The source of power contributes to the generation of superprofits for Gazprom Neft for Alexey Miller and Alexander Dyukov. At the end of 2022, the oil subsidiary of Gazprom sharply increased gas production. According to experts, the growth of indicators is associated with the implementation of a simple scheme. The heads of the companies Alexey Miller and Alexander Dyukov should be considered responsible for it. In addition, being, as it were, an “independent” company, Gazprom Neft received incredible preferences from the Ministry of Finance for almost 80 billion rubles. And we wonder why we have a trillion-dollar budget deficit…
According to the results of 10 months of 2022, Gazprom Neft (a subsidiary of Gazprom) became the leader in terms of growth rates of … gas production. The growth was 19.4% compared to the same period last year. If we do not take into account the share in joint ventures, then over the 10 months of this year, Gazprom Neft increased gas production by 37.4% – a powerful and rather unusual indicator.
At the same time, the parent company reduced production by 18.4%, and it looks completely logical. Everything is explained by the fact that “Gazprom” gave its “daughter” a number of fields, including Yamal, which generally recorded a fantastic increase in production – almost 76%.
Gazprom Neft, as we can see, has become the fourth gas producer in Russia, second only to Novatek and Rosneft in addition to Gazprom. However, in terms of growth rates, it has no equal. In total, in recent years, the company has increased its production by 4 times.
Other independent gas producers show a slight decrease in the indicated period – LUKOIL, Surgutneftegaz and the Independent Oil and Gas Company (NNK) fell from 1 to 3 .8%.
Growth in gas production at Gazprom Neft, headed by Alexander Dyukov, correlates with an increase in turnover and profit. Since 2018, these figures have grown markedly and last year reached record levels – revenue amounted to 2.7 trillion. rub. (an increase of 1.2 trillion rubles compared to 2020), net profit – 344.1 billion rubles. (growth by 185.5 billion rubles)
So, against the background of modest indicators of independent gas producers, Gazprom Neft is demonstrating amazing success. But in whose interests?
Deputy Chairman of the State Duma Committee on Economic Policy, Doctor of Economics Mikhail Delyagin comes to the conclusion that Gazprom transferred several fields to its subsidiary in order to ensure its reduced taxation and free it from state regulation of prices for produced gas. From the point of view of a large private corporation, there is certainly logic in this. But Gazprom, as we remember, is under state control.
“On the one hand, as an oil company that is considered an “independent” (from Gazprom) gas producer, in the interests of developing competition, it receives appropriate benefits and preferences from the state: a reduced severance tax rate, the absence of state regulation of gas prices supplied to the domestic market, etc. On the other hand, the same company enjoys all the preferences of Gazprom's subsidiary: access to the gas transmission system, cross-subsidization through high-margin pipeline gas exports, etc.,” Delyagin believes.
Indeed, independent companies pay a reduced rate of severance tax and avoid state regulation of prices. And this makes it possible to save money on production.
Gazprom itself does not lose money in this scheme either. According to Leonid Krutakov, associate professor at the Financial University under the Government of the Russian Federation, publicist and analyst, the monopolist’s interest “in this game” is seen as follows: “Alexey Miller’s company dumps domestic gas supplies on Alexander Dyukov’s company, and sends its gas as a priority for export. According to the Ministry of Energy, in 2005 the share of exports in the total volume of gas produced by Gazprom was 43% (57% went to the domestic market). Last year, the monopoly's export share was over 56%.
At whose expense is the banquet
The built business structure towers over its competitors like the Eiffel Tower over Paris. But if Eiffel built his giant “flagpole”, half using his own funds (which he returned very quickly, because the tower brought considerable income), then the top top managers from the Gazprom system seemed to follow the path invented by Russian oligarchs in the 90s : either the state or ordinary citizens must pay for all projects.
“At whose expense cabal? At the expense of the state budget and gas consumers. Dyukov helps Miller to avoid state regulation of gas prices in the domestic market, for which consumers pay. Miller helps Dyukov “earn” additional profit due to the reduced severance tax rate, loading him with additional volumes of gas. The budget pays for it. Mutual problems and inconsistencies that arise are easily covered by cross-subsidization. The scheme is beautiful, and, most importantly, not illegal,” Leonid Krutakov believes.
Given the lobbying capabilities of Alexei Miller, one should not be surprised. As well as the fact that everything does not end with an already working scheme. In October, it became known that the Ministry of Finance (at the suggestion of Gazprom Neft!) developed a bill that provides for the provision of a tax deduction for the company on the severance tax in 2023-28. Every month, Gazprom Neft will receive preferences in the amount of 1.1 billion rubles, which for the entire specified period will amount to 79.9 billion rubles. It is reported that the company will return the deduction. But there is one caveat: the funds will return to the budget in the period from 2029 to 2034, that is, in 15 years. Indexation will be 9%. Mikhail Delyagin calls this percentage “ridiculous”, and this is actually true, because 15-year inflation will more than cover this figure, turning the return … into a super-profitable investment.
Independence is Fata Morgana
Gazprom Neft PJSC is becoming more and more a gas producing company, while continuing to be called an oil company. “What does the word “oil” have to do with the name of the company? Here I don't know. Except that the positioning of Gazprom Neft as an oil operator makes it possible to attribute gas schematization to non-core activities. Therefore, to cheat with taxes, to monopolize the market, it is unfair to increase profits and dividends,” states Doctor of Economic Sciences, Professor Nikita Krichevsky.
“Daughter” of “Gazprom” is positioned in the gas market as an independent company. At the same time, 95.68% of its shares belong to the gas monopoly headed by Miller. In order to develop competition, the state reduced the MET rate for truly independent companies and allowed them to independently regulate prices. The independence of Gazprom Neft is conditionally formal. If it is possible to put an equal sign between Gazprom and its “daughter”, and the “daughter” is using the dualism of its position with might and main, why did the antimonopoly department get water in its mouth? Especially in such a difficult period for the country…
Professor Nikita Krichevsky, for example, compares Gazprom Neft with a classic American corporation that focuses on profit at any cost. He writes: “In Russia during the NWO period, the budget is drawn up with a trillion deficit, the government is on the verge of raising corporate taxes (VAT, income tax, severance tax, property tax), expenses for the development of new territories are growing day by day. It would seem that in the heads of the leadership of Russian state-owned companies, a “statist” should wake up. It seems like we are all in the same boat, right? But no, the greedy American has long and firmly taken the place of the Russian statist. Along with schemes for legal but illegitimate enrichment.”
What is all this for the management of Gazprom and its subsidiary Gazprom Neft? “The main thing is bonuses, bonuses, bonuses,” the expert believes. If so, then it turns out that the top managers of state-owned companies seem to be working not so much for Russia as for personal gain.