Gazprom Profit Jumps on Weaker Ruble Even as Gas Sales Drop

A weak rouble has helped to boost profits for Gazprom.

Executives at the company, which announced a 71 percent jump in first-quarter net profit yesterday, told a conference call it was too early to say how the decision could affect the project.

Gazprom’s position in Europe, where it accounts for around one-third of imports, is also under pressure from the competition regulator, which has filed antimonopoly charges against the company.

The US said it would curb supplies of equipment to Gazprom’s Yuzhno-Kirinskoye, the company’s largest offshore field.

Though Western sanctions in response to Russia’s actions in Ukraine resulted in a 16 percent drop in Gazprom’s European sales volumes, export revenue was up 12 percent at 543 billion rubles ($8.42 billion).

Brent oil slumped 48 percent last year, the most since 2008.

Gazprom wants Sakhalin-3 to provide gas to expand capacity at Sakhalin-2 to as much as 15 million tonnes a year by the next decade from 10 million now.

Free cash flow was 252 billion rubles, or about $4 billion at average exchange rates, Alexander Kornilov, an oil and gas analyst at Alfa Bank in Moscow, said Monday.

Profit at Gazprom, Russia’s biggest company by market value, rose even as oil’s slump weighed on export prices for its gas, which are linked to crude under most contracts. On Friday the United States added Gazprom’s Yuzhno-Kirinskoye oil and gas field to its sanctions list against the Russian energy sector.

The profit figure exceeded analysts’ predictions averaging 347bn rubles for the January-to-March period, Interfax news agency reported. Total sales rose 6% to 1.65tn roubles.

Gazprom has recently encountered difficulties with some of its partners, including conflict-hit Ukraine.