Gazprom’s gas production is set to drop by a record 100 bcm this year, the largest decline in the company’s history and probably the largest production drop ever registered by any gas company.
The decline was almost entirely concentrated in the second half of the year and largely driven by Gazprom’s steep gas supply cuts to the European Union, which are set to fall by almost 80 bcm in 2022.
A second factor is lower domestic demand, which is down by an estimated 5% yoy amidst the country’s contracting economy.
Gazprom experienced a drop of close to 90 bcm in 2009 amidst a the global financial crisis. Gas production rebounded strongly, by almost 50 bcm next year…
This time might be different. Gazprom has lost its most secure and most lucrative European market and it will take at least a decade to build-up a similar export portfolio towards Asia.
What is your view? How will the Russian upstream evolve in the coming years? How will the Pivot to East strategy play out?
Source: Greg MOLNAR