Cornucopia
Page 59
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In 2007, Alexei Miller, CEO of Gazprom and close friend of Vladimir Putin, vowed to grow the giant into a one trillion dollar mastodon.
That was never to be, times had changed and Gazprom was in deep trouble. Once rated the world’s third-largest public corporation, valued at more than three hundred and fifty billion dollars, it had sunk to an ignominious 170th place, worth a mere fraction of its previous value.
The question was what had gone wrong? Of the world’s top five thousand company not one had come anywhere near such a staggering reversal of fortune.
For any Kremlin watcher the answer was simple: Gazprom had become an instrument of Putin’s geopolitical agenda. The Kremlin had precipitated the giant into a whole series of money losing, politically motivated, undertakings: the Sochi Winter Games; the conflict with the Ukraine; and a means of pressure to force unwilling partners to conform to his vision of the world.
Gazprom, in spite of its vast oil and gas reserves, had become a symbol of the malaise that had afflicted Russia since Putin’s re-election in 2012. It was a tragedy for Russia, given its vast potential, to once again fall victim of an old fashioned strongman, a leader who was evidently caught in a time warp, dreaming of past imperial glories, as though the vast country he ruled was threatened or needed territorial gains.
Putin’s dangerous adventure in the Ukraine had cost Gazprom dearly. It’s exports to Russia’s populous neighbour came to a full stop in mid-2015, losing the company billions in revenues and putting the fear of God into its rich European customers, sending them scrambling in search of alternate suppliers.
The Kremlin’s much touted replacement deal with Beijing looked more and more like a pyrrhic victory as China’s economy slowed. A costly enterprise in which Gazprom would have to bear the cost of building pipelines as well as extracting, processing and storing the gas.
The agreement was further compromised by gas prices being indexed to the price of oil: one hundred plus dollars a barrel at the time the deal was agreed, double the mid-2015 market price, transforming the face saving deal into a non-starter.
The battle in Ukraine’s eastern regions continued and the toll of death and destruction rose, Fitzwilliams’ belief that life and property meant nothing to the Russian leader hardened into stark reality. He, like many others had long known it, but the lure of profits had too strong. On this occasion, however, there was no escaping the truth as he himself, Michael Edward Fitzwilliams, was directly concerned and a potential pawn on the check board of a thug parading as czar.
As Kremlin backed forces pushed into eastern Ukraine and the rouble headed for seventy to the dollar, S&P, for the first time in a decade, downgraded Russia’s sovereign debt rating to junk status.
Gazprom HQ Moscow
Fitzwilliams, if he needed any further evidence of Putin’s power to meddle, had no further to look than Greece, where in the latest act in the ongoing drama, the Greek leader, Alexis Tsipras, launched a barely veiled threat to Brussels, playing Russia off against the EU.
As a former member of the Communist Youth of Greece, the new leader’s ties to Russia were long-standing. That together with the tenuous link of a shared religion offered numerous possibilities for blackmail, since the Balkans, and more especially Greece’s neighbour, Serbia, had long been the stomping ground of Russian Orthodoxy and interference.
As the pressure grew and new sanctions were announced against Russia, Putin was like a cornered bear, ready to lash out at his taunters. The idea that sanctions would inflect Putin’s aggression in Ukraine had as much hope of succeeding as Fitzwilliams, or others implicated in the conspiracy surrounding the seizure of Tarasov’s InterBank, had of escaping the Kremlin’s long arm if Moscow decided its interests were compromised.