New Eastern Europe: Who Benefits from Gazprom’s Turn to Asia?
At the end of January 2015 there was a leak to Vedomosti, a Russian language business daily, that the presidential center in Russia is planning a reshuffling of personnel in several key energy companies. It would aim to replace the current managers with political officers. Alexander Novak, the current minister of energy of Russia, would also gain a place in Gazprom’s management. Rosneft’s information confirms that the Kremlin is starting to control this sector more directly.
Novak joined the management of Gazprom on February 5th 2015. On March 6th, Rosneft announced a list of candidates for the Board of Directors, which included Alexander Novak. The Kremlin needs its men inside key organisations in order to continue the implementation of political projects that do not fit the increasingly more difficult economic conditions of the Russian Federation, especially at a time of Western sanctions and falling oil prices.
The Chinese minister of foreign affairs, Wang Yi, declared on March 8th that by the end of 2015, his country will sign a contract with Russia for the delivery of around 30 billion cubic metres of gas per year from western Siberia through the Altai pipeline. If signed, this will be the second contract following the one signed in May 2014 for the delivery of around 38 billion cubic meters of gas per year through the Power of Siberia pipeline, which distributes the raw material from the deposits in eastern Siberia. Altai is more important because it diversifies Gazprom’s outlets. Deliveries from western Siberia currently reach Europe, but in the face of decreasing interest in Russian gas from the Old Continent, in the future these deliveries of gas could be partly shifted towards the Middle Kingdom. Both investments are in the preparatory phase, and without access to Western capital (as a result of current sanctions) they will need significant subsidies from the Chinese side in order to be implemented. From Gazprom’s economic point of view, these pipelines only bring losses. For the Kremlin, however, they are tools for implementing a political goal - becoming independent from Europe, and that is why Novak is supposed to watch over the Board of Directors.
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