Natural gas production in Russia has been one of the most profitable areas for quite some time. Throughout the country is full of deposits of this resource. Gas is produced by the transnational corporation Gazprom. There are several more small companies, but they are affiliated with Gazprom and do not conduct separate activities from neg.
About concern
Gazprom is the largest organization in the world in gas production, its processing and sale in all sectors of the population. In addition to activities related to gas production activities, the company is engaged in the following:
- oil production;
- sale of fuel among the population;
- export of resources to other countries.
In addition, Gazprom is the owner of the largest natural gas reserves: the share of the entire world is 16.9%, in the Russian Federation - 60%.
The main gas pipelines carried out in Russia also belong to this company. Yes, and the provision of gas to other countries is also carried out through the transfer of resources through the pipes of Gazprom.
According to the data published on the organizationās website, we can say that all the company strives for is to provide gas to its consumers in a timely and sufficient manner, and in addition, to comply with intergovernmental agreements and not to doubt its reliability.
But the ultimate goal of Gazprom is to enter the world arena as a global company.
Are the shares of the concern popular?
As you know, the gas giant is very popular among the population. Gazprom shares are the most attractive investment option. Among the shareholders - and the state, while it takes first place.
The state-owned company Rosneftegaz also bought out part of Gazpromās shares. Thanks to this action, the state became the owner of a controlling stake, which is 50.002%.
Judging by the demand for shares, it will not surprise us that Gazprom ranks in the top ten in the ratings of the largest corporations on the planet. On the other hand, according to Bloomberg journalist Anders Asland, āNot a single large company in the world is managed as mediocre as the Russian Gazprom.ā
What forecasts were up to 2015?
Given the development of gas production since the start of Gazprom, the shareholders were sure that this company would always be in value. For example, during 2005, stock prices rose at a tremendous rate. The capitalization of Gazprom over the years has changed only in a positive way. 2006 was also a significant year, because it was in this year that the corporation entered the top ten in the rating of the largest companies in the world.
Gazprom's market capitalization in 2007 amounted to about $ 300 billion. No one doubted the monumental gas giant. The top manager was going to implement his plans, which included an even greater capitalization of the company (Gazprom).
2008 was the most successful year for the corporation. Then there was a maximum capitalization of Gazprom, which amounted to 365.1 billion dollars.
The corporation was hit hard in 2014. Unrest in Ukraine led to a decrease in the use of Russian gas among Ukrainian citizens. Countries have actually broken the fuel supply agreement.
From these events it was possible to judge the beginning of the fall of the gas giant, because Ukraine bought about 10% of the resource supplied by Russia.
What happened to Gazprom in 2015?
This year was unsuccessful for the corporation. Within a few months, capitalization fell; Gazprom was worth a little over $ 40 billion in value. Competitors in value, that is, Sberbank and Rosneft, were growing in price, and the gas giant was tilting more and more.
Nevertheless, at the time of 2015, the corporation was the leader in the rating based on information from the Moscow Exchange.
If we analyze what Gazpromās capitalization was from 2014 to 2015, the dynamics over the years will show a drop of as much as 20%. Such figures for one year can signal a very unstable position of the company.
Accordingly, the gas production itself has also decreased. Production levels fell to 414 billion cubic meters. These indicators are the lowest, and the power of Gazprom equipment is designed for large scale.
Competition: Gazprom - Rosneft
As you know, competitors are even politically trying to influence the progress of the concern. Rosneft vice president advocated the abolition of Gazpromās export monopoly. There were also demands from rivals to split the gas giant into small companies.
In addition, judging by how much competitive capitalization is now, Gazprom may be squeezed out of the top positions in the global market.
In April 2016, trading on the London Stock Exchange for the first time brought Rosneft to a higher level. Capitalization also increased, while Gazprom lagged behind by $ 18 million.
Gazprom shares versus Sberbank shares
Not only Rosneft has affected the fall of the corporation. Sberbank ordinary shares at the end of August 2016 suddenly exceeded the capitalization of Gazprom shares.
The two largest Russian corporations clashed at the Moscow Exchange. Sberbankās capitalization suddenly exceeded the value of Gazprom by more than 100 billion rubles. And this is far from the limit, especially considering the current depreciation of Gazprom shares.
How did the year 2016 differ for the gas corporation?
As mentioned above, exchange trading competitors began to put a little pressure on the concern, which was knocked down by the events of 2014. Over seven years (from 2008 to 2015), capitalization fell by almost a factor of ten; Gazprom was losing its position on world exchanges.
Oddly enough, despite a desperate struggle with rivals, the corporation was able to raise its value at auction to almost $ 100 billion. Of course, when comparing the maximum and today's results, this is still not enough.
One may wonder for a long time the negative attitude of potential shareholders towards Gazprom. One thing is clear: the forecasts for the development of the corporation for 2017 are rather disappointing.
What threatens the bankruptcy of Gazprom?
To begin with, we must not forget that the corporation is currently engaged in the construction of a gas pipe with a length of two and a half thousand kilometers. The cost of such construction is about thirty billion euros. In addition, the construction of new gas pipelines leads Russia only to enormous costs and reduced fuel production.
Gazprom also relies on an increase in export prices for gas transit. According to experts, this step is ill-conceived and may lead to the ruin of the company. The buyer is always looking for cheaper, expensive goods of the same quality does not cause a desire to purchase it.
If the gas giant really goes bankrupt, more than four hundred thousand people risk being left without jobs. Gas prices for households and businesses in general will skyrocket to unbelievable. Despite the fact that Russia is the country most endowed with gas deposits, it can still be left without this fuel.
Strange can be considered the reaction of President Vladimir Vladimirovich Putin to the remark about the fall of the corporation. He believes that there is absolutely nothing dangerous in this fact, emphasizing the lack of an alternative to natural gas.
The problem also exists in the negative impact of Gazpromās difficulties on the state budget. After all, more than ten percent of the country's financial condition provided corporate income. And the entire oil and gas arsenal is generally forty percent. With the possible bankruptcy of Gazprom, there is a huge risk to the stability of the stateās economy as a whole. To prepare for possible problems, it is necessary now to revise the country's economic course.
Even if we take into account what was the capitalization of Gazprom over the years, and sensibly assess the situation based on facts, it is impossible to predict the exact development of the situation.