Geopolitical leverage Repeatedly, Gazprom has been accused of being a political and economical weapon of
Russia, using the supply and price of natural gas to gain control over
Europe and most noteworthy,
Ukraine. "Regardless of how the stand-off over Ukraine develops, one lesson is clear: excessive dependence on Russian energy makes Europe weak," said
Donald Tusk, former prime minister of Poland in April 2014. The friction resulted in two boycott campaigns in Ukraine, one that started in
2005, the other in
2013. Russia denies weaponizing energy via Gazprom. In December 2019, Gazprom paid $2.9 billion to Ukrainian counterpart
Naftogaz as ordered by a Stockholm court ruling's award on damage claims stemming from alleged economic harassment. In the wake of the
2022 Russian invasion of Ukraine, Gazprom had issues with many EU countries, and stated it would cut off supplies to French energy supplier,
Engie, over failure to pay in full for deliveries. This was disputed, with France's Energy Transition Minister Agnes Pannier-Runacher stating, "Very clearly Russia is using gas as a weapon of war and we must prepare for the worst case scenario of a complete interruption of supplies."
Yukos Oil fraud Yuganskneftegaz was the core production subsidiary of the
Yukos Oil Company, which was previously run by a Russian businessman,
Mikhail Khodorkovsky. In 2003, the Russian tax authorities charged Yukos and its founder, Khodorkovsky, with tax evasion. On 14 April 2004, Yukos was presented with a bill for over US$35 bn in back taxes and a demand to pay the entire bill the same day. Requests by Yukos to defer payment, allow payment by installments, or to discharge the debt by sale of peripheral assets, including its shareholding in the
Sibneft oil company, were also refused. The bailiffs froze Yukos' shares in Yuganskneftegaz and on 19 November 2004, they placed a notice in the Russian government newspaper
Rossiyskaya Gazeta. Yuganskneftegaz would be sold at an auction thirty days later on 19 December 2004. The conditions for participation in the auction included an advance deposit of US$1.7 bn and prior clearance by the Russian
Federal Antimonopoly Service. In early December 2004, Gazprom applied to participate in the auction via its wholly owned subsidiary,
Gazpromneft. On 15 December 2004, Yukos filed for bankruptcy protection in a
Houston court and obtained a temporary injunction prohibiting Gazprom from participating in the auction. On 16 December 2004, a group of Western banks withdrew their financial support for Gazprom's application. On the same day, Baikalfinansgrup, a previously unknown company, submitted an application to participate in the auction. On 19 December 2004, only two companies appeared at the auction,
Gazpromneft and Baikalfinansgrup.
Gazpromneft declined to place any offer. Baikalfinansgrup acquired Yuganskneftegaz on its first bid. On 23 December 2004, Baikalfinansgrup was acquired by Rosneft. Rosneft later disclosed in its annual financial statement that it had financed the acquisition of Yuganskneftegaz. At the time,
Sergey Bogdanchikov was the president of Rosneft and the chief executive officer of
Gazpromneft. Shortly after the auction, the planned merger between Gazprom and Rosneft was abandoned, and Bogdanchikov resigned as Chief Executive Officer of Gazpromneft. On 7 February 2006, in response to a question by a Spanish journalist,
Vladimir Putin disclosed that Rosneft had used Baikalfinansgrup as a vehicle to acquire
Yuganskneftegaz to protect itself against litigation.
Antitrust On 22 April 2015, Gazprom was charged by the
European Commission with using territorial restrictions to engage in anticompetitive behavior and using its dominant position to impose unfair prices. The company was accused of preventing competition in
Bulgaria, the
Czech Republic,
Estonia,
Hungary,
Latvia,
Lithuania,
Poland and
Slovakia. The territorial restrictions prevented the import of gas at potentially more competitive prices. The restrictions also prevented gas from reaching areas of high demand and avoiding areas of excessive supply. Gazprom was also accused of compelling entities to consent to the now-defunct
South Stream pipeline by necessitating a consent clause in long-term contracts. Customers would be given an explicit contractual right to trigger a price review when prices paid diverged from competitive price benchmarks, and be allowed more frequent and efficient price reviews. Gazprom agreed not to seek any damages from its
Bulgarian partners following the termination of the South Stream project. Had the case gone to court, the company could have been forced to pay fines of up to $12 billion.
Methane leaks In June 2021, a massive
methane plume over Russia resulted from the partial shutdown of a Gazprom PJSC pipeline for emergency repair. The company stated that the repairs, which took place on 4 June, released 2.7 million cubic meters (1,830 metric tons) of methane. That amount has roughly the same short-term planet-warming impact as 40,000 internal-combustion cars in the U.S. driving for a year, according to the Environmental Defense Fund. The climate-warming effect of methane is estimated to be 86 times more potent than that of carbon dioxide.
Nord Stream pipelines Nord Stream is a system of offshore
natural gas pipelines in Europe, running under the
Baltic Sea from Russia to Germany. The pipelines are owned and operated by subsidiaries of Gazprom. The Nord Stream projects have been fiercely opposed by the
United States and
Ukraine, as well as by other Central and Eastern European countries, because of concerns that the pipelines would increase Russia's influence in Europe, and because of the knock-on reduction of transit fees for use of the existing pipelines in Central and Eastern European countries. German chancellor
Olaf Scholz suspended certification of Nord Stream 2 on 22 February 2022 because Vladimir Putin led Russia to
recognize the
Donetsk and
Luhansk regions of Ukraine as independent republics. On 26 September 2022, a severe drop in pressure in both NS1 and NS2 was associated with a rupture in both pipes due to sabotage.
Greenpeace protest against Arctic drilling Gazprom's oil drilling in the Arctic has drawn protests from environmental groups, particularly
Greenpeace. Greenpeace has opposed oil drilling in the Arctic because it believes that oil drilling damages the Arctic ecosystem and that there are no safety plans in place to prevent oil spills. In August 2012, Greenpeace staged protests against the Prirazlomnaya oil platform, the world's first offshore Arctic drill site. On 18 September 2013, the Greenpeace vessel
MV Arctic Sunrise staged a protest and attempted to board Gazprom's Prirazlomnaya oil platform. Greenpeace stated that the drill site could cause massive disruption to the Arctic ecosystem. After arresting two campaigners attempting to climb the rig, the
Russian Coast Guard seized control of the Greenpeace ship by dropping down from a helicopter and arresting thirty Greenpeace activists.
Arctic Sunrise was towed by the Russian Coast Guard to
Murmansk. The Russian government intended to charge the Greenpeace campaigners with piracy and hooliganism, which carried a maximum penalty of fifteen years imprisonment. Greenpeace argued their operatives were in international waters. According to
Phil Radford, Executive Director of Greenpeace in the
US at the time, the reaction of the Russian Coast Guard and the courts were the "stiffest response that Greenpeace has encountered from a government since the
bombing of the
Rainbow Warrior in 1985." The charges of piracy were dropped in October 2013. In November 2013, 27 of the 30 activists were released on bail. In May 2014, the first shipment of Arctic oil arrived at a refinery in the Netherlands and was purchased by the French company,
TotalEnergies. The episode is portrayed in the 3-hour television documentary
On Thin Ice: Putin v Greenpeace.
Sanctions Following
Russia's continued aggression towards
Ukraine, the
US tightened its debt financing restrictions on
Gazprombank on 17 July 2014. On 12 September 2014, the United States barred U.S. persons from selling goods and services to Gazprom and
Gazprom Neft in connection with certain deepwater, Arctic offshore and shale projects. On 31 July 2014, the EU placed financial restrictions on Gazprombank. On 8 September 2014, the EU placed financial restrictions on Gazprom Neft. In April 2018, the United States placed
CEO Alexey Miller among the
Specially Designated Nationals. This sanction bars U.S. individuals and entities from having any dealings with him. Entities outside the U.S. jurisdiction may also face punishment if the U.S. government deems they are aiding a sanctioned entity. Miller himself claimed to be proud of the sanction: "Not being included in the first list I even had some doubts – may be something is wrong (with me)? But I am finally included. This means that we are doing everything right," Miller said through his spokesman. In December 2019, the U.S. sanctioned firms involved in the
Nord Stream 2 project. On 24 February 2022, upon the
2022 Russian invasion of Ukraine, the U.S. expanded penalties on
Nord Stream 2 AG, a subsidiary of Gazprom, and sanctioned its CEO
Matthias Warnig. It also expanded debt and equity prohibitions against
Gazprombank, Gazprom, and
Gazprom Neft. In addition, following the invasion, in March 2022 the
European Union formally approved a ban on investments in the Russian energy sector, including Gazprom Neft. The UK banned Gazprom from its debt and equity markets on 2 March 2022, sanctioned Gazprombank on 24 March 2022, and Gazprom board members on 1 March 2023. Gazprom Energy, a UK firm, stated that "supplies 20.8% of non-domestic gas volume in Great Britain. We source our gas through commodity exchanges in exactly the same way as our competitors and we do not depend on gas supplies from Russia." On 18 July 2022, amid the
Nord Stream 1 maintenance period, Gazprom sent a letter declaring
force majeure, claiming that due to extraordinary circumstances it could not guarantee a gas supply. On 26 September 2022, a rupture occurred in both pipes due to sabotage. In the first half of 2022, Gazprom reported high profits, roughly equal to the profit for the whole of 2021, due to high prices. In the second half of 2022 and into 2023, Gazprom likely did not make a profit at all due to falling exports. Overall, Gazprom made a profit of 1.226 trillion roubles ($15.77 billion) in 2022, down 40%, after an extra tax was levied in late 2022. On 19 December 2022 the European Energy ministers agreed on a
price cap for natural Gas at €180 per megawatt-hour aiming to stop Russia forcing European gas prices upwards. Exports of gas by Gazprom from Russia in 2021 was 185Bcm, in 2022 it fell by 45% to 100Bcm and in 2023 it fell again to 62Bcm.
Private army In February 2023 Russian prime minister
Mikhail Mishustin signed an order giving
Gazprom Neft the right to form its own private army.
Reducing and ceasing supplies to gas companies After the February 2022 invasion of Ukraine and the West's introduction of sanctions, Western gas companies continued to pay, normally
Gazprom Bank accounts in euros and dollars, which meant that the funds became blocked by sanctions. On 31 March, President Vladimir Putin signed a
decree − , requiring payment to be made by alternate means. Many Western companies refused to pay except in accordance with their contracts; accordingly, Gazprom ceased supplying those companies. There had also been cases of short delivery by Gazprom. This created the
2022–2023 Russia–European Union gas dispute Arbitration cases through the
International Court of Arbitration have been started by many western companies with long term contracts, for damages due to short supply or cessation of supplies in breach of Gazprom's contractual obligations, including Germany's
Uniper, who is claiming €11.6 billion compensation from Gazprom and
Engie which opened proceedings in February 2023 for short delivery, Gazprom went to arbitration for €300m for unpaid gas from
Gasum in Finland, which the arbitration decided was payable, but not in rubles. India's
GAIL is also seeking compensation through a London arbitration court over Gazprom's short delivery of LNG to India, which was disrupted by sanctions against a Gazprom subsidiary in Germany. ==See also==