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The story
Founded by Government of Russia in 1989.1
Origins
In 1943, during World War II, the government of the Soviet Union developed a domestic gas industry. In 1965, it centralized gas exploration, development, and distribution within the Ministry of Gas Industry. In the 1970s and 1980s, the Ministry of Gas Industry found large natural gas reserves in Siberia, the Ural region, and the Volga Region. The Soviet Union became a significant producer of gas. In August 1989, under the leadership of the minister of Gas Industry of the Soviet Union (1985-1989) Viktor Chernomyrdin, the Ministry of Gas Industry was renamed the State Gas Concern Gazprom, and became the Soviet Union's first state-run corporate enterprise. In late 1991, when the Soviet Union dissolved, gas industry assets were transferred to newly established national companies, such as Naftogaz and Turkmengaz. Gazprom kept assets located in Russia and secured a monopoly in the gas sector.
Privatization
In December 1992, when Boris Yeltsin, the Russian president, appointed Viktor Chernomyrdin, Gazprom's chairman, his prime minister, the company's political influence increased. Rem Viakhirev took the chairmanship of Gazprom's Board of Directors and Managing Committee. Following the Decree of the President of the Russian Federation of 5 November 1992, and the Resolution of the Government of Russia of 17 February 1993, Gazprom became a joint-stock company. Gazprom began to distribute shares under the voucher method. (Each Russian citizen received vouchers to purchase shares of formerly state-owned companies). By 1994, 33% of Gazprom's shares had been bought by 747,000 members of the public, mostly in exchange for vouchers. Fifteen percent of the stock was allocated to Gazprom employees. The state retained 40% of the shares. That amount was gradually lowered to thirty-eight percent. Trading of Gazprom's shares was heavily regulated. Foreigners were prohibited from owning more than nine percent of the shares. In October 1996, 1% of Gazprom's equity was offered for sale to foreigners as Global Depository Receipts. In 1997, Gazprom offered a bond issue of US$2.5 billion.
Chernomyrdin, as Prime Minister of Russia, ensured Gazprom avoided tight state regulation. Gazprom evaded taxes, and the Government of Russia received little in dividends. Gazprom managers and board members, such as Chernomyrdin and the Gazprom Chief Executive Officer, Rem Viakhirev, engaged in asset-stripping. Gazprom assets were shared amongst their relatives. Itera, a gas trading company, also received Gazprom assets. In March 1998, for reasons unrelated to his activities at Gazprom, Chernomyrdin was fired by Yeltsin. On 30 June 1998, Chernomyrdin was made chairman of the board of directors of Gazprom.
State control
In June 2000, when acting-president Vladimir Putin became the president of Russia, he acted to gain control over Russia's oligarchs, and to increase the Government of Russia's control in important companies through a program of national champions. Putin fired Chernomyrdin from his position as the chairman of the Gazprom board. The Russian Government's stock in Gazprom gave Putin the power to vote out Viakhirev. Dmitry Medvedev and Alexei Miller – former Putin employees in Saint Petersburg – took over from Chernomyrdin and Viakhirev. Putin's actions were aided by the shareholder activism of Hermitage Capital Management Chief Executive Officer William Browder, and by the former Russian finance minister Boris Fyodorov. Miller and Medvedev were tasked with halting asset-stripping at Gazprom and with recovering the associated losses. Itera was denied access to Gazprom's pipelines and came close to bankruptcy. In 2006, Itera agreed to return stolen assets to Gazprom for a fee. Browder was deported from Russia in 2005, and the Russian arm of Hermitage Capital Management was seized two years later.
In April 2001, Gazprom acquired NTV, Russia's only nationwide state-independent television station, from Vladimir Gusinsky's company, Media-Most Holdings. Gusinsky fell out of Putin's favor after using NTV to publish criticism from the families of sailors who died during the Kursk submarine disaster of August 2000 and additional criticism of Putin's handling of the Second Chechen War of 1999 to 2009. Gusinsky fled Russia in 2000, allowing Gazprom to take over NTV without his opposition.
In June 2005, Gazprombank, Gazpromivest Holding, Gazfond and Gazprom Finance B. V., subsidiaries of Gazprom, sold a 10.7399% share of their stock for $7 billion to Rosneftegaz, a state-owned company. Some analysts said the amount paid by Rosneftegaz for the stock was too low. The sale was completed by 25 December 2005, and with the purchased stock and the thirty-eight percent share held by the State Property Committee, the Government of Russia gained control of Gazprom. The Government of Russia revoked the Gazprom twenty-percent foreign-ownership rule; the company became open to foreign investment. In September 2005, Gazprom bought 72.633 percent of the oil company Sibneft for $13.01 billion. Sibneft was renamed Gazprom Neft (Gazprom Oil). The purchase was aided by a $12 billion loan. Gazprom became Russia's largest company. On the day of the deal the company worth was valued at £69.7 billion (US$123.2 billion).
In July 2006 Russia's State Duma passed the law On Gas Export with a nearly unanimous vote. This law gave Gazprom the exclusive right to export natural gas from Russia. In December 2006, Gazprom signed an agreement with Royal Dutch Shell, Mitsui and Mitsubishi, to take over fifty percent plus one share of Sakhalin Energy.
The Gazprom corporate slogan of 2006: "Dreams Come True" (Russian: Мечты сбываются)
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achieved wide resonance.
In June 2007, TNK-BP, a subsidiary of BP plc, agreed to sell its stake in the Kovykta field in Siberia to Gazprom after the Government of Russia questioned BP's right to export gas from Russia.
On 1 August 2007, Gazprom's Sergey Kuprianov threatened to stop supplying Belarus with Gazprom gas if Minsk failed to pay off its debts, and if so, it would experience a 300% price-increase. Two days later, Kuprianov saw significant progress towards payment, and expected to be paid by the following week.
On 23 June 2007, the governments of Russia and Italy signed a memorandum of understanding towards a joint venture between Gazprom and Eni SpA to construct a 558-mile (900 km) gas pipeline to carry 1.05 trillion cubic feet (30 km3) gas per year from Russia to Europe. This South Stream pipeline would extend under the Black Sea to Bulgaria with a south fork to Italy and a north fork to Hungary.
On 18 December 2007, Frank-Walter Steinmeier (then Foreign Minister of Germany) and Dmitry Medvedev (then First Deputy Prime Minister of Russia) signed an agreement on behalf of BASF to exploit another gas field. At the time, German demand was 40% covered by Russian supply. Some German academics warned that Germany had become too dependent on Russia, but Steinmeier, citing the new Ostpolitik, disregarded them.
On 11 February 2008, Kuprianov threatened Ukraine with a halt to supply; in January 2009, the threat was carried out, marking the beginning of the 2009 Russia–Ukraine gas dispute. BASF's Jürgen Hambrecht expressed concern about the reliability of his firm's supply, but Miller assuaged his worries in a phone call, and the Europeans did nothing to change course for more than a decade.
On 1 December 2014, during a visit to Turkey, Putin said the South Stream project would not proceed and that Russia would ship 63 billion cubic metres per year (bcm/y) of gas to Turkey instead of to Bulgaria. Bulgaria was being sued by the European Union for signing a contract with Russia which was not aligned with European Union regulations. The president of Bulgaria, Rosen Plevneliev, pressured the European Union and Russia to resolve the matter quickly.
Continual rise
On 4 September 2012, the European Commission announced an anti-trust investigation into Gazprom's activities. This was based on "concerns that Gazprom may be abusing its dominant market position in upstream gas supply markets." In late November 2013, Gazprom expanded its media interests by acquiring Profmedia from Vladimir Potanin.
On 21 May 2014, in Shanghai, Gazprom and the China National Petroleum Corporation made a contract worth $400 billion over thirty years. The contract was for Gazprom to deliver 38 billion cubic meters of natural gas per year to China beginning in 2018. In August 2014, construction began with pipes for the Power of Siberia pipeline delivered to Lensk, Yakutia. Russia will start supplying natural gas to China through the Power of Siberia pipeline on 20 December 2019 as part of the two countries' $400 billion energy pact. Beijing and Moscow are now negotiating over a second Far Eastern gas pipeline.
In June 2014, Gazprom negotiated with the International Petroleum Investment Company (IPIC of Abu Dhabi) over a 24.9 percent stake in the Austrian oil and gas firm OMV. In July 2014, Gazprom acquired Central Partnership, one of the largest film distributors in Russia.
In September 2015, the Nord Stream 2 contracts were signed, and by July 2021, the pipeline was commissioned.
Loss of EU revenue
Following the Russian invasion of Ukraine in February 2022, the threat by Russia of reducing the supply of gas to Europe risked the Gazprom export market. When it was implemented, exports by Gazprom decreased from the 185 Bcm achieved in 2021 to 100 Bcm in 2022 and further declined in 2023. The revenue of Gazprom, initially supported by high prices, collapsed in 2023, resulting in a trading loss and necessitating a 34% price increase in the domestic market over three years. Gazprom has also become subject to compensation claims for failure to supply gas under long-term contracts. In April 2025, Gazprom announced that it would begin producing home appliances.
From Wikipedia’s article on Gazprom, shared under CC BY-SA 4.0.4