Russian television last week showed Alexei Miller, Gazprom’s chief executive, outlining to Vladimir Putin plans to reduce further the gas flow to Ukraine. “All right, I agree. Reduce it from today,” declared Russia’s prime minister. Who is in charge here? Such displays undermine Gazprom’s claims to be commercially driven, reinforcing impressions it is an arm of the Kremlin. Even if Gazprom is 51 per cent state-owned, Mr Putin is not a director (though a deputy premier is chairman, with two other ministers on the board).
With gas exports a sensitive diplomatic issue, high-level political involvement may be inevitable. But Mr Putin’s visible role still highlights a fundamental investment issue. With his administration having restored de facto and de jure state control, does Gazprom serve state or shareholder interests? In fact, shareholders have benefited since Mr Putin installed Mr Miller in 2001 – until Gazprom shares slumped, with the Russian market, last summer. The gas behemoth is less inefficient and ill-managed. It regained control of billions of dollars of reserves lost in questionable deals by previous management. The 2006 removal of restrictions on foreign ownership of the free float helped its value soar from $14bn in 2001 to a $360bn peak last May.
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