Miller's Role in Gazprom Seen; No Reform Expected Until Putin's Second Term
CEP20021113000203 Moscow Izvestiya in Russian 12 Nov 02
[Article by Aleksey Makarkin, head of the analytical department of the Center of Political Technologies: "Inventory Taker and Cleaner" -- taken from HTML version of source provided by ISP]
[FBIS Translated Text]
When people talk about the Gazprom reform, they imply first of all the company's division into extracting and transportation components. This will not happen in the immediate future. At least not until the new management of the gas monopolist has finished the process of establishing real control over the company's assets and the authorities have made a political decision to carry out this reform. It seems that Miller and his team will remain "transitional period" people for a long time. At least until the beginning of Vladimir Putin's second presidential term.
Rumors about Aleksey Miller's imminent resignation have been circulating for about one of the one and a half years that he has spent as chairman of the Gazprom Management Board. However, this resignation has never become a fact. And the point is not only that Miller is a protege of Vladimir Putin. An equally important fact is that the present Gazprom Management Board head quite successfully copes with a job assigned to him: the job of "cleaner" and "inventory taker."
During his term, the company's top management was subjected to an unprecedented purge. Almost all the board deputy chairmen and subdivision heads, as well as presidents of several subsidiaries and regional branches were brushed away (for example, the resignation of Viktor Shchugorev, the long-time Astrakhangazprom head, was as important an event for that oblast as Rem Vyakhirev's departure at the federal level).
A special character of the Miller team is a forced impromptu method based on which it was recruited. The appointments were made "on the run." After all, the Gazprom chief never before managed the structures of this level. As a result, the "key" Management Board deputy chairman for finances, Gazeksport head, and Sibur presidents have been changed twice this year, while many positions in the company are occupied by Miller's old friends from St. Petersburg.
Specifically, Chief Accountant Yelena Vasilyeva occupied the same position at AO [joint-stock company] Baltiyskaya Truboprovodnaya Sistema [Baltic Pipeline System], which was managed by Miller. In the same company, Marketing Department Chief Kirill Seleznev used to head a tax group. Corporate Finance Department Chief Andrey Kruglov worked together with Miller at the St. Petersburg City Administration. Asset Management Department Chief Aleksandr Krasnenkov, too, knows Miller well from St. Petersburg days: He was general director of the Astoriya Hotel. Yet, despite their lack of familiarity with the gas sector the Miller management has not yet made any major mistakes.
The "purge" was accompanied by the restoration of the company's control over a group of assets that were separated or in the process of being separated. The most reverberating was the SIBUR case, which involved a criminal investigation against Yakov Goldovskiy and Yevgeniy Koshits, respectively, former president and vice president of the Gazprom's subsidiary. In the end, Gazprom restored its control over the SIBUR central apparatus. It is "pulling back" the latter's components (which were already grabbed by new owners) and initiated the signature of an amicable agreement with SIBUR's creditors (although one of them, Alfa Bank, is against it).
Gazprom has managed to restore its control -- even if not in so spectacular a manner -- over its other subsidiaries, such as Zapsibgazprom, Purgaz, and Severneftegazprom. The fate of these companies sparked a protracted conflict between Gazprom and Itera, one of the most famous "Gazprom-related" structures closely connected with the Vyakhirev management. Finally, the Miller team managed to agree that the controlling stakes in these companies would go to Gazprom but Itera would receive compensation: partially in cash and partially shares (in the companies where Gazprom was a minority shareholder).
One of the most significant issues for Miller was the one of non-core assets, which range from metallurgical enterprises owned by Gazprominvestkholding to the NTV television company and other Media-Most structures taken over by Gazprom at the very end of the Vyakhirev era. To all appearances, they will not be treated in the same way.
There is good reason to believe that the company will retain its controlling stake in NTV at least until the 2004 presidential elections. Political considerations will play a key role here. At the same time, a new major minority shareholder may appear inside the company. After all, increasing investment attractiveness of the media holding company was exactly the goal of a recent deal to buy from Vladimir Gusinskiy his stakes in the companies belonging to Media-Most.
At the same time, the new management of the company has from the very outset maintained fairly good relations with Alisher Usmanov from Gazprominvestkholding, which controls a group of enterprises from the metallurgical sector. At least, there have been no reports on major disagreements between Miller and Usmanov. On the contrary, it is Gazprominvestkholding that, according to mass media, conducted on Gazprom's behalf negotiations with Itera on the aforementioned disputed assets. In other words, the preservation of partnership is at issue here.
Thus, Aleksey Miller has fulfilled his "minimum program": His company, whose integrity was open to question, is on its way to restore control over the "half-separated" assets. However, there are still serious problems with the "maximum program," which concerns effective management of these assets.
A System of Alliances and Prospects
The part played by Miller in Gazprom is "czar's man." This, however, does not mean that he just performs the functions of a high-level executor. The logic of fighting among various Kremlin-related clans makes him look for allies in corporate circles. Hence the rapprochement with Rosneft chief Sergey Bogdanchikov and Tuva Senator Sergey Pugachev, who retains Mezhprombank in the sphere of his influence. With Rosneft, Gazprom is connected by a series of joint projects to develop gas and oil deposits in Yamalo-Nenetsk Autonomous Okrug and on the Barents Sea shelf. Gazprom conducts a dialog with Mezhprombank on the latter's involvement in a whole range of Gazprom programs ranging from a system of payments for gas buyers from the CIS [Commonwealth of Independent States] to the restructuring of credit indebtedness.
It is indicative that neither Bogdanchikov nor Pugachev belong to the so-called "Yeltsin family." On the contrary, they try to become an alternative group that has access to the incumbent president. It is also true, however, that compared to the well-structured "Yeltsin family," representatives of the "alternative" business elite (it is sometimes referred to as "St. Petersburg" even though not all of its members are connected with our northern capital) seem much more disconnected and less capable of effective coordinated actions. But then, the advantage of direct access to the head of state should not be underestimated.
Miller and Reform
Gazprom's political significance is the main barrier hampering its reform. The authorities do not want to touch a company remaining one of the main budget donors and capable of making a considerable contribution to any election campaign -- and not just thanks to its financial resources but also with the help of its extensive network of regional branches. Also significant is Gazprom's international role, although the gas company has been used recently in a more pragmatic manner in this area. As a result, an expensive and risky project to build a gas pipeline running across Belarus and bypassing Ukraine is becoming increasingly uncertain (which boosts the chances of an option to modernize the existing gas pipeline running across Ukrainian territory). It seems that Gazprom's international expansion will not be so active in the immediate future as it was planned under Vyakhirev.
Another problem plaguing Gazprom is its multistage decision-making process, which involves not only its management but also presidential and government structures. It is not surprising that the present Gazprom management prefers to talk about financial indicators and technical condition of the company's facilities rather than reform plans. It is this fact that largely explains why Miller and his team are perceived as "transitional period" people.
Will Miller manage to go beyond his present role as high-level executor? By style, he is not a clear leader but rather a team member. Besides, the general logic of the monocentric system being created by Putin prevents creation of new "appanage princedoms" or "semi-independent fiefdoms" in state departments and structures with state participation. Vyakhirev was not removed only for "Vyakhirev No. 2" to be created -- even if the latter has St. Petersburg roots.
[Description of Source: Moscow Izvestiya in Russian -- One of Russia's most prominent dailies; controlled by Vladimir Potanin although Lukoil owns a minority share.]