Putin’s Mentor Elected to Gazprom’s BOD

by Roman Kupchinsky

The June 26, 2009 shareholders meeting of OAO Gazprom, the Russian state-owned gas monopoly, did not produce many surprises. Management received large bonuses while shareholders complained that they were being victimized by the company as their dividends shrank.

One of the most interesting developments was the election of Valery Musin to the company’s board of directors as an independent director. Musin, head of the Civil Procedure Department at St Petersburg University Law Faculty, is the former research supervisor of Russian President Dmitry Medvedev and teacher of Prime Minister Vladimir Putin.

Musin received the second most votes from shareholders at the meeting after Alexei Miller, the company CEO.

Musin’s relationship with Putin solidified during their days together in the St. Petersburg Mayor’s office where Putin headed the department of foreign economic relations. Musin worked in this department as a legal expert. Other employees in the section were Alexei Miller, the present CEO of Gazprom, Valery Golubev, a former KGB officer who is now a deputy CEO of Gazprom, and Igor Sechin, the Deputy Prime Minister responsible for energy policy in Putin’s cabinet who is also chairman of the board of directors of the state-owned oil company Rosneft.

At the time of this posting, the Gazprom website had not yet posted a full biography of Musin indicating only that he was head of the Civil Procedure Department.

While Musin might not have much clout on the Gazprom board, his election appears to be the result of Putin’s and Medvedev’s efforts on his behalf. According to an article in Kommersant Daily, "The Prime Minister cut the list (of candidates for the board) apart," our source in the Government said. However, another well-informed source claims that the amendments were made by President Dmitry Medvedev.”

Whatever role Musin is expected to play as an independent director, there is no doubt that his election to the board will only strengthen Putin’s hold over Gazprom. As a legal expert Musin will no doubt provide invaluable advice to Russia’s champion company, its managers and behind-the-scenes power brokers.

Eurasian Energy Briefs

by Roman Kupchinsky

China continued to forge closer energy ties with Turkmenistan. On June 25, 2009 the China Development Bank signed an agreement with Turkmengaz, the state-owned gas company, promising $4 billion in preferential loans for energy projects. Turkmengaz agreed to boost future gas deliveries to China by 33 percent, from 30 billion cubic meters (bcm) to 40 bcm annually. China National Petroleum is building the 7,000 kilometer (4,300 mile) Central Asia Gas gas pipeline from the Bagtyarlyk region of Turkmenistan that is scheduled to open this year.


Russian energy giant Gazprom began its annual stockholders meeting today in Moscow. On the agenda was the election of a new board of directors. The board is headed by first Deputy Prime Minister Viktor Zubkov and contains four Gazprom managers, including CEO Alexei Miller. Valery Musin , the former teacher of Prime Minister Vladimir Putin and President Dmitry Medvedev at St. Petersburg State University was elected to the board. Professor Musin is one of Russia's leading international business law experts. He served as chief legal expert to the St. Petersburg Mayor's Office Foreign Affairs Department headed at the time by Putin. His election strengthens Putin's grip on Gazprom.

Ukraine’s Naftohaz refuted charges made by Gazprom’s Deputy CEO Alexander Medvedev on June 24, 2009 that storing Russian gas in Ukrainian underground facilities is risky and that Ukraine “stole” 8 billion cubic meters of Russian gas. After the press conference, Gazprom’s press center explained that Medvedev was referring to a dispute which took place in 2004-2005. In response to these charges, the Naftohaz press center stated that it is impossible for Ukraine to steal any Russian gas from its storage facilities because for the past 4 years no Russian gas has ever been stored in them. Furthermore, Naftohaz explained that according to the current contract there is no linkage between storage and the transit of Russian gas to Europe. Naftohaz did indeed offer to store Russian gas this year, but Gazprom refused the offer.