Russian gas company Gazprom credits Europe with increase in net sales during the second half of the year. Photo courtesy of Gazprom

MOSCOW, Sept. 1 (UPI) -- Russian energy company Gazprom said the increase in first half sales were driven in large part by its conventional European consumer base.

First half profits for the top gas producer in Russia were up 50 percent year-on-year to $10.5 billion. Revenue rose 1.4 percent and, for the second quarter, earnings were up 29 percent to $4.4 billion.


Gazprom's performance comes during an era when low crude oil prices are hurting corporate profits. Low crude oil prices are in turn driven by stagnation in the global economy. Inflation for European economies in particular is low at around 0.2 percent.

Total natural gas sales for Gazprom increased 1 percent for the first half of the year

"The increase in sales is mainly driven by an increase in gas sales to Europe and other countries," the company said in a statement.

European economies get about 20 percent of their natural gas from Russia, though the majority of that volume runs through a Soviet-era transit network in Ukraine. Debt issues stretching back to at least 2009 and Kiev's pivot toward the European Union after political upheaval in 2014 create risks to European energy security.

European consumers are looking to diversify the energy sector by importing more natural gas from Azerbaijan, and Gazprom is countering with a pivot to Asia, where demand is expected to grow. The status of project implementations, however, means those developments are a few years away.

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Fitch Ratings agency last week issued a BBB- to the Russian energy company, noting it will remain an important natural gas supplier to the European economy, but face pressure on the margins due to geopolitical pressure from Europe on Gazprom, which is accused of holding a monopoly over transit networks and the natural resources they carry.