The Gazoviki in Germany

Below is an excerpt of exclusive translation of a long investigative article from German magazine Stern by journalist Hans-Martin Tillack. The article may be somewhat over-dramatized (characterizing Gazprom’s acquisitions as an “invasion” really misses the point), but nevertheless contains excellent and detailed information on Gazprom’s diverse shareholdings in Germany. The original German version can be viewed here, and a seven-page PDF of the complete article can be downloaded here. For those interested, a February interview I did with Stern can be found here.

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A tale of gazoviki, money and greed Dubious methods and shady partners The managers of the Gazprom corporation are casting a network of front companies over Europe – but in whose interests? By Hans-Martin Tillack, Stern Magazine, Sept. 13, 2007, page 192 This is the story of an invasion. A massive campaign, planned well in advance. The General Staff is located far away in the east, in Moscow, the capital of Russia. The target area is Germany – and the rest of Western Europe. The invasion is about gas. But, even more, it is about large amounts of money. Large amounts of money for very few people. People who want above all to remain anonymous. This is the story of Gazprom, the Russian gas giant. With a market value of 180 billion euros – more than double that of Siemens – Gazprom is the biggest company in Europe and, at the same time, one of the least transparent. Indeed, Gazprom seems to have elevated concealment to the rank of a business principle. For former German Chancellor Gerhard Schröder (SPD) it was a “point of honor” to accept 250,000 euros a year for sitting on the shareholders’ committee of Gazprom’s subsidiary Nord Stream. According to Schröder it was in the interests “of our country and of Europe.” But the story of this invasion is teeming with ex-Stasi officers and shady figures. It is a story of letterbox companies that do not even have a letterbox, of companies nestled within companies. The overriding impression? That they are concealing flows of funds. In Russia, they call Gazprom’s managers gazoviki. Many of them come from the KGB, or from other friends of the Russian President Vladimir Putin. In their own country, they sustain losses due to state-controlled prices for gas. So the gazoviki have to turn to the European end consumer. Those in the know call this “moving downstream.” According to energy expert Andreas Heinrich, “you can make bigger profits downstream.” The invaders have already made excellent progress. Gazprom Gas has a market share of more than 40 percent, which could rise to 60 percent in the coming years. Other countries – such as Finland – are already 100-percent dependent on gas supplies by Gazprom. The gazoviki have established their first bridgehead on Berlin’s Markgrafenstrasse. Here resides Gazprom’s German subsidiary Gazprom Germania. In Germany, Eon and BASF are Gazprom’s two most important partners. Together with Gazprom they are constructing a pipeline through the Baltic Sea at a cost of six billion euros, with planned completion in 2010. Under former German Democratic Republic gas functionary Hans-Joachim Gornig, Gazprom Germania has built up for its Moscow bosses a complex network of shareholdings in companies that stretch right across Europe. Gazprom Germania also invests enormous sums in public relations – up to 125 million euros in the case of the German Bundesliga team Schalke 04. And when rumors appear about share acquisitions at RWE or Ruhrgas, the alarm bells start ringing in Germany. And with good reason. “It is very difficult to find a company that is not on our watch list,” says Gazprom Vice President Alexander Medvedyev.

Continue reading the full article here.

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2 Comments

  1. Posted January 21, 2008 at 5:09 pm | Permalink

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    Mr. Amsterdam,I am an editor of an internet energy portal, Global Energy Matrix. I recently posted an article: “The Siloviki: Putin and Russia’s Energy (and Mining) Czars”. In follow up for a possible story on Shtokman Development AG, I came across your blog on the “gazoviki” connections and linked it to the “web” of characters.Best regards,John S. Taylorwww.energygem.comea7xs3