High-ranking representatives of Russian gas giant Gazprom are hard to pin down for appointments. So when American diplomats finally got the chance, they cut right to the chase: What are the giant energy company's actual business aims?
The American envoys persisted in their questioning. Was it not also the goal of the company to maximize its shareholder value and its market share? Yes, of course. The cable cites the official also adding a third priority to his company's goal: to maximize "control over global energy resources."
A "Gazprom official describes the company as a socialist rent-seeking monopolist," the US envoys reported after a September 2008 meeting in a dispatch cabled to Washington.
'Huge Wealth, but Inefficient'
That's the tenor of a number of secret US Embassy reports about the model Russian company, cables that are filled with critical American assessments about a bureaucracy that has gone overboard and a mafia-like political system in Russia.
But the assessments are particularly pointed when it comes to Gazprom, the company the Russians themselves most like to celebrate and to deploy in their battle to regain lost power in the world. Even as recently as May 2008, Chairmanwas pledging that Gazprom would soon be "the most valuable company in the world," with market capitalization that would reach $1 trillion in the near future. But around one year later, in the midst of the global economic and financial crisis, the company's market capitalization had dropped to $75 billion.
"Gazprom is," the Americans summed up in one cable, "what one would expect of a state-owned monopoly sitting atop huge wealth -- inefficient, politically driven, and corrupt." The American diplomats also painstakingly detailed the sectors in which the energy giant is engaged in and in which falling gas prices are creating problems for it.
Falling Demand for Gas
Their results are sobering. One 2009 cable states: "Far from reaching its ambitions of becoming 'the most valuable company in the world,' Gazprom's fortunes have reversed dramatically this year. The company's market value, production, and sales have all plummeted since the onset of the economic crisis." With dramatically reduced cash-flow, the cable reads, the company has been forced to cut back on capital expenditures and its ambitions, despite political rhetoric to the contrary.
The US diplomats described Gazprom's problems as likely being "longer term," and not just a by-product of the crisis. That's because demand for gas in Germany and Europe is in decline because industrial production there and across Europe has become more efficient.
At the same time, a cable noted, few new markets are opening up in the former Soviet states. Ukraine, for example, indicated it was considering halving its gas purchases. Gazprom Chairman Miller has for some time now been longing to establish a new market in the US but, as a cable states, the country is "looking more and more saturated every day with ever larger estimates for domestic production."
According to the assessment by the US diplomats, Gazprom's greatest problem is the company's own Byzantine structures. "Gazprom is not a competitive global company," the assessment reads, despite sitting on the world's largest gas reserves. "Gazprom is the legacy of the old Soviet Ministry of Gas and still operates much the same way."
A Top Executive with a Love for Hockey
There were many indications that this was the case. The Americans learned from an informant that a senior partner in an international accountancy firm needed two years just to unravel Gazprom's holdings. The empire included one of Russia's largest banks, an important Russian media company and a major construction firm.The Gazprom Cables: 'Not a Competitive Global Company' - SPIEGEL ONLINE - News - International