gas reserves in Siberia, the Ural region, and the Volga Region. The Soviet Union became a significant producer of gas. In August 1989, under the leadership of the minister of Gas Industry of the Soviet Union (1985-1989) Viktor Chernomyrdin, the Ministry of Gas Industry was renamed the State Gas Concern Gazprom, and became the Soviet Union's first state-run corporate enterprise.Goldman, p.2 In late 1991, when the Soviet Union dissolved, gas industry assets were transferred to newly established national companies, such as Naftogaz and Turkmengaz. Gazprom kept assets located in Russia and secured a monopoly in the gas sector.Goldman, p.7-9
Privatization In December 1992, when Boris Yeltsin, the Russian president, appointed Viktor Chernomyrdin, Gazprom's chairman, his prime minister, the company's political influence increased. Rem Viakhirev took the chairmanship of Gazprom's Board of Directors and Managing Committee.Goldman, p.60 Following the Decree of the President of the Russian Federation of 5 November 1992, and the Resolution of the Government of Russia of 17 February 1993, Gazprom became a joint-stock company. Gazprom began to distribute shares under the voucher method. (Each Russian citizen received vouchers to purchase shares of formerly state-owned companies). By 1994, 33% of Gazprom's shares had been bought by 747,000 members of the public, mostly in exchange for vouchers. Fifteen percent of the stock was allocated to Gazprom employees. The state retained 40% of the shares. That amount was gradually lowered to thirty-eight percent. Trading of Gazprom's shares was heavily regulated. Foreigners were prohibited from owning more than nine percent of the shares. In October 1996, 1% of Gazprom's equity was offered for sale to foreigners as Global Depository Receipts. In 1997, Gazprom offered a bond issue of US$2.5 billion.
Chernomyrdin, as Prime Minister of Russia, ensured Gazprom avoided tight state regulation. Gazprom evaded taxes, and the Government of Russia received little in dividends. Gazprom managers and board members, such as Chernomyrdin and the Gazprom Chief Executive Officer, Rem Viakhirev, engaged in asset-stripping. Gazprom assets were shared amongst their relatives. Itera, a gas trading company, also received Gazprom assets.Goldman, p.61 In March 1998, for reasons unrelated to his activities at Gazprom, Chernomyrdin was fired by Yeltsin.Goldman, p.101 On 30 June 1998, Chernomyrdin was made chairman of the board of directors of Gazprom.
State control
In June 2000, when acting-president Vladimir Putin became the president of Russia, he acted to gain control over Russia's oligarchs, and to increase the Government of Russia's control in important companies through a program of national champions. Putin fired Chernomyrdin from his position as the chairman of the Gazprom board. The Russian Government's stock in Gazprom gave Putin the power to vote out Viakhirev. Dmitry Medvedev and Alexei Miller former Putin employees in Saint Petersburg took over from Chernomyrdin and Viakhirev.Goldman, pp.104–105 Putin's actions were aided by the shareholder activism of Hermitage Capital Management Chief Executive Officer William Browder, and by the former Russian finance minister Boris Fyodorov. Miller and Medvedev were tasked with halting asset-stripping at Gazprom and with recovering the associated losses. Itera was denied access to Gazprom's pipelines and came close to bankruptcy. In 2006, Itera agreed to return stolen assets to Gazprom for a fee.Goldman, pp.141–142 Browder was deported from Russia in 2005, and the Russian arm of Hermitage Capital Management was seized two years later.
In April 2001, Gazprom acquired NTV, Russia's only nationwide state-independent television station, from Vladimir Gusinsky's company, Media-Most Holdings. Gusinsky fell out of Putin's favor after using NTV to publish criticism from the families of sailors who died during the Kursk submarine disaster of August 2000 and additional criticism of Putin's handling of the Second Chechen War of 1999 to 2009. Gusinsky fled Russia in 2000, allowing Gazprom to take over NTV without his opposition.Goldman, pp.102-103
In June 2005, Gazprombank, Gazpromivest Holding, Gazfond and Gazprom Finance B. V., subsidiaries of Gazprom, sold a 10.7399% share of their stock for $7 billion to , a state-owned company. Some analysts said the amount paid by Rosneftegaz for the stock was too low."Kremlin agrees price for Gazprom." BBC News 16 June 2005. The sale was completed by 25 December 2005, and with the purchased stock and the thirty-eight percent share held by the State Property Committee, the Government of Russia gained control of Gazprom. The Government of Russia revoked the Gazprom twenty-percent foreign-ownership rule; the company became open to foreign investment. In September 2005, Gazprom bought 72.633 percent of the oil company Sibneft for $13.01 billion. Sibneft was renamed (Gazprom Oil). The purchase was aided by a $12 billion loan. Gazprom became Russia's largest company.Yenikeyeff, Shamil, "BP, Russian billionaires, and the Kremlin: a Power Triangle that never was" , Oxford Energy Comment, 23 November 2011. Retrieved 24 November 2011. On the day of the deal the company worth was valued at £69.7 billion (US$123.2 billion).
In July 2006 Russia's State Duma passed the law On Gas Export with a nearly unanimous vote. This law gave Gazprom the exclusive right to export natural gas from Russia.Neil Buckley and Tobias Buck, "Duma votes for Russian gas export monopoly" , The Financial Times, 16 June 2006."Duma approves Gazprom export bill", BBC News, 5 July 2006. In December 2006, Gazprom signed an agreement with Royal Dutch Shell, Mitsui and Mitsubishi, to take over fifty percent plus one share of Sakhalin Energy. The Gazprom corporate slogan of 2006: "Dreams Come True" () achieved wide resonance.
In June 2007, TNK-BP, a subsidiary of BP plc, agreed to sell its stake in the Kovykta field in Siberia to Gazprom after the Government of Russia questioned BP's right to export gas from Russia."BP Set to Leave Russia Gas Project", by Guy Chazan and Gregory L. White, The Wall Street Journal, 23 June 2007 p. A3
On 1 August 2007, Gazprom's Sergey Kuprianov threatened to stop supplying Belarus with Gazprom gas if Minsk failed to pay off its debts, and if so, it would experience a 300% price-increase. Two days later, Kuprianov saw significant progress towards payment, and expected to be paid by the following week.
On 23 June 2007, the governments of Russia and Italy signed a memorandum of understanding towards a joint venture between Gazprom and Eni SpA to construct a 558-mile (900 km) gas pipeline to carry gas per year from Russia to Europe. This South Stream pipeline would extend under the Black Sea to Bulgaria with a south fork to Italy and a north fork to Hungary."Gazprom Pipeline Plan May Fuel Worry" by Gabriel Kahn, The Wall Street Journal, 25 June 2007, p. A11"Gazprom, Eni plan big gas pipeline bypassing Turkey." Reuters 23 June 2007. Accessed 26 June 2007."Eni and Gazprom sign the agreement for the South Stream Project." Eni.it, 23 June 2007. Accessed 26 June 2007.
On 18 December 2007, Frank-Walter Steinmeier (then Foreign Minister of Germany) and Dmitry Medvedev (then First Deputy Prime Minister of Russia) signed an agreement on behalf of BASF to exploit another gas field. At the time, German demand was 40% covered by Russian supply. Some German academics warned that Germany had become too dependent on Russia, but Steinmeier, citing the new Ostpolitik, disregarded them.
On 11 February 2008, Kuprianov threatened Ukraine with a halt to supply; in January 2009, the threat was carried out, marking the beginning of the 2009 Russia–Ukraine gas dispute. BASF's expressed concern about the reliability of his firm's supply, but Miller assuaged his worries in a phone call, and the Europeans did nothing to change course for more than a decade.
On 1 December 2014, during a visit to Turkey, Putin said the South Stream project would not proceed and that Russia would ship 63 billion cubic metres per year (bcm/y) of gas to Turkey instead of to Bulgaria. Bulgaria was being sued by the European Union for signing a contract with Russia which was not aligned with European Union regulations. The president of Bulgaria, Rosen Plevneliev, pressured the European Union and Russia to resolve the matter quickly.
Continual rise
On 4 September 2012, the European Commission announced an anti-trust investigation into Gazprom's activities. This was based on "concerns that Gazprom may be abusing its dominant market position in upstream gas supply markets." In late November 2013, Gazprom expanded its media interests by acquiring Profmedia from Vladimir Potanin.