Gazprom: European companies increasing dividends, buybacks instead of investing in production

MOSCOW. Dec 15 (Interfax) - European energy companies are increasing returns to shareholders through dividends and buybacks instead of investing in fuel-production projects, Kirill Polous, deputy directorate head at Gazprom , said in a statement.

"Ensuring energy security is currently becoming a key global task that requires increased investment in production and transport projects in various countries worldwide, and not just in Russia. We believe that underinvestment in gas production will be an important factor in maintaining high energy prices in the medium term and possibly even in the long term," Polous said at the Gas of Russia 2022 forum.

Polous was surprised to note that despite high prices for gas, the current year has not been marked by a surge in final investment decisions on new LNG projects worldwide. Indeed, the total number of final investment decisions this year is only 33 billion cubic meters versus an annual average of 36 bcm over the past 10 years, Polous noted in his slide presentation.

"The current global energy crisis is caused not only and not so much by the events of 2022, but by the chronic underfinancing of traditional energy. From 2020 to 2022, global investment in exploring and producing hydrocarbons has declined to the lowest levels over the past 15 years. Also surprising is the conduct of foreign companies, primarily European ones, which, amid record profits, have been allocating funds for buybacks and dividend payments, while investments in oil and gas projects remain at a low level," Polous noted.

Polous's presentation summarized and analyzed investments and payments to shareholders by BP, Shell (SPB: RDS.A), Eni, TotalEnergies , and Equinor.