Now the European Union is putting pressure on Gazprom to “decouple” its pipeline business from its gas-supply business. The Kremlin is unlikely ever to go for that idea.
The E.U. has also opened an antitrust investigation into Gazprom’s business dealings in Eastern Europe, accusing it of price fixing. The Kremlin, by its defensive pronouncements, clearly takes the threat against Gazprom seriously. A new presidential decree forbids Gazprom from reaching a settlement without getting the Kremlin’s approval.
At the same time, though, Putin is shaking up the gas business at home. A beneficiary has been a domestic competitor called Novatek, whose two principal owners, Leonid Mikhelson and Gennady Timchenko, recently snapped up a Gazprombank and Gazfond subsidiary, which are connected to Gazprom through cross-ownership, known as Sibur for way under market value. Novatek may, reportedly, get permission to start exporting gas, as well, breaking Gazprom’s monopoly.
“The favoritism toward Novatek is pretty striking,” Gaddy said. Timchenko — who knew Putin when they belonged to the same martial arts club in St. Petersburg — owns 23 percent of the company. He is also one of two principal owners of a Cyprus-based company called Gunvor that has become extremely profitable as a middleman in exports of Russian oil, though he has no formal management role. His p
artner is Leonid Mikhelson, who rose to second-richest man in Russia on the Bloomberg billionaire index thanks to the Sibur deal — the index valuing Sibur at its actual value, not what he and Timchenko paid for it.
The government has also announced that it is reversing its policy and once more placing its own people on the Gazprom board. That is unlikely to substantially change the way the board — already a rubber stamp — runs its business. It is probably a sign of “a fight under the rug” between Prime Minister Dmitry Medvedev and Igor Sechin, a close associate of Putin and head of the Rosneft oil company, Krutikhin said.
One thing remains unchanged, no matter who wins that inside struggle, Milov said: “Putin is the central figure who makes the major decisions.”
Is he preparing for Gazprom’s decline? “I would hope they’re thinking about that,” said Greene, at the New Economic School. But it’s difficult to imagine, he said, how you could remove Gazprom from the political and economic system in Russia and still have the system.