FSUOGM: a bumper year for Gazprom

Gazprom is on track to produce record profits this year on the back of Europe's worst energy crunch in decades. But it is not all good news for Russia's state gas giant. Its flagship Nord Stream 2 project remains in limbo, with the certification  process in Germany set to drag on into the second half of this year.

Gazprom's management has stressed that such high prices are not good either for suppliers or consumers, as they risk causing long-term demand destruction, and there is some truth in this. The company has also faced harsh criticism – whether justified or not – for exacerbating the energy crisis by withholding gas supply. 

Tensions between Russia and Ukraine are also driving up prices, although as bne IntelliNews argues, the consensus among analysts is that the odds of invasion are close to zero. Rather, Putin is presenting a threat in order to get the US and its Nato allies to commit to no further encroachment on Russia's sphere of influence, namely in Ukraine and Georgia.

On the oil front, Russian producers can look forward to eased OPEC+ restrictions over the coming months, provided that the coronavirus (COVID-19) pandemic does not take a significant turn for the worse. By far the biggest investment story in Russia's oil sector this year is Rosneft's Vostok Oil project in the Russian Arctic. The big question is whether Sechin will obtain the necessary investment partners to take development forward.

If you’d like to read more about the key events shaping the former Soviet Union’s oil and gas sector then please click here for NewsBase’s FSU Monitor.