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Last Updated: Wednesday, 5 December 2007, 10:03 GMT
Profit falls at Russia's Gazprom
Gazprom headquarters
Warmer weather hit profits at the world's biggest gas firm
Russia's Gazprom saw profits fall 20% in the second quarter of 2007 after operating costs rose and warmer weather meant European consumers used less gas.

Net profit fell to 113bn roubles ($4.62bn; 2.26bn) against a year ago.

In Germany, Italy, Slovakia, France and Poland, revenues at the world's biggest gas firm fell due to lower gas sales.

In Russia and the former Soviet Union, high prices boosted revenues, but these gains were offset by the rising cost of imported gas from Central Asia.

Revenues rose 5% to 532bn roubles, in line with forecasts, but operating expenses jumped 18% to 390bn roubles.

Rising prices

Gazprom has sought to pass on higher costs to its customers, with some success.

Late on Tuesday, Ukraine agreed to pay 38% more for Russian gas next year, following months of negotiations.

Traditionally, Russia supplied countries in the former Soviet Republic with cheaper gas, a practice it wants to end.

Gazprom wants to pass on the rising cost of Turkmen gas - which Ukraine relies on and whose exports Russia controls - to the Ukrainians.

Under a deal signed last week, Gazprom is to pay $130 per 1,000 cubic metres of Turkmen gas in the first half of next year and $150 in the second half, up from $100 in 2007.

Gazprom supplies one quarter of European gas, about 80% of which goes through Ukraine. Previous disputes with Ukraine over the price of gas have seen gas supplies cut for days.

SEE ALSO
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01 Aug 07 |  Business
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19 Jun 07 |  Business

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