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The Pride of Russia, Tanking Gazprom Seeks Bailout

A symbol of Moscow's resurgence a year ago, the natural gas giant is foundering

By Clay Dillow, Newser Staff

Posted Dec 30, 2008 9:02 AM CST

(Newser) – Just a year ago, Russian natural gas titan Gazprom was burning through global competition on its way to becoming the world's largest corporation. Now the state-owned darling of investors worldwide is deep in debt and flirting with a government bailout. A symbol of Russia’s resurgence as a global economic power, the company has tumbled from third to 35th place in global market cap rankings, shedding 76% of its value along the way, the New York Times reports.

As the world’s largest natural gas supplier, Russia enjoyed the lift provided by surging energy prices. But aggressive re-nationalization by former-president Vladimir Putin led Gazprom to pile up debt totaling $49.5 billion, nearly matching the combined amount coming due for Brazil, India, and China in 2009. The 76% drop in value since January compares to an 18% decline at ExxonMobil.

[Images (2)]

[Quotes (1)]

Aggressive re-nationalization by Russia's former president Vladimir Putin led to Gazprom's use as a vehicle to acquire other private properties for the state, an action which has led to massive debts. (AP Photo/ Ivan Sekretarev)

A worker stands near a line of pipe-laying cranes with gas pipes prior to a connection ceremony for a new pipeline between Ukha and Bovanenkovo in Ukhta in Northern Russia. (AP Photo/Misha Japaridze)

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I can describe the Russian economy as water in a sieve. When the input of water is greater than the output, the sieve is full . . . But when there is a drop in the water supply, the sieve is again empty very quickly.
- Yulia L. Latynina, radio commentator

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The Pride of Russia, Tanking Gazprom Seeks Bailout