Russia’s Gas Disinformation Game

Disinformation operations, as every former KGB operative knows, can be an invaluable tool in winning a war. “Deza,” as it is called by the old boys who once worked on Dzerzhinsky Square in Moscow, is an art meant to be used carefully by professionals; otherwise it can backfire and damage its disseminators.

It was therefore not a surprise that throughout the Russian-Ukrainian “gas war” of January 2009, Russian Prime Minister Vladimir Putin, a former KGB officer, along with key Gazprom officials, many of whom are suspected of having KGB backgrounds, resorted to disinformation on an unprecedented scale. What is surprising, however, is how incompetent their efforts turned out to be.

Disinformation operation one—Ukraine buys Russian gas. Gazprom and Putin have pushed the fiction that Ukraine should pay “European prices” for its purchases of Russian gas. Ukraine, however, buys little if any Russian gas—its main supplier under the January 2006 contract is Turkmenistan with some Kazakh and Uzbek gas thrown in. Russia’s Gazprom buys this gas from the Central Asians for a much lower price than Russian gas sells for, and then resells it to RosUkrEnergo (RUE), a Swiss-based intermediary of which Gazprom owns 50 percent (the other 50 percent is owned by 2 private Ukrainian businessmen). In 2008 RUE resold this gas to a joint RUE-Naftohaz Ukrayina enterprise, UkrGaz-Energo, which was the Ukrainian domestic distributor for Central Asian gas in Ukraine.

The alleged 2009 wellhead price for Turkmen gas is $340 for 1,000 cubic meters (tcm). With transit costs added on, the price for Turkmen gas on the Ukrainian-Russian border was announced to be $380 and not the $450 Putin has demanded that Ukraine pay. According to reliable sources, however, German companies will pay an average of $280 per tcm for Russian gas in 2009. Why such a great price differential?

Disinformation operation two—Ukraine turned off the valves on the pipeline preventing deliveries of Russian gas to EU countries. Gazprom deputy CEO Alexander Medvedev, who is also a member of the coordinating committee of RUE and considered by some to have been a KGB agent in Vienna in the 1980s, told a press conference in London on January 6 that it was Ukraine that had closed down the transit of gas to Europe and that Russia played no role whatsoever in this (Vedomosti, January 6).

The following day Oleh Dubyna, the head of Naftohaz, called Medvedev’s statement “absurd” and pointed out that all the gas cutoff valves were located on the Russian side of the border. Dubyna produced maps of the pipeline system, which clearly proved his assertion (UNIAN press agency January 8).

Then, to make matters worse for Gazprom and Putin’s disinformation operation, the world press reported on January 8 that “Russia said on Thursday it would restore gas supplies to Europe through Ukraine, once international monitors were in place…” (Ukrayinska Pravda, January 8). If Gazprom’s original claim that Ukraine had shut down the flow of gas to Europe were true, how could Russia now be ready to resume shipments of gas that it claimed not to have shut down in the first place? Would Russian troops move into Ukrainian territory, occupy the pipelines in that country, and open the nonexistent valves?

Disinformation operation three—Corrupt Ukrainian politicians are attempting to keep RosUkrEnergo in business. On January 8 Putin told a press conference in Moscow that high-level Ukrainian officials were intent on keeping RUE in business in order to steal profits from the company to fund their forthcoming presidential election campaign; and this, according to Putin, played a role in the gas conflict with Russia (Ukrayinska Pravda, January 8).

Anyone familiar with the history of RUE will recall that it was Putin, along with then-Ukrainian president Leonid Kuchma, who oversaw and approved the creation of RUE at a meeting in Yalta in July 2004. Both men knew the ownership structure of the company and presumably had been briefed on the role, if any, that Russian organized crime played in the company. It is also common knowledge that in January 2006, during the first blockade of Russian gas to Europe, the Russian side (and Putin personally) insisted that RUE become the intermediary in the Central Asian gas trade to Ukraine.

It is also on record that Prime Minister Yulia Tymoshenko has been calling for the ouster of RUE from the Ukrainian gas market since late 2004 and her greatest opponents have been Alexander Medvedev and Vladimir Putin.

Furthermore, at a press conference on January 8, Putin stated, “From our side, 50 percent of RUE belongs to Gazprom, and the Ukrainian side belongs to certain persons we do not know, except that we were shown Mr. Firtash once. I never met with him” (Ukrayinska Pravda, January 8).

How could Gazprom, a Russian state-owned company listed on the London Exchange and closely monitored by Putin and the Russian government, enter into an agreement to create a company, 50 percent of which was owned by persons it claims not to know? Was due diligence conducted by Gazprom to learn more about its mysterious partners? Did Dmitry Medvedev, a lawyer and the chairman of the board of Gazprom at the time, know this? If not, he was negligent in his duties. If, on the other hand, the now-president of Russia knew and remained silent, he, along with Putin, was part of a criminal conspiracy to defraud the Russian people of services and tax revenues into the Russian budget (www.gazpromukrainefacts.com).