Kremlin set to receive $10 billion from state-run gas company Gazprom after it saw record profits this year

• Russian state-run giant Gazprom is set to give $10 billion in dividends to the Kremlin.
• The Kremlin owns half of Gazprom, which saw a record net profit for the first half of 2022.

Gazprom, the state-run Russian gas giant, is set to disburse $10 billion in dividends to the Kremlin after the energy firm reported a record net profit for the year's first half.

With the Kremlin owning 50.2% of Gazprom, it stands to receive around half of an enormous investor payout worth $20 billion, or 1.21 trillion rubles, that the board proposed at 51.03 rubles per ordinary share, The Guardian first reported.

Shareholders are due to vote on whether to approve the dividends at an extraordinary general meeting on September 30.

Gazprom on Tuesday reported net earnings of $41.75 billion, or 2.5 trillion rubles, from the start of 2022, up from 968 billion rubles in the first half of 2021, Insider's Brian Evans reported.

The gas giant's shares dropped more than 29% in June when it announced that it wouldn't pay dividends for the first time since 1998. That decision was based on Gazprom's 2021 results.

After its earnings announcement on Wednesday, Gazprom's shares climbed 24.95%, according to Bloomberg.

If the payout goes through, it would be a blow to the US and Europe's sweeping sanctions on the Russian economy, which the Biden administration said would deprive Russian leader Vladimir Putin of the funds he needs to continue the Ukraine invasion.

Gazprom's profit comes as Europe struggles to mitigate an energy crisis compounded by extreme heatwaves over the summer. Russian natural gas accounted for around 40% of Europe's gas power needs before the war in Ukraine.

Europe has largely avoided banning gas imports from Russia but its member states have been hard-pressed to look for energy alternatives in coal, wind, and solar power.

A key part of Gazprom's energy flow to Europe comes through the Nord Stream 1 pipeline, which Putin has been accused of trying to "weaponize" by repeatedly cutting off the gas supply. Gazprom has cited technical difficulties and maintenance shutdowns as reasons for the interruptions.