Russia’s Gazprom is undergoing a transformation from a company that tried to play the role of Europe’s most important gas supplier into the Kremlin’s hard-knuckle foreign policy tool, which it has always been. It is not known what it will be used for in the face of speculation about the possible fall of Vladimir Putin – writes Wojciech Jakóbik, editor-in-chief at BiznesAlert.pl.
The end of Gazprom’s PR
The change in the chair of Gazprom Export from Elena Burmistrova to Dmitry Khandoga in the role of acting president sends a message that the Russian company is experiencing problems. Gazprom Export is responsible for gas supplies to external markets, including the European Union. Before Russia invaded Ukraine, the company took part in the war preparations by limiting gas supply on the European market. One element of this strategy was quitting trading gas on the SPIMEX internet platform that was introduced by Burmistrova when Gazprom actually wanted to fight for clients. After the invasion, Gazprom began to lose the market as its customers decided to diversify, which included Germany hopping eagerly on the LNG train. They also backed out due to the Kremlin’s foreign policy, symbolized by the dispute over payments in rubles, which ended NS1 deliveries long before the September 2022 sabotage. Most likely, Burmistrova took the blame for the difficult decisions that were in line with the Kremlin’s expectations, but went against Gazprom as a company, so now she is free to go. Gazprom’s exports to the European Union and Turkey fell from 200 to 100 billion cubic meters a year. The company’s share of the European market fell from 40 percent in 2021 to about 5 percent in 2022, and could fall to zero in 2023 without a quick alternative in Asia. Gazprom had to reduce gas production from 500 to 400 billion cubic meters a year because it had nothing to do with the surplus after it lost Europe. Given the wave of suicides in Gazprom and the Russian energy sector, a soft landing as Gazprombank’s vice president is not a bad prospect for Burmistrova.
The Militarization Of Gazprom
The new chairman of Gazprom Export has not been elected yet. Dmitry Khandoga is in charge, and Gazprom vice president Vitaly Markelov is in charge of gas market operations. The lack of a new candidate in Gazprom Export may signal deeper problems that can be analyzed only by the best Kremlinologists. Russia’s energy sector is shutting its door to the West, also by making its stats confidential. It is dropping the PR image of a sponsor of sporting events in Germany and a friend of climate policy with Nord Stream 2 gas as a transitional fuel, because such an approach no longer works. It is transforming to a blunt weapon of the Kremlin’ foreign policy, which it has actually always been, hiding behind lobbying. Gazprom, in a new guise, is starting to create an army of mercenaries, and the German Bild suggests that it may be used suppress protests in Russia, which is in trouble due to Western sanctions for the attack on Ukraine. The St. Petersburg-based company follows in the footsteps of Rosneft and other state-owned companies in Russia. Russian-speaking commentators, whose propaganda is regurgitated by Russia’s pawns in the West argue that Russia’s energy sector needs to arm itself in case of further attacks on critical infrastructure such as the sabotage of Nord Stream 1 and 2, but the private armies of Gazprom and other companies can help quell unrest stirred by internal movements that are waking up in view of Russia’s defeats in Ukraine. They can also be used for internal disputes, like the famous Wagner group associated with the oligarch Sergei Prigozhin. Gazprom may be the next pawn on the board ahead of Vladimir Putin’s expected departure.
The end of an era, the end of Putin?
The era of Gazprom fighting for the hearts of Europeans ended symbolically when it began producing propaganda ads about Europeans freezing and eating pet hamsters due to the energy crisis. The militarization of this company and the departure of Elena Burmistrova, who may not have fit into the new reality, shows what Gazprom has always been, that is, a tool of Kremlin policy, which is increasingly evident in the face of growing speculation about changes in the local power system.