Publication: Monitor Volume: 7 Issue: 159

The removal of Rem Vyakhirev as the head of Gazprom this past June gave rise to hopes that the giant semi-state owned natural gas monopoly would at a minimum be made more transparent and possibly even radically restructured. There are a growing number of signs, however, that the gas giant’s new CEO, Aleksei Miller, is becoming as resistant to reform as his predecessor.

Prime Minister Mikhail Kasyanov announced last month that Gazprom’s production units would be split off from its gas transportation system–a move aimed at increasing “transparency and effectiveness,” and essentially giving other gas producers access to Gazprom’s pipeline system. “Every producer who has gas should be able to put its gas into the pipeline system and have clear, transparent access to the gas transportation system,” he said at the time. The investment community hailed the prime minister’s statements. Eric Kraus, chief strategist at Nikoil Investment Bank, for example, called opening up the gas transmission system and liberalizing pipeline access a “very important” idea and said he was glad it had been adopted (Moscow Times, July 12). A week later, Kasyanov signed off on a program for Russia’s medium-term socioeconomic development that called for splitting Gazprom’s production and transportation units by the end of 2004. According to the business daily Vedomosti, German Gref’s Ministry of Economic Development and Trade has come up with a plan to create a special gas transportation company, which, according to a member of the ministry’s working group on gas sector reform, would establish fair tariffs for gas transportation and thereby put Gazprom and independent gas producers on an equal footing.

Vedomosti, however, reported that while Gazprom agrees with the idea of setting up a separate gas transportation company, it believes that such a company should be owned entirely by Gazprom. As Dmitry Avdeev, an analyst with the Untied Financial Group, told the paper, this means that Gazprom is in essence suggesting that nothing be changed. In the view of Vedomosti, Gazprom’s CEO Aleksei Miller, a long-time associate of President Vladimir Putin’s from St. Petersburg, “is resisting radical changes and wants to keep the pipeline system within the company”–a position exactly like that of his predecessor, Rem Vyakhirev (Vedomosti, August 30).