Gazprom is facing the winds of change

Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, commented to the Neft and Capital magazine on the prospects for Gazprom's adaptation to new market conditions.

According to Alexey Belogoryev, Gazprom will try to balance its declining revenues with huge investments. However, this is a very lengthy and costly process that affects all business segments, especially the pipeline infrastructure.

"In terms of income, little depends on the holding. Export markets have already bottomed out, and supply growth will be negligible in the next few years. We can talk about some stagnation. Gazprom cannot particularly influence the price of gas on foreign exchanges either. All that remains is to lobby for an increase in prices for gas transportation within the Russian Federation (there has not been since 2015), as well as an increase in prices for consumers tariffs.

In fact, there is simply nowhere to strengthen the management vertical. The company has two options. The first is to optimize the transport infrastructure, part of which is idle and unprofitable. It's not profitable to keep it now. But Gazprom has always been conservative in this regard and is not ready to get rid of assets just like that. The second option is to continue to put pressure on the government in order to further raise prices for gas and transportation tariffs," the expert believes.

According to Alexey Belogoryev, the holding will not advertise its steps, so we will not notice the results of the changes immediately and only indirectly. At the same time, Gazprom will increasingly focus on the oil business (given that Gazprom Neft is performing better). Especially if the price of black gold on the world market remains at current levels. In this regard, Gazprom is not the only company that is currently switching to a more profitable business.