The drop in Gazprom PJSC’s natural gas production showed signs of bottoming out in July, with industry data indicating the smallest annual decline so far this year.
(Bloomberg) — The drop in Gazprom PJSC’s natural gas production showed signs of bottoming out in July, with industry data indicating the smallest annual decline so far this year.
Gazprom, which has a monopoly on Russian pipeline exports, stopped releasing regular operational figures this year. However, its production is included in industry data for much smaller, independent producers, where Gazprom dominates production totals.
The combined output of this group in July was 24.3 billion cubic meters, down 8% from a year earlier. That compares to an annual decline of just under 27% in May and nearly 17% in June, according to Bloomberg calculations. These companies accounted for 57% of nation’s total output last month, according to data seen by Bloomberg.
Russia started to significantly reduce gas output last year following the widening rift between Kremlin and the west over the invasion of Ukraine. In May and June of 2022, Gazprom halted pipeline flows to those European nations that refused to pay for the fuel in rubles and started to curb its exports to the region as a whole over its support of Ukraine and sanctions on the Russian economy.
Even as the pace of decline slows, Gazprom so far hasn’t revealed any strategies to revive its gas production significantly, following the loss of what used to be its biggest market, Europe. Growing pipeline exports to China so far have only partly offset the cut in westbound flows, Gazprom’s Deputy Chief Executive Officer Famil Sadygov said earlier this week in a statement.
Russia’s total gas output reached 42.8 billion cubic meters in July, down 3.6% from a year ago, according to the data, also the slowest pace of year-on-year declines for 2023. Novatek PJSC, the nation’s second-biggest gas producer which mainly supplies liquefied natural gas, pumped 6.5 billion cubic meters in July, almost flat on an annual basis, the industry data show.
Russia’s third-largest gas producer Rosneft PJSC, which doesn’t export any of the fuel and supplies only the domestic market, raised its output by 23% to 5.1 billion cubic meters last month. The increase follows the ramp-up of the Kharampur and Rospan projects, but is still a relatively small share of total domestic consumption.
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