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Gazprom booth at Neftegaz 2022 fair
Photo: Maxim Shipenkov / EPA
Fifteen years ago, together with my fellow journalist Valeriy Panyushkin, I wrote a book called Gazprom: Dealing with Power (in Russian it was called Gazprom: Russia's New Weapon).
At that time, such a book could still be published in Russia.
After examining the protagonist, the richest company in Russia, we came to the conclusion that it is a giant in great danger.
And that Gazprom's prosperity, and with it Russia's, could end at any moment because Putin is willing to sacrifice it for his own ends.
Ten years later - five years ago - we wrote a sequel and wanted to publish it under the title »Russia in the tube«.
But this time, the publisher demanded that almost all references to Putin be removed from the book.
Ultimately, the book never saw the light of day.
This is not surprising as the company had a history that almost paralleled the history of the country.
And every detail confirmed that nobody - neither the founders of Gazprom nor the current owners - considered the concern a company.
For her it was always an instrument of power;
both a tool to achieve their personal ends and a deadly weapon to intimidate or crush their enemies.
Gazprom was founded under Stalin, Lavrenty Beria was the head of the construction of the first pipeline.
He had also overseen the development of the Soviet atomic bomb, so the construction of the pipeline and the atomic bomb were effectively equated.
The pipeline was built by prisoners of war, mostly Germans.
The moment the Soviet Union imploded, everything collapsed except Gazprom.
Viktor Chernomyrdin, the Soviet minister for the gas industry, concluded in 1986 that the industry was being inefficiently managed and suggested that his own ministry be dissolved.
He was looked at like a madman: "We will take away your dacha, your car and your ministerial rations," the Soviet Prime Minister threatened him.
But Chernomyrdin insisted and turned Gazprom into a corporation.
A few years later the USSR collapsed, but Gazprom survived.
And now Chernomyrdin was the prime minister, using Gazprom's foreign exchange earnings to pay salaries and pensions;
the Russian state had few other sources of money.
Then they began to turn Gazprom into an instrument of foreign policy.
First, in 1994, Turkmen President Saparmurat Niyazov demanded that the company's then head, Rem Vyakhirev, share with him Russia's foreign exchange earnings, which included gas produced in Turkmenistan and exported abroad.
But Viachirev remained stubborn: "We don't sell your gas to Europe," he said, "Your gas only goes to the Ukraine.
That's where the money comes from." The Turkmen President was amazed: "But how can the gas be distinguished?
Isn't it mixed up in the pipeline?" The Gazprom boss replied: "We can tell the difference."
It is known that in the late 1990s, when the family of the old President Yeltsin was looking for a successor, they found a promising candidate for the post of Gazprom head in Vladimir Putin, the young head of the Federal Security Service.
But once he became president, Putin quickly realized that he could be both the head of Gazprom and the head of state.
From his early years he considered Gazprom as his own company.
The previous managers, Viktor Chernomyrdin and Rem Vyakhirev, were fired after it was revealed that the previous management had stolen shares in the company in the 1990s and registered them in their relatives' names.
Putin ceremonially returned the majority stake in Gazprom to the state and handed over the management of the company to his former personal secretary, Alexei Miller, a man with no gas industry experience but with the utmost loyalty.
In 2004, Putin clashed with Ukraine for the first time.
Pro-Russian candidate Viktor Yanukovych and pro-Western Viktor Yushchenko ran head-to-head in the country's presidential election.
The authorities announced that Yanukovych had won, but thousands of Ukrainians marched on the Maidan in Kyiv to protest election fraud.
Yushchenko became president, but Putin did not accept him.
The protracted gas wars began: every winter, Gazprom turned off Ukraine's tap, which immediately hit European consumers.
Putin, on the other hand, claimed that Ukraine was to blame for this, since it did not pay for the gas itself and stole the gas destined for Eastern European countries.
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Kremlin chief Putin with then Ukrainian President Yushchenko (2008)
Photo: Mikhail Klimentyev / Kremlin / Ria Novosti / EPA
At the time, I was writing a column for the Russian newspaper Kommersant, in which I pointed out that Gazprom was no longer responsible for foreign policy in Russia, but rather the Foreign Ministry.
A few days later, this phrase was proudly repeated by Gazprom employees and bitterly repeated by diplomats.
All acknowledged that the threat of a gas war has become an important tool of Russian foreign policy.
Shortly before the first gas war, in 2005, Vladimir Putin and Gerhard Schröder had agreed on the Nord Stream pipeline for the first time.
Polish President Aleksander Kwasniewski was outraged and dubbed the agreement a "Putin-Schröder pact," but many believed his panic was in vain.
As early as December 2005, Gazprom began cutting off gas supplies to Ukraine and Europe.
Even then, experts said that was completely illogical and that consumer confidence should not be undermined.
A pipeline is like an atomic bomb, if Gazprom ever stops deliveries, the consequences would be catastrophic.
But Putin had run Gazprom all by himself and knew exactly what he wanted.
Ukrainian negotiators were shocked at how well he knew the problems of gas pricing – he could easily sketch a formula for gas price shifting on a piece of paper.
He used Gazprom as an instrument of retaliation against Ukraine and was not ashamed of Gazprom's hypothetical losses as a company.
And Gazprom executives reiterated that European consumers had no choice anyway - after all, they had nowhere else to go.
Gas consumption would have to increase, so Europe would inevitably give up Ukraine and agree to Russian terms.
On the one hand, Putin's strategy has failed.
Because Gazprom surprisingly overlooked all world trends and all changes: first the company executives did not believe in LNG, then in shale gas, and then they did not believe that the price of gas would fall.
They said shale gas was an American invention and that extraction would never be worthwhile.
But the new technology was a heavy blow for Gazprom.
On the other hand, the gas wars ended in a Russian victory: Ukraine's democratic experiment after the Orange Revolution failed, and Putin's favorite, Viktor Yanukovych, triumphed in the next elections in 2010.
Gazprom's economic difficulties in the following years prevented the company from being used for foreign policy purposes.
The company's capitalization declined.
At the same time, the company's management wasn't particularly concerned about this, as it was never intended to make the company profitable.
It was meant to benefit the head of state, and that was enough.
Vladimir Putin and Alexei Miller have followed the same pattern as Chernomyrdin and Vyakhirev over the past decade: they gradually began to separate parts of Gazprom and transfer those parts to relatives.
For example, Gazprom's largest chemical subsidiary went into the ownership of Kirill Shamalov, the Russian President's son-in-law (now a former son-in-law – although the company was not taken away from him even after his divorce from Putin's daughter Katerina).
A corporation as a weapon of war
Now that Gazprom has served primarily for enrichment for a decade, it is returning to its former role as a weapon of war.
Russian propaganda has struck again: ever since the first sanctions were imposed on Russia, Moscow television stations have boasted that Europe won't be able to do without Russian gas for long.
There are currently five gas pipelines from Russia to Europe: two through Ukraine, one through Belarus and Poland, one through Turkey and one through the Baltic Sea (Nord Stream 1).
On May 11, Ukraine shut down one of the two pipelines, Soyuz, after the border crossing was seized by the Russian army.
The second Ukrainian pipeline continues to supply gas.
Gas exports via the Yamal-Europe pipeline through Belarus and Poland have been halted due to Russian sanctions against Poland.
On June 16, Russia cut gas supplies via Nord Stream by 60 percent, arguing that the necessary equipment was in Canada for repairs and had not been returned because of sanctions.
Finally, Turkish Stream, which transports gas through Turkey to south-eastern European countries, was shut down June 21-28 for allegedly planned maintenance work.
Don't be afraid of escalation
It can be assumed that Gazprom will shut down the Nord Stream line in the near future.
Basically, this is exactly the same gas war that Putin has already waged against Ukraine.
Just on a new level: Russian propaganda has long insisted that World War III has begun and that Moscow is attacking NATO as a whole.
The gas front is a natural part of this third world war.
Previous experience has already taught Putin that a gas war can be very effective and victorious - the main thing is not to be petty, not afraid of losses and escalation.
Will Putin be able to completely shut off gas supplies to Europe?
Experts will say this is madness, it would destroy Gazprom economically, it would bring down the Russian economy.
But Putin will claim otherwise.
The disruption to gas supplies, he hopes, should plunge Europe into a political crisis - just as the gas wars buried Ukraine's Orange Revolution.
The Russian public can tolerate Gazprom's lack of foreign exchange earnings;
nobody will complain.
But it is unlikely that the people of Europe will peacefully and steadfastly remain in their homes for the sake of Ukraine and the inviolability of its borders.
Chaos and political instability in Europe: these are the dividends Putin is hoping for, which are much more important than Gazprom's business.
While Europeans wonder if he's ready to detonate a nuclear bomb in Ukraine, he's pulled out of his pocket a reliable substitute -- a gas pipeline.
Ten years ago I heard from Kremlin strategists that it was pointless to play chess against the Europeans because we were guaranteed to lose.
The only way to get anywhere was to flip the board.
Back then, they didn't know how to do it.
But now they seem to know.
I don't know if the Europeans really understand their plan.