Publication: Monitor Volume: 5 Issue: 117

Big shake-ups could be in store in the management of Gazprom, Russia’s natural gas monopoly–changes reportedly designed to strengthen the grip of the Kremlin inner circle (or at least one of its factions) over the country’s major financial flows. Yesterday, former Prime Minister Viktor Chernomyrdin, who most recently has served as President Boris Yeltsin’s special representative on the Balkans crisis and who once headed Gazprom, said that he “would not rule out” the possibility that he will be nominated as chairman of Gazprom’s board of directors. His comment came amidst rumors that the Kremlin is unhappy with Gazprom’s current board chairman, Rem Vyakhirev. Vyakhirev, once regarded as a close Chernomyrdin ally, has apparently fallen out of favor with the Kremlin inner circle, popularly known as the “family”–including the tycoon Boris Berezovsky and Tatyana Dyachenko, Yeltsin’s daughter and adviser. Chernomyrdin is reportedly close to Berezovsky.

Several weeks ago, First Deputy Prime Minister Nikolai Aksenenko–widely viewed as the “family’s” representative in the new government–suggested that the government might force Vyakhirev to hand over the state’s 35 percent stake in Gazprom, which Vyakhirev has been managing thanks to a trust agreement reached during Chernomyrdin’s tenure. Vyakhirev is resisting this. He also recently hinted that he would mobilize the company’s remaining shareholders and oppose any changes to the composition of Gazprom’s eleven-man board at the company’s next shareholders meeting, which is set for June 30 (Russian agencies, June 16; Moscow Times, June 17). Vyakhirev, however, has reportedly become increasingly unpopular among Gazprom’s top managers for his “authoritarian” management style.

Vyakhirev also recently suggested that Gazprom might not support Russia is Our Home, the political movement headed by Chernomyrdin, in the parliamentary elections set for December of this year (Komsomolskaya pravda, June 17). Rumors are apparently circulating that Vyakhirev himself plans to run for a parliamentary seat on the ticket of Fatherland (Otechestvo), the electoral bloc headed by Moscow Mayor Yuri Luzhkov (Segodnya, June 17). If true, the “family” would view this as nothing short of treason.

Control of Gazprom has long been coveted by Russia’s powerful financial-political clans, and intrigue and rumors always surround its annual board meeting. In 1997, for example, the groups led by Berezovsky and by Anatoly Chubais (then first deputy prime minister in charge of economic policy) reportedly waged a war over control over the state’s 35 percent stake in the company. Neither side won: Vyakhirev, who has reportedly been playing his own game for several years now, retained control over the stake. Should the “family” succeed in replacing Vyakhirev with Chernomyrdin, it would ensure that Gazprom’s huge revenues would be made available to support pro-Kremlin parties–including Russia is Our Home–in the parliamentary elections. It would also likely mean that the day-to-day running of Russia is Our Home would be handed over to Vladimir Ryzhkov, the young rising political star who heads the movement’s faction in the State Duma. An enhanced role for Ryzhkov would probably improve Russia is our Home’s chances on election day.