Written by ChilliPepper   

Gazprom On the Brink of Bankruptcy, Company Sources Reveal As Russia is stifled with amassing formal and informal sanctions, its federal budget backbone, Gazprom, is tormented by drastic profit decrease and drained by kickbacks.

Sergey K., an insider, overseeing Gazprom corporate security division (‘sluzhba korporativnoi zashiti’) has contacted JaneCollins by e-mail with alarming information. 'My motive', Sergey K. writes in his letter 'is to avert even worse possible implications for holders of Gazprom securities'.

On March 28, Alexey Miller, the Gazprom Deputy Chairman, has held an extraordinary board meeting behind closed doors, where a 40% layoff and asset stripping have been heatedly discussed. Major reasons behind such unprecedented actions are told to be an overly expensive "Crimea campaign". Also, a rupture between Kiev and Moscow generates risks of 'lethal' loss of cashflow. Finally, U.S. and Norway proposals to substitute Russian gas on the EU market indicate most grim erspectives for the largest Russian company "in its history", Sergey K. quotes Miller.

But the most repugnant news is that different Gazprom divisions are now being 'assigned' to secretely bankroll any whims of officials and businesspeople, sanctioned by the US and EU, like the the Rotenberg brothers, major financiers behind the Northstream pipeline and Gennadi Timchenko, former owner of Gunvor.

According to FT, on January 23, "Gazprom reported a 10.8 per cent drop in net income for the third quarter of 2013, reversing a first-half profit increase because of growing operating costs and a drop in finance income that offset higher revenues from gas sales (...) Brussels has also told Gazprom that its contracts with several EU member states for Southstream, a planned new pipeline project for supplies to Europe, must be renegotiated to comply with Brussels’ new energy laws. As Brussels has forced Gazprom to leave another pipeline on EU territory 50 per cent idle in a similar dispute, officials argue that Brussels’ new demands impose huge additional financial risks on the company.”

Apparently, Gazprom is under continued pressure from Brussels within an EU anti-trust probe, its next phase to start in May. An earlier PricewaterhouseCoopers report has fingered at Gazprom as top-1 global captalization loser with $200 bln losses between March 2008 and March 2013.


Exhausted by sponsoring Putin's agression against Ukraine, providing for luxury life-styles of its management and growing baksheesh for certain European politicians, and battered by international criticism, Gazprom faces a no-go with its largest supply and transit contract with Ukraine and $11 bln of immediate wastage after Duma votes to cancel the swindling so-called '2010 Kharkov amendment' to the 2009 gas deal with Ukraine.

'Things to get even worse ahead', Sergey K. concludes - 'As many foreign professionals in Russia are going to be arrested or expelled on charges of 'espionage'. In its turn, Ukraine, which fell victim to Putin's appetites, is looking into proposals by German RwE and a consortium of American companies to re-build its gas supplies.