The Imperial Strikes Back

There’s a new test for Russia’s famous axiom, “What Gazprom wants, Gazprom gets.” The answer from the embattled LSE-listed oil company Imperial Energy: not so fast. On Friday the company rejected a bid from Gazprombank to acquire a 25% stake, which caused their stock price to dip slighting in trading. Earlier this month it was revealed that this banking arm of the Russian government was behind this “mystery bid” for the company, which was generally seen as the Kremlin’s peace offering to make all those pesky regulatory troubles go away (this energy firm is only just the latest of many private companies to come under the wrath of Rosprirodnazor’s Oleg Mitvol over its reserves numbers). There seems to be very little effort to hide the fact that Imperial Energy is undergoing a textbook partial expropriation by the Russian state. Obviously the regulatory authorities are inventing problems that can disappear as soon as the company in question sells a big stake to the state. Some analysts put it quite transparently: “a strategic partnership with Gazprombank would ‘diminish the risks stemming from the company’s long-lasting conflict’ with the Natural Resources Ministry.” It’s simply astonishing how so many companies allow and encourage this sort of conduct from the state, convinced that there is no point in fighting back. For the moment, the executives over at Imperial seem to have parried a blow from Gazprom, which will surely ruffle some feathers among the siloviki. However, word is that they will eventually find another area of cooperation with Gazprom and deliver a few concessions in order to bribe off the attacks of Mitvol. Still, it seems to be a far superior reaction than that of Royal Dutch Shell and BP, who have fared far worse in their efforts to placate their bullies.