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Galia, the Czech Republic, Estonia, Latvia, Lithuania, and Finland are completely dependent on Russia for their natural gas supply. In the other seven countries, at least half of their natural gas comes from Russia. Germany, France, Italy and other core EU member states have 28%, 9%, and 38% dependence on Russian natural gas. In the long-term energy cooperation, Gazprom has accounted for a quarter of the total imported natural gas in Europe.
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Gazprom is the world’s largest natural gas producer and once ranked third in the world’s top 500 companies. It is also a giant enterprise integrating economic privilege and political aura in Russia. Surrounded by multiple glory, Gazprom has gained superpower unmatched by any company in the world, and it was once regarded as a double barometer of Russian politics and economy.
The headquarters of Gazprom in Moscow﹀
From Xinhua News Agency
Industry monopolist under resource nationalism
The glory of Gazprom can be traced back to the construction of the Saratov line, the first natural gas pipeline in the Soviet Union. This is because Beria, who is under one person and over 10,000 people, is the person in charge of this natural gas pipeline.
As a high-level Soviet Communist Party responsible for the development of the Soviet atomic bomb and the construction of natural gas pipelines at the same time, Beria has brought unparalleled political advantages to the Soviet natural gas industry and made the outside world believe that the Soviet natural gas industry and the atomic bomb are equally important.
Beria in the limelight﹀
Afterwards, I was overjoyed because I continued to find huge natural gas fields such as Urengoy, Medvegi, Zapoliaro, Yamburg and Povalenko (about one-third of the world's recoverable natural gas reserves). The Soviet Union established the Ministry of Natural Gas (the predecessor of Gazprom) in 1965.
Since then, after the era of Khrushchev, Brezhnev, and Gorbachev, on the eve of the disintegration of the Soviet Union, the entire natural gas industry of the Soviet Union has formed a huge scale that shocked the world under the control of the Ministry of Natural Gas.
Different from other state-owned enterprises after the disintegration of the Soviet Union, the company has established an efficient and flexible modern enterprise management system under the leadership of Chernomyrdin, the then Minister of Natural Gas of the Soviet Union.
Under the promotion of Chernomyrdin, he built the Russian Gas Ministry into a foolish organization like the Eni Group of Italy. As Chernomyrdin said, "Under the constraints of the system, even if a fool is allowed to manage the organization, it can still function well."
Chernomyrdin and Yeltsin, the then President of Russia﹀
Because of this, Russia, which has experienced the wave of "shock therapy" and "privatization", even though most of the country's state-owned enterprises have been broken up due to poor management, Gazprom is still in the hands of the state.
Due to the state holding, oligarchs and Western capitalists have always been helpless to Gazprom. By the year 2000, natural gas exports had become Russia's most important means of increasing national income. After the vigorous state-owned wealth splitting frenzy at the end of the last century, the people have also realized the importance of state-owned resource-based enterprises to the national economy.
In addition, after President Putin took office, his tough tactics against economic oligarchs boosted the Russian folk resource nationalist forces. Russia's natural gas sector has become the most protected industry in the country's economy because of its strategic position and practical significance. It has also been established as a model for the nationalization of Russian resource enterprises after Putin succeeded.
Putin inspects Gazprom ﹀
As a benchmark company, unlike other state-owned companies, Gazprom is the only monopoly company in Russia that is clearly protected by law, and it is also an energy company that has a complete upstream and downstream integrated industry in Russia.
According to the "Russian Federation Natural Gas Export Law" passed in July 2006, Gazprom is the only authorized natural gas transportation and sales company in Russia. This means that as long as the natural gas is produced in Russia, it must be transported and sold through Gazprom's combined gas supply system (UGSS).
If other companies want to export natural gas, they must pay commissions and obtain Gazprom’s permission before they can export through Gazprom.
From Xinhua News Agency
Under the protection of the law, by monopolizing the natural gas industry, Gazprom quickly defeated private energy companies such as Novatek and controlled all natural gas pipelines in Russia and the right to transport the entire natural gas export.
What makes Russia gratifying is that the privileged Gazprom does provide a solid guarantee for Russia's economy. After the "Russian Federation Natural Gas Export Law" was promulgated, Gazprom controlled 65% of Russia's natural gas reserves and 20% of the world's natural gas reserves, produced 8% of Russia's industrial output value, and guaranteed 25% of the state budget.
As of December 31, 2019, Gazprom's oil and gas reserves reached 34.899 trillion cubic meters (8 trillion cubic meters more than Qatar, which ranks third in the world in natural gas reserves), and natural gas condensate reserves were 1.5697 billion tons. The reserves are 2.057 billion tons.
From Xinhua News Agency
In terms of production, in 2019, Gazprom extracted 500.1 billion cubic meters of natural gas and associated gas, 16.7 million tons of condensate gas and 40.8 million tons of oil. Gazprom alone produces 12% of the world's natural gas and expands its natural gas business to more than 50 countries.
Oil and gas distribution in Russia﹀
There is no doubt that in terms of natural gas reserves and production, Gazprom is the world's most well-deserved energy giant.
Not just gas
As a giant star company, Russia's preference for Gazprom is not limited to the energy industry. With the support of the Russian government, in addition to natural gas, Gazprom also owns large-scale power, media, and financial assets. It also operates aviation and railway transportation, wireless communications, and IT. To
The 175,200-kilometer natural gas pipeline is another major asset of Gazprom after the addition of natural gas reserves. The natural gas transmission system that can circle the earth three times enables Gazprom to easily export natural gas to East Asia and Europe.
From Xinhua News Agency
In addition, Gazprom is Russia's largest power operator. It has 82 power stations with a total installed capacity of 3700×104kW, and ranks first among Russian power companies with 17% of the total installed capacity of Russia and a total power generation of 1728×108 kWh.
A hydroelectric power plant in the Murmansk region under Gazprom﹀
Not only is it rich in assets in the basic industry, Gazprom's strength in the media industry is also amazing. Gazprom controls a number of large media companies, operates national television stations such as THT and HTB, and also owns shares in Russia's largest online video website and related advertising and real estate businesses.
Entertainment programs played by THT﹀
From Russian Satellite News Agency
Satellite television broadcasting companies, publishing houses, film production companies, movie theaters, and six radio stations including the Voice of Moscow are all Gazprom's assets in the media industry.
For the all-round development of Gazprom, the financial industry is also an indispensable business territory. Under the active operation of Gazprom, Gazprombank has become Russia's third largest bank with total assets of more than four trillion rubles after 30 years of development. To
According to the Fortune Global 500 statistics, Gazprom's total turnover in 2019 was as high as 118 billion U.S. dollars, while Russia's GDP that year was only 1.69 trillion U.S. dollars. In other words, the economic activities of a Gazprom company accounted for 14.3% of Russia's total.
According to statistics, Gazprom’s tax revenue also occupies an important proportion in Russia and is the single major source of Russian state fiscal revenue. The various taxes and fees paid by Gazprom in cash can account for 16.11% of the total tax revenue of the Russian Federation and local governments, that is, 1 ruble for every 6 rubles of government taxes at all levels in Russia comes from Gazprom.
From Russian Satellite News Agency
Not only domestically, but also Gazprom's overseas expansion has achieved remarkable results. Gazprom has participated in the development of natural gas in India, Iran, Malaysia and other countries, and firmly holds the right to supply natural gas in the world.
It can be said that among the major countries in the world, there is no other company involved in so many key industries like Gazprom and occupying such an important position in the national economy.
Big family and big business﹀
National Pillar and Diplomatic Bargaining Chip
Compared with Gazprom's high profile position in the Russian political arena, trillions of assets and 100 billion in revenue are just the tip of the iceberg of Gazprom's super strength. This is because Gazprom is not only the main source of Russian national tax revenue, but also an important tool in Russia's internal and external affairs and energy politics.
In the Russian political arena, the political rank of the highest corporate leadership is an important reflection of its comprehensive status. Especially after Putin came to power, in order to better fight the domestic "oligarchs", many senior officials of President Putin, including the prime minister and cabinet ministers, began to concurrently serve as the top corporate leaders.
Viktor Alekseyevich Zubkov, Chairman of the Gazprom Board of Directors,
俄罗斯天然气工业股份公司董事会主席Viktor Alekseyevich Zubkov，
Once served as Prime Minister of Russia from 2007 to 2008﹀
Gazprom has always been regarded as the cradle of the growth of national leaders and the training ground for senior government officials. Whether it is the ministry system of the former Soviet Union or the current company system, compared with other Russian state-controlled companies, the top head of Gazprom has always been the highest political rank among all industries and companies in Russia.
This shows that the top managers of Gazprom are directly assigned to the Kremlin and are important executors of the country's high-level internal and diplomatic intentions. They either come from the power center of Russia, or they are likely to hold important positions in the country or government in the future.
In addition to having an unparalleled political aura in Russia's domestic political arena, Gazprom is also an important bargaining chip in Russian diplomatic negotiations. Whether it is natural gas procurement negotiations with Asian buyers such as China, Japan, and South Korea, or sanctions against the Poroshenko government during the "Ukraine crisis," Gazprom has always been on the front line of Russia's foreign affairs.
The economy must serve politics, especially the energy economy, which is closely connected with politics. Under the political situation of Russia, Gazprom has formed a foreign business strategy of "containing Asia, suppressing the CIS, and asking for Europe".
In the Asia-Pacific market, because the fast-growing economies of East Asian countries cannot do without the stable supply of energy, Gazprom takes the natural gas trade as an important bargaining chip, and at the same time allows China, Japan and South Korea to contain each other and form competition.
Especially after the Fukushima nuclear crisis in Japan in 2010, the Japanese market's demand for natural gas increased significantly, causing a temporary imbalance of supply and demand in the East Asian natural gas market.
In order to obtain the best benefits, Gazprom emphasized Japan's demand in the Sino-Russian natural gas negotiations to increase the asking price; on the other hand, it promoted Sino-Russian cooperation in the Japan-Russia natural gas negotiations to suppress Japan's acceptance of the offer.
In the natural gas game between China and Russia for more than 20 years, Gazprom has always hoped to obtain a natural gas export price equal to or higher than the European market in its natural gas sales to China.
In the early 2000s, China’s natural gas import price to Russia was US$100 per thousand cubic meters, while Gazprom’s natural gas export price to Europe reached US$120 per thousand cubic meters.
In 2007, PetroChina’s offer to Gazprom rose to US$195 per thousand cubic meters. When the international oil price reached 140 US dollars per barrel in 2008, the price of Russian natural gas exports to Europe has climbed to nearly 500 US dollars per thousand cubic meters. Increasing price divergence has caused both parties to negotiate without reporting any expectations.
However, the “Ukraine crisis” that broke out in 2014 completely reversed the situation of both parties. Russia, with its domestic and foreign difficulties, has been severely sanctioned by Western countries, and urgently needs political and economic support from major eastern countries.
At the instruction of President Putin, Gazprom President Miller began frequent contacts with China. And on May 21, 2014, the last moment before President Putin left Shanghai and returned to Moscow, a 30-year natural gas cooperation agreement with a total value of up to 400 billion US dollars was successfully signed.
From Xinhua News Agency
Miller, President of Gazprom, at the Sino-Russian gas pipeline construction site﹀
Different from the containment of Asian buyers, the Russian government and Gazprom's attitude towards the CIS countries is much more complicated. In order to try to reduce or prevent natural gas resources in Central Asia from reaching the consumer market directly without passing through Russia, Gazprom invested a large amount of economic and political resources to mediate with Central Asian countries, and finally reached a "net price" acquisition agreement with Central Asian countries. This ensures its direct control over natural gas exports to Central Asian countries.
In the Ukraine crisis in 2014, Gazprom played an important role in suppressing Ukraine. In order to put pressure on the Poroshenko government, Gazprom cut off the supply of natural gas to Ukraine on the grounds that Ukraine was in arrears in natural gas fees. This is undoubtedly an economic disaster for Ukraine, which relies on Russian gas for as much as 70%.
"Stop your breath" when you are upset ﹀
Not only Ukraine, but other Western European countries also rely on Russian natural gas to varying degrees. As early as 1993, Gazprom signed natural gas supply agreements with France, Finland, Italy and Poland.
Bulgaria, the Czech Republic, Estonia, Latvia, Lithuania, and Finland are completely dependent on Russia for their natural gas supply. In the other seven countries, at least more than half of their natural gas comes from Russia. Germany, France, Italy and other core EU member states have 28%, 9%, and 38% dependence on Russian natural gas.
In the long-term energy cooperation, Gazprom has accounted for a quarter of the total imported natural gas in Europe. In particular, the implementation of natural gas pipeline projects such as "Beixi No. 2" and "Turkish Creek" has further expanded Gazprom's share of the European natural gas market.
Although the Western countries are bent on getting rid of Russia’s energy dependence, Gazprom’s superb political skills can resolve the energy countermeasures of European countries every time.
As the actual controller behind Gazprom, Putin, who is an agent, is clever. In 2005, in order to deepen the energy bundling between Germany and Russia, Putin instructed Gazprom to hire former German Chancellor Schroeder as the chairman of the committee for the Beixi pipeline project.
Relying on the political prestige of the former German Chancellor, Schroeder successfully lobbied all parties. Gazprom quickly gained recognition within Germany. Not only was the "Beixi Pipeline No. 1" successfully completed, but even the "Beixi No. 2 Line" was not hindered too much.
Former German Chancellor Schroeder﹀
The frustrated chairman of the Foreign Affairs Committee of the U.S. House of Representatives, Tom Lantos, saw that the cooperation between Germany and Russia became closer but could not be stopped. He even compared Schroeder to a "political prostitute."
In this way, Gazprom successfully built Schroeder into Russia's agent, deeply binding Germany and Russia. This has made Germany's attitude in handling relations with Russia always too soft, and made Germany a key link in Russia's leveraging of European politics and even Western politics.
With many years of operation of Gazprom, European countries have been inseparable from Russia's natural gas supply. Because of this, whenever Western countries swing their sanctions against Russia, they have to weigh the consequences of the cut off natural gas supply.
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This article is about NetEase News • NetEase New Humanities Wave Plan Signed Account • Geo Valley Original Content
Author l Onion with black eyes, an international current affairs tracker in the ancient northwestern city
References l State capitalism, privatization, and elite struggles-the dual logic of the recent "state-capital" relationship in Russia. Zhang Xin;
Credit rating report on Rosneft. Standard & Poor's;
Gazprom. 2019 annual report;
Sino-Russian energy cooperation: progress, motivation and impact. Hao Yubiao, Tian Chunsheng;
The situation in the Russian gas field and the market competition among major companies. Eurasian economy. Xu Xiangmei; The impact of European and American economic sanctions on Russian oil and gas companies. Lu Jingze;
Research on the Status and Development Strategy of Gazprom. Xiao Fei Meng Shuo
* This article is provided by the author and does not represent the position of Geo Valley
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