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Analysis before buying or selling Gazprom shares

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Before buying, selling or trading on the GazProm group's share price, you must have all the knowledge essential to carrying out your analyses of this stock. Through this article, we will help you in this regard by revealing the details of the activities and revenues of the company, its main competitors on the market as well as some examples of recent partnerships and the elements to monitor as part of your fundamental analysis of this stock because of their likely influence.

Elements to consider before selling or buying Gazprom shares

Analysis N°1

First of all, closely monitor the various agreements that the Gazprom group is likely to sign with certain companies relating to the scientific and technological aspects of its activity. These agreements can help Gazprom to develop new technologies in order to reduce its operating costs and increase its efficiency.

Analysis N°2

Likewise, Gazprom regularly puts in place strategic memorandums with major oil and gas groups and even with railway companies, which allow it to accelerate its presence and increase its sources of income.

Analysis N°3

Gazprom's gas investment program and all of its production projects should also be closely monitored, which will also help it increase its sources of profit and become more competitive.

Analysis N°4

Of course, government regulations must also be taken into account here, which often leads to unfavourable pricing policies and can lead to losses for the group or thwart its strategic growth plans.

Analysis N°5

The weather conditions in the Siberian region in which the group carries out a large part of its activities should also be monitored due to the possibility of causing production or transport problems and therefore increasing operational costs.

Analysis N°6

Finally, you will also have to follow the oil and natural gas market with interest and the fluctuations in the prices of these two raw materials which may favour or disadvantage the activities of Gazprom.

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General presentation of Gazprom

To go further in your knowledge of Gazprom, check out the company and the details of its activities as well as its main sources of income.

The Gazprom Group is a Russian company operating in the oil and natural gas sector. More specifically, Gazprom is currently positioned as a leader in the exploration, production and sale of natural gas throughout the world.

To better understand the group's activities, they can be divided into several divisions according to the percentage of turnover they generate as so:

  • Gazprom's natural gas distribution activities generate most of the group's income with 49.6% of turnover.
  • Next come the sale of hydrocarbons and refined petroleum products which generate 27.6% of the group's turnover with 70.2 million tonnes sold in 2019.
  • The exploration, production and sale of crude oil and condensed gas activities represent 9.8% of Gazprom's turnover.
  • Then we find the production and sale of electricity and heat with 6.8% of turnover.
  • The storage and transport of natural gas here represents 2.8% of the company's turnover.
  • Finally, the remainder of the group's turnover, i.e. 3.4%, comes from ancillary activities.

Currently, the Gazprom group employs nearly 473,800 people around the world.

Analysis before buying or selling Gazprom shares
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The major competitors of Gazprom

After discovering the activities of the Gazprom group, learn more about its sector of activity with a presentation of its main competitors on the market:

Rosneft

This Company is a Russian state-owned company that specializes in the extraction, processing and distribution of petroleum. It is the second largest oil producer in Russia and its headquarters are based in Moscow. This company is of course also listed on the Russian market and its market capitalization is several tens of billions of dollars.

Tatneft

This other Russian company is currently one of the country's most important oil explorers and extractors. It is a vertically integrated oil company, which means that it carries out the activities of production, refining, petrochemicals and distribution of fuels.

Surgutneftgas

Finally, the third major Russian player to watch as part of your analysis of Gazprom's competition is Surgutneftgas, which specializes in the production of oil and natural gas. This company has been in existence since 1993 following the takeover by several entrepreneurs of several gas and oil companies which belonged to the State and responsible for the exploitation of raw materials in Western Siberia.


The major partners of Gazprom

After having toured Gazprom's main competitors, check out some of its allies with two tangible examples of strategic partnerships that this group has set up in the past.

OMV

In 2017, Gazprom established a strategic partnership with the Austrian oil company OMV. The two groups signed, during the International Economic Forum in Saint Petersburg, a memorandum of understanding aimed at coordinating the gas transport operations necessary to supply Central and Southern Europe. Keep to mind that OMV is Gazprom's main partner in Austria. In addition, the two groups have also signed an agreement in the liquefied natural gas or LNG sector which has enabled them to carry out joint projects for a production terminal on the Black Sea coast.

Total 

Another interesting strategic partnership was signed in 2010 between Gazprom and Total. It was then an agreement to sell a 20% stake in the Ipati and Aquio licenses in Bolivia. Total then acquired 60% of this stake, Gazprom 20% and Tecpetrol 20% as well. In fact, Total discovered in 2004 a gas field in Incahuasi on the Ipati permit. The drilling of well X-1001 on the permit made this discovery exploitable. The permits are located 200 km from the city of Santa Cruz, in the piedmont area of the Andes Cordillera. It's also important to mention that, in 2008, the two companies had signed a cooperation agreement with Yacimentos Petroliferos Fiscales Bolivianos in order to negotiate the exploration conditions of the Azero permit.

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Positive factors for Gazprom shares
The factors in favour of a rise in the Gazprom share price:

In order to know how Gazprom Group is likely to accelerate its growth in the coming years or how it can cope with any difficulties it may encounter, it is necessary to be familiar with its main advantages and disadvantages. We propose that you discover them here in detail:
Let's start by looking at the advantages that the Gazprom group has today, which are summarised below:

  • First of all, the group enjoys a leading position in the natural gas segment worldwide due to the large gas and hydrocarbon reserves in Russia. This leadership gives it a significant growth platform.
  • Another undeniable strength of the group is its gas transport network, the UGSS, which is particularly strong and is currently the largest transport system in the world. This gives it direct control over its transport activities and support for trade.
  • The group's strengths also include its research and development initiatives in helium extraction technologies under field conditions in Eastern Siberia and the Far East, distributed compression technologies for increasing the operational efficiency of fields in their closing stage, the use of gas as a fuel, the harmonisation of national gas industry norms and standards which help it to strengthen its competitive edge and improve its technological progress.
  • Similarly, the Gazprom Group benefits from its many wide-ranging strategic partnerships, including one with the GDF-Suez Group in the comprehensive electrometric corrosion inspection of 5 km of underground gas pipeline and with BASF/Wintershall Holdings in the BIOROS bioremediation testing for the treatment of environmental areas contaminated by polluting hydrocarbons. These alliances allow it to maintain a technological advantage and help its growth.
  • Gazprom also has the advantage of having vertically integrated operations that are associated with its operational infrastructure and that drive its business with a higher level of profit.
  • Finally, the group also gains notoriety through its sponsorship of sports teams and events which gives it greater visibility.
Negative factors for Gazprom shares
The factors in favour of a drop in the Gazprom share price:

Let us now turn to a summary of the various weaknesses from which the Gazprom group may suffer today in relation to its competitors:

  • Firstly, the maturing gas fields in Western Siberia are seeing their production decline over time, which may have a negative impact on natural gas production in the coming years, including leaks and other problems that could impact its finances and revenues.
  • Government regulations may also lead to unfavourable pricing policies and may therefore result in losses for the company by hampering its ability to grow and become profitable.
  • Variations in weather conditions in certain areas of the world, such as the Siberian region where the group conducts most of its operations, can also lead to production and transport problems and thus increase the company's operating costs.
  • Finally, it is also known that the Gazprom Group's activities can have a strong exposure to the energy commodities market. Thus, the various fluctuations in crude oil prices and natural gas prices, caused by different policies and other supply and demand factors, are likely to result, in the more or less long term or in a cyclical manner, in significant losses for this company and its financial results.
The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

When and how was Gazprom created?

It was in 1965 that the Ministry of Gas Industry in Russia was founded, with the aim of taking over the exploration, extraction, transport and distribution of natural gas. In 1989 with the structural economic reforms of the country, the ministry was transformed into a state group called Gazprom which then became a state-owned company in 1993. It was Viktor Tchernomyrdin, the future head of the Russian government, who headed the group until 1992.

Who are the different subsidiaries owned and operated by Gazprom?

To carry out its various activities around the world, the Gazprom group can count on its various subsidiaries, including the companies Gazprom Neft, Gazprombank, Gazprom-Media, Gazprom Export, Mosenergo as well as a hundred other subsidiaries held all over the world.

How can I study Gazprom share charts?

The first thing to do to properly study Gazprom share charts is to choose real-time charts that can be personalized and on which you can display different technical indicators simultaneously. It is also always important to compare the technical signals obtained with the signals of the fundamental analysis before buying or selling Gazprom stock

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