Gazprom's liquidity strong despite sanctions
Business |
Gazproms liquidity hit a record $24 billion, despite weaker profits and declining gas prices in Europe in the first half of 2014, Fitch Ratings said on Monday.
Russian energy giant Gazproms liquidity by the end of June 2014 was $24 billion, according to the report from Fitch Ratings.
"We view the record cash pile as a response to the U.S. and EU sanctions announced in March 2014, which have effectively kept Gazprom away from the international debt capital markets since the spring," Fitch said.
"Gazprom has arguably the best access to available sources of funding among Russian corporates," Fitch asserts.
To put pressure on Russia because of its aggression in Ukraine, the EU and the U.S. announced various sanctions, including restrictions on Russia's three biggest oil companies - Rosneft, Transneft and Gazprom Neft, banning them from raising long-term capital on European financial markets.
Gazprom Neft started borrowing from domestic banks in 2014 to counter the effect of financial sanctions. As of 30 June 2014, 40 percent of Gazproms cash was with affiliated Gazprombank, which is prohibited from tapping international capital markets because of the sanctions, Fitch noted.
Gazproms European gas sale price dropped by 5 percent to $366 per thousand cubic meters, however, European gas sales were up 1 percent to 86 billion cubic meters. According to Fitch, Gazproms gas sale price was down because of competitive pressures from other suppliers such as Norways energy company Statoil.
Anadolu Agency
"We view the record cash pile as a response to the U.S. and EU sanctions announced in March 2014, which have effectively kept Gazprom away from the international debt capital markets since the spring," Fitch said.
"Gazprom has arguably the best access to available sources of funding among Russian corporates," Fitch asserts.
To put pressure on Russia because of its aggression in Ukraine, the EU and the U.S. announced various sanctions, including restrictions on Russia's three biggest oil companies - Rosneft, Transneft and Gazprom Neft, banning them from raising long-term capital on European financial markets.
Gazprom Neft started borrowing from domestic banks in 2014 to counter the effect of financial sanctions. As of 30 June 2014, 40 percent of Gazproms cash was with affiliated Gazprombank, which is prohibited from tapping international capital markets because of the sanctions, Fitch noted.
Gazproms European gas sale price dropped by 5 percent to $366 per thousand cubic meters, however, European gas sales were up 1 percent to 86 billion cubic meters. According to Fitch, Gazproms gas sale price was down because of competitive pressures from other suppliers such as Norways energy company Statoil.
Anadolu Agency
