It’s one way to quiet dissent

Stephen Beard Dec 6, 2006

KAI RYSSDAL: Chances are it’s going to be a long cold winter in Tbilisi. Russia’s state-controlled energy conglomerate, Gazprom, has threatened to cut off natural-gas supplies to the former Soviet republic of Georgia. They did the same thing last year to Ukraine. Some analysts say Gazprom’s just a tool of Russian President Vladimir Putin’s foreign policy. That abundant supplies and rising prices have made Moscow more bold. But Marketplace’s Stephen Beard reports Gazprom has other interests as well.

STEPHEN BEARD: In Moscow last month a senior Gazprom executive called a news conference to announce an exciting new project:

[Sound of Gazprom executive.]

Not a new gas field or a new pipeline. The new project is . . . “TV Strana Panorama,” a weekly TV guide. Not what you’d expect from Exxon-Mobil or BP. But Gazprom watcher Chris Skrebowski of Petroleum Review is not entirely surprised:

CHRIS SKREBOWSKI: They have a couple of television channels. They have a couple of major newspapers. After the state itself, they’re probably the biggest media owner in Russia.

They’re about to get even bigger. Gazprom is now buying Russia’s largest circulation tabloid. Analyst professor Phillip Anson detects the hand of President Putin. The Kremlin has a 51 percent stake in Gazprom. And, he says, when Gazprom buys a paper or a TV station, the bottom line has nothing to do with money.

PHILLIP ANSON: The acquisition of media has been more to do with Gazprom doing the state’s work in the sense of removing pockets of more fundamental criticism.

Take this TV station NTV. In the 1990s it was hard-hitting and independent. It was critical of the war in Chechnya. One year after Putin came to power, Gazprom bought a controlling stake. The criticism has been stifled. Gazprom is clearly more than just an energy company. Much more, says Chris Skrebowski:

SKREBOWSKI: Gazprom is almost a state within a state. It accounts for a huge proportion of Russian GNP. About something like 6 percent of GNP.

It is a leviathan. And a bewildering one. Not only the biggest natural gas company in the world — and Russia’s second-largest media owner — Gazprom is also the country’s single-largest holder of agricultural land. It owns a porcelain factory and several banks. Oh, and its building a Winter Olympics village, too.

SKREBOWSKI: Gazprom by reputation is so vast and so rambling and so complex, that I have heard it seriously stated there is no one man or woman who knows everything that Gazprom owns.

Many Russians regard this huge, ramshackle organization as a national treasure. But now some are becoming more critical. The trouble is that Gazprom hasn’t been investing enough in its core activity. Last winter there were gas cuts. This winter there could be more.

Last month the head of Russia’s national electricity company hinted that there could be power outages, if gas supplies are disrupted again. And this in a country with the world’s biggest gas reserves, which portrays itself as an energy superpower. Professor Anson:

ANSON: People are saying, well, particularly now that there is expected to be a local, domestic shortage of gas supplies next year, you know, why is Gazprom not investing more in its own core activities?

None of this discontent seems likely to trouble Gazprom. The company is too big and too deeply entangled with the Kremlin. Gazprom’s chairman has even been tipped to succeed Putin as President, and Putin to succeed him as head of Gazprom.

At the European Desk in London this is Stephen Beard for Marketplace.

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