Gazprom posts colossal $16 bn first quarter profits

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The world's biggest gas firm Gazprom on Tuesday announced colossal profits of $16.24 billion for the first quarter, one of the biggest interim profits in history and driven by high global energy prices.

The profit of 468 billion rubles ($16.24 billion) for January through March was up 44 percent from the same period in 2010.

The results underlined the massive profitability of the state-owned gas giant at a time of high global energy prices after it made $35 billion in 2010, one of the biggest full year profits ever.

Gazprom said net sales of gas increased 42 percent to 870 billion rubles ($30.2 billion) in the quarter due to higher volumes of gas sold and an increase of average realised prices for sales in all its geographical areas.

Total sales for all Gazprom's operations increased 38 percent to 1.316 trillion rubles ($45.5 billion), it said in a statement.

Gazprom in the period saw an increase of average prices for gas pumped to European and other non-ex-Soviet customers of 14 percent in the period as well as an rise in volumes sold of 12 percent.

The results mean that Gazprom is already well on the way to topping its record performance in 2010 when it posted the biggest profits in its history.

According to Gazprom, it has the right for development of one fifth of worlds gas reserves and provides for one sixth of worlds gas production.

Gazprom, founded in 1989, grew out of the USSR's Gas Industry Ministry and was part-privatised from 1993 in the much-criticised sale of state assets in post-Soviet Russia.

The government has retained a controlling stake of just over 50 percent, according to the company's website and the firm is now a cornerstone of the modern Russian state.

Yet the company has been bitterly criticised for its role in the 2009 gas crisis with Ukraine that led to major supply cuts for European consumers and its exceptionally close ties to the Russian political leadership.

President Dmitry Medvedev himself served as Gazprom board chairman and several of its top executives are natives of Saint Petersburg, the home town of both Medvedev and Prime Minister Vladimir Putin.

© 2011 AFP

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