Watching GovernmentChanges at Gazprom

Aug. 9, 1999
Viktor Chernomyrdin is probably more famous in Russia as the former head of Gazprom than for his term as prime minister.

Viktor Chernomyrdin is probably more famous in Russia as the former head of Gazprom than for his term as prime minister.

During his tenure in government, he displayed enough partiality toward Gazprom that he was accused of using his influence to enrich the natural gas monopoly.

Political wags joked that the political party Chernomyrdin launched, Our Home is Russia, should have been named Our Home is Gazprom.

After Chernomyrdin was fired from his position as prime minister in March of 1998, it was widely expected that he would quickly return to the giant company.

Surprisingly, he didn`t. Instead, he considered a run for the Duma, acted as the Russian government`s special envoy to Kosovo, and represented Russia in negotiations with the International Monetary Fund.

Last February, the government proposed Chernomyrdin be named one of its representatives on Gazprom`s board, and on June 30, he was elected not only to the board but also chairman again.

Launching pad

Many Russians now think Chernomyrdin is using his old/new post to prepare for a long-anticipated run for the presidency next year.

Chernomyrdin has fueled that speculation recently by making some unusual and controversial statements.

On July 2, he urged the Russian government to leave Gazprom alone and let it run itself. The government owns 38% of the monopoly, and Gazprom is Russia`s largest source of foreign-currency revenues.

Government officials have said repeatedly over the past year that they want to increase their oversight of Gazprom, not reduce it.

Chernomyrdin`s demand for freedom could be interpreted as both a declaration of independence for Gazprom and a declaration that he no longer is the subordinate of President Boris Yeltsin.

The Gazprom chairman also declared Russia is using too much natural gas. He said gas provides more than 50% of the nation`s energy, but because of finite reserves, gas consumption should be cut to about 30% of the total.

Chernomyrdin can only help his presidential bid by speaking his mind.

Generally, the Russian public sees Chernomyrdin as a gray bureaucrat, devoid of any charisma and more of a political follower than a leader.

Power struggle

Gazprom has scheduled a special directors meeting Aug. 26 to vote on the government`s request that it get an extra representative on the board.

The government has argued that its 38% ownership justifies it appointing five, rather than the current four, directors to the 11-man board.

Some observers think a power grab might be under way, because Moscow has proposed 11 candidates for the five seats.

Of course, the government would win control of Gazprom if it is able to seat six allies on the board. And the government has been pushing for as much control over Gazprom as it can get, including day-to-day management.

Fuel and Energy Minister Viktor Kalyuzhny has been a critic of Gazprom`s CEO Rem Vyakhirev. Kalyuzhny is not a candidate for the board, although his deputy, Pyotr Nidzelsky, is expected to be elected.