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Exclusive: Gazprom to cut hundreds of traders as Kremlin retreats from West

Reuters  |  MOSCOW 

By Christian Lowe

(Reuters) - Russian will cut hundreds of jobs at its overseas trading and export offices, including Britain, and move them to St Petersburg, according to two sources familiar with the plan, which comes at a time of rising tensions with the West.

One of the sources said the decision reflected a broader trend of Russian state firms retreating from the West as part of Vladimir Putin's drive to repatriate capital to reduce exposure to sanctions and also shore up the domestic economy.

"In Russia, this story can be sold as a job creation exercise on home turf. This is useful, especially ahead of the presidential election," said the source, referring to the vote on Sunday that Putin is widely expected to win.

The reorganisation comes as relations between and Britain, where has the largest trading office by far, have hit a new low after said was to blame for the attempted murder a former Russian double agent in an English city.

However the jobs decision was taken earlier this year, long before the scandal erupted, according to the sources who declined to be named due to the sensitivity of the matter.

Gazprom, which has its headquarters in St Petersburg, said it was too early to comment on numbers and moves. The company last month that it planned to reorganise its overseas trading and export operations but gave no details.

"This work is aimed at strengthening the company's position abroad," a said.

Gazprom's overseas trading and exports divisions employ around 2,000 people, with the bulk of them - around 1,000 - in It also has offices in locations including Paris, Houston, and cities in Not all employees are traders, as they also include and logistics specialists.

The reorganisation will see the number of people more than halved, while about the same number of people will be hired in from where many trading operations will be executed, according to one of the sources who did not give more specific details about where the cuts would happen.

Since setting up Gazprom's trading offices in in 2005, has hired dozens of top traders from rival companies such as Total and


Russia's annexation of Crimea from in 2014 triggered a series of U.S. and EU sanctions against the Kremlin and its companies, and ties have worsened further after was accused of meddling in the 2016 U.S.

Russian state banks such as VTB and companies such as have since scaled back their presence in the West, while some of Putin's closest allies such as have sold their assets in the West and repatriated capital to

The West has repeatedly accused Putin of using as a economic and political weapon after the cut supplies to Ukraine, thus disrupting deliveries to denies that charge.

gets a third of its gas from Russia, and has spent 15 years on building a mighty trading division to help it further boost that share.

The plan to move Gazprom's trading headquarters from to was first considered by the company's management in 2015 but it was put on ice due to concerns about an exodus of people and the difficulties of raising credit for a capital-intensive operation, according to sources.

The last time Gazprom's marketing and trading division published its results, for 2014, it said it made a net income of $613 million and a return on equity of 41 percent while staff costs stood at $162 million. The unit has not published results since.

(Additional reporting by Olesya Astakhova; Editing by and Pravin Char)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, March 14 2018. 19:16 IST