Gazprom: penalty kick - FT.com Things are getting very heated between Gazprom and the European Commission. The EU is preparing to make a formal charge against the Russian gas export monopoly that it has abused its position in central and eastern Europe. That could lead to a fine equivalent to 10 per cent of Gazprom's annual revenue, which was Rbs5tn, or $156bn, in 2012. It is another call on the finances of a company weighed down by existing commitments. And it could put paid to the prospect of a higher dividend. Gazprom's gas exports were up 13.5 per cent year on year in August; exports to Europe are likely to be up 9 per cent altogether this year, HSBC estimates. But its profit is being devoured by higher depreciation charges (up 37 per cent year on year in the first quarter of 2013), while capital expenditure on maintenance and new projects is eating cash. Gazprom spent $53bn on capex in 2011; it may spend $40bn this year. Investors had been hoping for a lift to the dividend to reap the benefits, such as they might be, of all this spending. Gazprom's payout ratio has climbed steadily to 25 per cent, but it seems stuck there. And the prospect of a hefty penalty from Brussels, while maintaining its other financial commitments, will not help. Europe is unlikely to throw the book at Gazprom. The maximum penalty would be about $15bn - a fine even JPMorgan's Jamie Dimon would have to take seriously. But the EU tends not to be maximalist. Its biggest penalty to date in this sort of case is €1bn levied on Intel in 2009 - a small part of what the chipmaker could have faced. Do not be fooled by Gazprom's apparent financial heft: it is a bit of an illusion. The company is too profligate for a fine of any scale not to affect the bottom line. The recovery in Gazprom's share price seen since June has stalled; the shares are up a third this year but the rally has had little momentum. That is hardly surprising when its investment case is so uncertain.