Higher prices hurt Gazprom

GAZPROM, the state-owned Russian energy giant, yesterday said its profits for the first six months of the year had halved, even as the cost of gas soared.<br /><br />Profits in the period tumbled to 305.8bn roubles (&pound;6.3bn) from 609.4bn roubles in the first half.<br /><br />The company blamed the price of buying gas from central Asia, which has increased by 105 per cent, for the plunge in profit.<br /><br />The news comes after oil giants BP and Royal Dutch Shell reported a slump in profits last month on the back of fluctuating oil prices. The commodity peaked at $147 (&pound;87.70) per barrel in July last year, before slumping to $30, and has now rebounded to around $79.<br /><br />Gazprom officials said gas supply volumes to Europe had reached a minimum in April and that, in July, they exceeded volumes seen in recent years.<br /><br />They added the Ukraine had been &ldquo;diligent&rdquo; in paying for gas to date and that the company hoped this would continue. <br /><br />The comments come after Russia cut off gas supplies to the West late last year as part of a pay dispute with the Ukraine, which left millions of Europeans in the cold.<br /><br />Late last week, Russian Prime Minister Vladimir Putin warned the Ukraine against late payment, but a transfer of $500m (&pound;348m) quickly followed. <br /><br /><strong>FAST FACTS </strong> GAZPROM<br /><br />&bull; Gazprom, the world's largest producer of natural gas, saw its earnings slump in the half year.<br /><br />&bull; The company&rsquo;s debt increased by a third to 1.3 trillion roubles as it borrowed heavily to finance a 20 per cent stake in Gazprom Neft.