Record profits for Gazprom Neft as Kremlin takes advantage of gasoline prices Business

Russian state oil producer Gazprom Neft made record profits after increasing production amid rising prices.

Profits quadrupled to 503bn rubles (£4.8bn) last year as its output topped 100m tonnes of oil equivalent for the first time.

Oil prices have soared nearly 50% to around $93 a barrel in the past 12 months as economies rebound from the pandemic. Analysts have warned that the price of crude could hit $100 if supplies are disrupted due to tensions between Russia and Ukraine.

Gazprom Neft is the oil-producing subsidiary of state gas giant Gazprom, which has been accused of aggravating the global gas price crisis by limiting supplies to Europe.

The subsidiary plans to pay a record dividend of 40 rubles (39p) per share.

Alexander Dyukov, Managing Director, said: “In 2021, the company reached the milestone of 100 million tonnes of oil equivalent for the first time in its history, having doubled its production in ten years.

“We continue to develop new exploration and production projects in response to growing demand for petroleum and petroleum products.”

The company said it expects hydrocarbon production to increase by 5% per year from 2023 to 2024, following an expected increase of 10% in 2022.

Russia is part of the OPEC-plus coalition of oil producers, which is gradually lifting production restrictions introduced at the height of the pandemic when demand slumped. However, several coalition members have struggled to ramp up production to meet targets, with the International Energy Agency urging the group to close the gap.

Rising oil prices have been felt at UK petrol pumps, with petrol and diesel prices both hitting record highs over the past week.

Petrol climbed to 148.02p per liter on Sunday and diesel climbed to 151.57p per liter – topping previous highs in November last year of 147.72p and 151.10p respectively.

It comes as soaring natural gas prices are contributing to a 54% rise in household energy bills from April, taking average annual bills to £1,971.

Critics have accused Gazprom of withholding supply from the European spot market to pressure Germany into starting a new pipeline, Nord Stream 2, that would bypass Ukraine.

Gazprom denied any market manipulation, saying, “Gazprom delivers gas in accordance with consumer demands in full compliance with applicable contractual obligations.”