Capitalization of "Gazprom": dynamics by years

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:48

Natural gas production in Russia has been one of the most profitable areas for quite a long time. Throughout the country is full of deposits of this resource. Gas is produced by the transnational corporation Gazprom. There are several other small companies, but they are affiliated with Gazprom and do not operate separately from it.

About the concern

Gazprom is the world's largest organization for gas production, processing and sale to all segments 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 world's volumes is 16.9%, in the Russian Federation - 60%.

Main gas pipelines built in Russia,are also owned by this company. And other countries are also supplied with gas by transferring the resource through Gazprom's pipes.

According to the data published on the website of the organization, it can be said that all the company strives for is to provide its consumers with gas in a timely and sufficient manner, and in addition, to comply with intergovernmental agreements and not allow doubts about its reliability.

But Gazprom's ultimate goal is to enter the world stage as a global company.

Are the group shares popular?

As you know, the gas giant is very popular among the population. Gazprom shares are the most attractive investment option. Among the shareholders is the state, while it takes first place.

The state company "Rosneftegaz" also bought out part of the shares of "Gazprom". 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 be surprising that in the ratings of the largest corporations on the planet, Gazprom occupies a place in the top ten. On the other hand, according to Bloomberg journalist Anders Asland, “No major company in the world is run as mediocrely as the Russian Gazprom.”

What were the forecasts before 2015?

Taking into account the development of gas production activities since the start of work"Gazprom", the shareholders were sure that this company will always be in value. For example, during 2005, the share price rose at a tremendous rate. The capitalization of Gazprom changed over the years only in a positive way. 2006 was also significant, because it was in this year that the corporation entered the top ten in the ranking of the largest companies in the world.

Gazprom's market capitalization in 2007 was 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. At that time, the maximum capitalization of Gazprom was observed, 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. The countries have effectively terminated the fuel supply agreement.

By these events one could judge the beginning of the fall of the gas giant, because Ukraine purchased about 10% of the resource supplied by Russia.

What happened to Gazprom in 2015?

This year was not successful for the corporation. Within a few months, capitalization fell, Gazprom was worth a little over $40 billion. Competitors in terms of value, that is, Sberbank and Rosneft, were growing in price, while the gas giant was tilting more and more.

However, at the time of 2015, the corporationwas the leader of the rating based on information from the Moscow Exchange.

If we analyze what was the capitalization of Gazprom from 2014 to 2015, the dynamics over the years will show a fall by as much as 20%. Such numbers for one year may signal a very unstable position for the company.

Accordingly, the gas production itself has also decreased. The level of production fell to 414 billion cubic meters. These indicators are the lowest, and the capacity of Gazprom's equipment is designed for large scales.

Competition: Gazprom vs Rosneft

As you know, competitors are even politically trying to influence the course of the concern. The vice-president of Rosneft advocated the abolition of the export monopoly of Gazprom. There were also demands from rivals to split the gas giant into smaller companies.

Besides this, judging by how much the competitive capitalization is now, Gazprom may be forced out of the first positions in the world market.

In April 2016, trading on the London Stock Exchange brought Rosneft to a higher level for the first time. Capitalization also increased, while Gazprom lagged behind by $18 million.

Gazprom shares against Sberbank shares

Not only Rosneft influenced the fall of the corporation. Ordinary shares of Sberbank at the end of August 2016 suddenly exceeded the capitalization of Gazprom shares.

Two largest corporations in Russia clashed at the auctionMoscow exchange. The capitalization of Sberbank suddenly exceeded the value of Gazprom by more than 100 billion rubles. And this is far from the limit, especially given the current depreciation of Gazprom shares.

What made 2016 different for the gas corporation?

As mentioned above, competitors in exchange trading began to gradually put pressure on the concern, which had been knocked down by the events of 2014. For seven years (from 2008 to 2015), capitalization has decreased by almost ten times, Gazprom has been losing its positions on world stock 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 can wonder for a long time about the negative attitude of potential shareholders towards Gazprom. One thing is clear: the corporation's development forecasts for 2017 are quite disappointing.

What threatens the bankruptcy of Gazprom?

For starters, we must not forget that the corporation is currently busy building a gas pipeline 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 only leads to huge expenses for Russia and a decrease in the size of fuel production.

Also, Gazprom is betting on an increase in export prices for gas transit. According to experts, this step is ill-conceived and can lead to the ruin of the company. The buyer is always looking for cheaper,an expensive product of the same quality does not make you want to buy 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. Despite the fact that Russia is the country with the most 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 Gazprom's difficulties on the state budget. After all, more than ten percent of the country's financial condition was provided by the corporation's income. And the entire oil and gas arsenal is generally forty percent. With the possible bankruptcy of Gazprom, there is a huge risk for the stability of the state economy as a whole. To prepare for possible problems, it is necessary to reconsider the economic course of the country now.

Even if we take into account what was the capitalization of Gazprom over the years, and reasonably assess the situation based on facts, it is impossible to predict the exact development of the situation.