The Russian energy giant and once the linchpin of the powerful Russian gas business, Gazprom, before Vladimir Putin's invasion of Ukraine, not only supplied Europe with gas in large quantities, but also "ran" its economy. Germany, whose economy was widely regarded as the locomotive of European development, was dependent on Russian gas. Gazprom also spent millions on sports sponsorships, especially football.
Gazprom sponsored the strongest European and world club competition, the Champions League. The logo of the Russian company was on the jerseys of several popular European teams. It was all part of an effort not only to improve the image of the Russian gas giant, but also partly to obscure the company's ties to Putin's government... but the intentions were broader than that.
"Gazprom's sponsorship contracts are rarely transactional. They are almost always geopolitical," Simon Chadwick, a professor of sports economics and geopolitics in France, told RFE/RL in May after the Hungarian tabloid "Blikk" published the story of the deal between the Hungarian club Ferencvaros and Gazprom worth millions of euros.
After the start of the Russian invasion of Ukraine in late February 2022 - when the West imposed sanctions on Moscow - European countries began to replace Russian gas with other sources. Termination of sponsorship contracts with Gazprom was also requested. Only clubs like Ferencvaros and Red Star of Belgrade decided to keep Gazprom as a sponsor, to stay close to the Kremlin just like the leaders of their countries, Hungarian Prime Minister Viktor Orban and Serbian President Aleksandar Vučić, who see their economic interest and (geo )politic at multiple levels.
Since Putin ordered the invasion of Ukraine, work for the state-controlled mega-company has fallen markedly. Sales in Europe have fallen, with a tendency to go to zero, the Nord Stream gas pipeline - considered a key pipeline - was destroyed. Gazprom began to report continuous losses in business.
Gloomy predictions
The latest report from Gazprom best illustrates the state of the company and the Russian gas business. Gazprom, the cause of the war in Ukraine, the report says, may not recoup lost export earnings for at best a decade, but possibly longer.
also
Russia and China sign gas deal
The company's exports to Europe, according to estimates presented in the study, as reported by the Financial Times, will average 50 to 75 billion cubic meters per year by 2035, which is less than a third of the sales levels of pre-war. Currently, the main route for the export of Russian gas to China is the "Power of Siberia" pipeline, which, according to some estimates, flowed record volumes to China at the beginning of the year.
Although Gazprom hopes the new Power of Siberia 2 pipeline in China can help offset lost European exports, China is delaying a deal to build it and the capacity will be only 50 billion cubic meters a year, while prices in that Asian country are much lower than in Europe, the report says. Add the fact that no agreement has yet been reached on its construction. "The main consequence of the sanctions for Gazprom and the energy industry is the decrease in the volume of exports, which will return to the level of 2020 no earlier than 2035," the authors of the report stated.
The 151-page report, written late last year, is one piece of evidence of how Western sanctions imposed in response to Russia's war have hurt Gazprom and the wider Russian energy sector. Elina Rybakova, a senior fellow at the Washington-based Peterson Institute for International Economics, said after reading the research that it was very "bleak". "Gazprom is at a dead end and they know it well," she added.
