Gazprom

Gazprom is the company that shows how a ministry became a weapon. In 1989, the Soviet Union’s Ministry of the Gas Industry did something unusual in the history of bureaucracies: it transformed itself into a corporation called Gazprom. The state privatized a portion of the new company but kept the primary shareholding — and with it, control. (U.S. Army Military Review)

What followed was less a corporate history than a political takeover. After the Soviet Union fell, Vladimir Putin had plans for Gazprom even before assuming the presidency — in 1997 he completed a St. Petersburg Mining Institute thesis arguing for greater state control of the raw-materials economy. (U.S. Army Military Review) In 2000, after the annual shareholders’ meeting, company managers lost their board majority and Dmitri Medvedev was elected chairman, replacing Viktor Chernomyrdin. In 2001, the chief executive was replaced with Alexei Miller, the deputy energy minister and another Putin ally. The three leaders — Putin, Medvedev, and Miller — became what the Military Review article calls “an unbreakable circle firmly tying Gazprom and the Kremlin together.” In 2003, the government’s stake rose to 51 percent, giving it total control. (U.S. Army Military Review)

A state within a state

By the mid-2000s, Gazprom was enormous: more than 300,000 employees, and tax contributions alone accounting for over a quarter of the Russian budget. (U.S. Army Military Review) The Kremlin’s own glossary credits it with the world’s largest natural gas reserves, 18 percent of global gas production, and the world’s largest gas transmission system — 159,500 kilometers of trunk pipelines. (Kremlin) Observers called it Russia’s “jewel in the crown,” and Putin himself made no secret of its role: after a three-hour meeting following a Gazprom visit, he noted that “Gazprom and Rosneft are very real and each year are accumulating more and more wealth and international influence, which they are using to advance the interests of the Russian state.” (U.S. Army Military Review) In 2008 Medvedev told Gazprom’s board the company was “a force to be reckoned with” and “a major force in the world.” (U.S. Army Military Review)

The company’s quasistate character was literal: in 1998 its own security service employed 20,000 men, and in 2007 Russia’s Duma passed a bill allowing Gazprom (and Transneft) to create private, internal armed detachments — “corporate soldiers” authorized to use force, conduct arrests and body and vehicle searches, and carry military firearms — prompting international concern that the companies were being granted too much power. (U.S. Army Military Review) The Military Review article’s verdict was blunt: “Gazprom is a corporate entity clearly molded into a quasistate instrument of policy.” (U.S. Army Military Review)

The European collapse

For decades, Gazprom’s business model was simple: pipe Siberian gas to Europe and collect. Western sanctions after Russia’s 2022 invasion of Ukraine broke that model. In 2023 the company reported a net loss of 629 billion roubles — $6.9 billion — its first annual loss in more than 20 years, going back to the late 1990s when Miller himself took over. A year earlier it had made a 1.2 trillion rouble profit. Revenue fell to 8.5 trillion roubles from 11.7 trillion; earnings before interest, taxes, depreciation, and amortization collapsed from 2.79 trillion roubles to 618 billion. Supplies to Europe were down 55.6 percent to just 28.3 billion cubic meters. (Al Jazeera) Analysts called Gazprom the most tangible victim of Western sanctions — though they also noted that much of the decline owed to the company’s own decisions. (Al Jazeera) Looking ahead, the company was expected to rely on state support to fund a planned expansion of its domestic gas network, and shareholders faced a tense late-June 2024 meeting to decide whether to pay a full-year dividend after the interim one had been scrapped — past dividend decisions having rattled markets and investors. (Al Jazeera)

The rebound and the China pivot

The collapse did not last. In April 2025 Gazprom reported a full-year 2024 net profit of 1.2 trillion roubles — $14.76 billion. This time the gas business itself carried the company, earning 756 billion roubles against 649 billion for the oil business. Revenue rose a quarter to 10.7 trillion roubles, the second-highest in the company’s history, and EBITDA jumped 76 percent to 3.1 trillion roubles. Deputy chief executive Famil Sadygov pointed to a 1.034 trillion rouble liquidity cushion as the company’s “foundation for the future.” (Reuters) The rebound came even as gas transit through Ukraine ended on January 1, 2025, after Kyiv declined to extend the deal. (Reuters)

In the first half of 2025 the company earned 983.1 billion roubles ($12.2 billion) in net income — down about 6 percent, mostly on a stronger rouble and weaker oil prices. But the geographic shift underneath was stark: Russian gas accounted for just 18 percent of European imports, down from 45 percent in 2021, with the European Union planning a full phase-out of Russian energy by 2027. Gazprom’s future, Reuters reported, lay with China — though efforts to agree a new pipeline deal faced numerous challenges, including over price, even as an “important” agreement with China’s CNPC was expected during Putin’s visit to Beijing. (Reuters)

By 2026 that substitution was the story. First-half gas deliveries rose 8 percent, the Power of Siberia pipeline delivered 38.8 billion cubic meters to China in 2025 and was expected to deliver about 44 bcm in 2026 — but the growth is substitution, not expansion. One pipeline, one customer, and terms set in Beijing: the price per thousand cubic meters that China pays has never been published. (Eastern Herald) Gazprom replaced a wealthy, diversified European customer base with a single powerful buyer — trading one dependency for another. (Eastern Herald)

Management’s own framing for 2026 was cautious optimism: a 6–7 percent rise in core profit, and a Russian government production forecast of about 688 billion cubic meters that analysts at Interfax called cautious. (Eastern Herald) But the headline growth number — deliveries up 8 percent in the first half — came without any breakdown of volume, price, or destination, the kind of opacity that has followed the company since the ministry days. (Eastern Herald)

What this profile does not claim

This profile does not state a current state shareholding percentage, because the available figures conflict and are dated (50.002 percent in the Kremlin glossary, 51 percent in 2003 in the Military Review). It does not state a current employee headcount, which appears only in snippet-level leads. It does not assert any specific “financing ties” allegation connected to the company’s orbit; none was verified from fully read sources. It does not treat Power of Siberia 2 as confirmed — a new China pipeline deal remains unannounced. The scale figures (reserves, production share, pipeline length) are the Kremlin’s own glossary claims, cited as such rather than as independently audited facts.