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Russia: New Mystery Man Heads Gazprom

Russia's Gazprom has named a new chief executive after months of speculation about reforms at the world's biggest gas company. But the appointment may only add to the mysteries that surround the monopoly and the government's aims. Our correspondent Michael Lelyveld reports.

Boston, 31 May 2001 (RFE/RL) -- The future of Russia's Gazprom may be just as unclear as its past following the appointment of a new chief executive at the giant gas monopoly on 30 May.

Most analysts were surprised by the Gazprom board's decision to name Deputy Energy Minister Alexei Miller to replace Rem Vyakhirev in the top post of the world's largest gas company.

Miller is a virtual unknown who has not appeared on any published lists of potential successors in the past week. On 29 May, the London-based "Financial Times" had tipped Deputy Prime Minister Viktor Khristenko to take over from Vyakhirev, the wily gas chief whose contract runs out today (31 May).

The paper also reported speculation that Sergei Bogdanchikov, head of the Rosneft oil company, would get the job. But in the end, it was Miller, a 39-year-old bureaucrat who started his career in St. Petersburg city government, giving him a possible tie to President Vladimir Putin.

More recently, Miller ran the Baltic Pipeline System, a project to give Russian oil a direct route to Europe while bypassing ports in the Baltic countries.

But until Wednesday, it was even uncertain that Vyakhirev would be asked to step down. Recent reports suggested that the board would extend his term temporarily as a compromise with minority shareholders who have seen him as an obstacle to reforms.

Vyakhirev has been under fire for Gazprom's alleged asset transfers to companies linked to the relatives of executives. This week, Gazprom announced a net profit of over 60 billion rubles ($2.1 billion) last year, according to Russian accounting standards. But its stock market value is only a fraction of what Western oil firms are worth.

The company, which accounts for one-fourth of federal tax payments, is 38 percent owned by the state. The relationship between the government and Gazprom has always been a matter of mystery. As the successor to the old Soviet Gas Ministry, Gazprom serves Russian foreign policy in controlling gas trade and transit with countries of the near abroad.

Yet, the government has acted for years as if reform of the monopoly's murky dealings is a matter beyond its ability to control. This week, many media reports have called Gazprom a "state within a state." But that description suggests that the government only lacks the power to reform Gazprom. The real question may be whether it has the will.

On 30 May, Putin called for more "transparency and efficiency" in Gazprom's operations, a statement that was seen as supporting the move to oust Vyakhirev. But at the same time, a Gazprom spokesman said Vyakhirev could be appointed as company chairman at the next shareholder meeting. The signal raised doubts about the true extent of the change.

In an interview with RFE/RL, Robert Ebel, director of the energy and national security program at the Center for Strategic and International Studies in Washington, said that so far, there are few signs that a new course has been charted.

Ebel said, "The future of Gazprom is no clearer today than it was yesterday." As for lifting the veil of mystery surrounding the company, Ebel said, "This certainly didn't do it. It just adds to it."

Because so little is known about Miller or the motives for his appointment, the mystery continues, Ebel said.

Miller's experience with the Baltic Pipeline System could be a sign that Putin intends to pursue his policy of building bypasses around problem countries even more vigorously than before.

Putin recently appointed Viktor Chernomyrdin, the former prime minister and Gazprom chairman, as Moscow's ambassador to Ukraine. The Russian government has been pressing Poland to cooperate on a new gas export pipeline to Western Europe that would detour around Ukraine. At the same time, Moscow has been trying to gain control over Ukraine's transit pipelines to its European customers.