Publication: Monitor Volume: 7 Issue: 159

In addition to Gazprom CEO Aleksei Miller’s reported less-than-deep commitment to restructuring Gazprom, there are signs that neither the gas giant’s new management nor the government are committed either to a radical housecleaning within the gas giant’s management, which has been accused of large-scale asset stripping, or to returning missing Gazprom assets. Vedomosti reported earlier this week that Gazprom had failed to regain control over Zapsibgazprom, a Siberian gas field that had been sold off in a series of transactions last year which minority Gazprom shareholders claim were aimed at benefiting members of Gazprom’s old management team (Vedomosti, August 29; New York Times, August 30).

Meanwhile, Russia’s Federal Commission for the Securities Market ruled on August 28 that a 1995 deal by which a company called Stroitransgaz acquired a 4.83-percent stake in Gazprom for a mere US$2.5 million violated no laws or securities regulations. Earlier this year, the commission launched an investigation into this and other suspicious deals between Gazprom and Stroitransgaz, among whose largest shareholders are the offspring of former top Gazprom officials, including Rem Vyakhirev’s daughter Tat’yana and former Prime Minister Viktor Chernomyrdin’s sons, Andrei and Vitaly. The 4.83-percent Gazprom stake that Stroitransgaz acquired for US$2.5 million in 1995 had a market value at the time of at least US$70 million (, August 29). Other companies are suspected of having links with Gazprom’s management and of having cut sweetheart deals with the gas giant, including Itera, the Florida-based trading company that has grown into Russia’s second-largest gas company, thanks to its ownership of assets formerly controlled by Gazprom (see the Monitor, April 2, May 23). In June, President Vladimir Putin accused Gazprom of having misspent “enormous sums” and called on Miller to clean up the company. Miller, however, said he would not go after wrongdoers, that this was a matter for police and prosecutors to do so (Moscow Times, June 20).

In general, it would be neither surprising nor unprecedented if the zeal of the government and Gazprom’s new management to reform the gas giant began to dwindle. In 1997, Boris Nemtsov was appointed a deputy prime minister with a brief to reform and restructure Russia’s natural monopolies, including Gazprom. The International Monetary Fund, which then had greater leverage over Russia than it now does, was pressuring the Yeltsin administration to restructure Gazprom, ostensibly to promote competition and reduce prices. Nemtsov, however, quickly backed off plans to split up the gas giant, and Vyakhirev later said he had reached a “gentlemen’s agreement” with Nemtsov to leave it intact.

At the beginning of August, Aleksei Miller told journalists that it was necessary to maintain Gazprom as a unified system for providing the country with gas. “This system was created over years and must be preserved for future generations,” Miller said (Vedomosti, August 30). Earlier this month, Deputy Prime Minister Viktor Khristenko likewise said that the government wanted Gazprom to remain the country’s monopoly natural gas exporter, saying the company’s position in the world market represented “the consolidated position of the whole country” (Moscow Times, August 7).