1. Unprofitability. According to IFRS for 9 months of 2020, losses amounted to $2.7 billion. This result was facilitated by a reduction on natural gas production and exports. In 2020 production volumes fell by 9% (452.7 billion cubic meters) and exports by 10% (179.3 billion cubic meters). The procurement of Russian gas was significantly reduced by both domestic consumers and the foreign market — Germany, Italy and Turkey. The losses of the pipeline gas market do not cover the deliveries through LNG terminals, which increased in 2020 only by 2%.

2. Strategic loss of markets. One of such examples is Turkey. In 2020, Russian gas supplies to Turkish consumers significantly decreased and amounted to approximately 8 billion cubic meters, or 27% of contract volumes, which is more than three times less than in 2014. This trend will be reflected in future contracts. For example, the contract between Gazprom and Botas (8 billion cubic meters/year) comes to an end in 2021, and the contract for fuel transportation through “Blue Stream” (16 billion cubic meters/year) — in 2025.

3. Unprofitable infrastructure projects. Over the past 10 years, Gazprom has spent about $200 billion on new pipelines, but their operational capacity rate is about 40% on average. A striking example is “Power of Siberia”, through which only 4.1 billion cubic meters that equals 11% of the pipeline capacity were transported to Chinese consumers in 2020. Therefore, all projects such as “construction of the century” are absolutely unprofitable from the economic point of view, because they were built for geopolitical reasons. Moreover, this mystery will be continued in 2021, as a new gas pipeline from Yamal to Mongolia and China is being developed, and the capacity of “Sakhalin- Khabarovsk-Vladivostok” system is being expanded.

4. Reluctance to the civilized dialogue. Gazprom’s defeat in an arbitration dispute with Polish PGNIG in 2020, as well as fines of some EU countries, has once again demonstrated the Russian monopoly’s unwillingness to engage in civilized dialogue and significantly decrease chances to impose its policies on the European market. After all, the Stockholm court ordered to change the price formula and pay the compensation to Poland in the amount of $1.5 billion. In addition, almost $0.1 billion fines were imposed on Gazprom by the Polish Antimonopoly committee.

5. No changes in the organizational structure. For 20 years, Gazprom has failed to carry out a corporate reform and divide the company into three: mining, transportation and regional networks. Obviously, this will also affect the prospects of the employment contract with the current chairman, which ends in 2021.

All the signs indicate that the Russian monopolist has once again outsmarted himself, as in that anecdote about the sumo wrestlers.