April 27 (UPI) -- Russian natural gas company Gazprom said Thursday its net sales decreased 4 percent in large part because of pricing issues, though owner profits increased.
Russia has some of the largest natural gas reserves in the world and Gazprom is its largest supplier. The company said net sales for the year ending Dec. 31 decreased 4 percent compared with the same time last year, largely on pricing issues. Sales to the European market, which gets about a quarter of its gas needs met by Russia, were down 1 percent year-over-year.
"This was mainly driven by the decrease in average Russian ruble prices, including excise tax and customs duties, by 22 percent, which was partially compensated by the increase in volumes of gas sold by 24 percent," the company said.
Gazprom is under scrutiny in the European market because of business practices seen as monopolistic. In some cases, Russia is the sole supplier of natural gas, as is the case with Poland.
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Polish Oil & Gas, known by its acronym PGNiG, said Thursday it brokered a contract for liquefied natural gas from Cheniere Energy, the only U.S. company with the permit needed for current LNG exports to countries that don't have a free-trade deal with the United States. The International Monetary Fund said in January, however, that Poland, a former Soviet republic, faces risks from a European Union threatened by the British exit and possible revisions of U.S. trade policies under President Donald Trump.
Gazprom nevertheless reported that sales to former Soviet republics declined 28 percent from 2015, though the company blamed that again on the decline in prices.
Energy prices collapsed last year amid a glut of crude oil on the market. Russia's currency depreciated against other denominations and the economy lingered in recession for much of last year. A major oil producer, Russia is party to the multilateral deal to offset supply-side pressures through managed declines that's helped establish a floor price of around $50 per barrel for oil.
According to a review of the data by Russian news agency Tass, Gazprom gas supplies to foreign countries were up 15 percent year-over-year during the first quarter. That supports a January report from S&P Global Platts, which found European demand for natural gas accelerating against declining domestic production.
Gazprom said profits attributable to its owners increased 21 percent from 2015, while operating expenses increased 13 percent.
