26.03.09

Students of the Harvard Business School (HBS) now see in quite a new light the reasons of the recent "gas war" between Ukraine and Russia, which the western media are often trying to describe as something short of Kremlin "expansionism". This is, figuratively speaking, due to the fact that they were able to tread in the footsteps of managers of the world's biggest Russian gas concern thanks to HBS Economics and Production Management Professor Rawi Abdelal, who offered them to carry out a situation analysis of the key challenges, confronting the Gazprom management, based on the example of the problem of Russian transit gas carriages via Ukraine.

Many students were frankly amazed when they learned the true facts of that gas confrontation, Professor Abdelal told Itar-Tass by telephone. The point is that the western coverage of that gas crisis was extremely anti-Russian and, at the same time, very pro-Ukrainian. And even though Gazprom proved to be much better than before during the latest crisis, the Western media are still displaying a biased approach to Gazprom and to Russia in general. Whenever one submits all the facts to students and offers them to take the place of Gazprom managers, they get an absolutely different impression of that company, the professor noted.

The analysis, carried out by the economist, showed that Russia had for a long time subsidised Ukraine and several other post-Soviet countries by selling them natural gas at a cheaper price than that paid by European customers. But when Gazprom decided to compete more openly on the world markets and to fix an equal price for all its customers, Ukraine refused to pay any higher price and even wanted to make Gazprom pay more for transit carriages of gas to Europe. Russia waited until the expiration of the contracts in force and then stopped its gas deliveries to Ukraine. The latter retaliated by illicitly tapping the gas, which was bought by the European countries and for which they had already paid. According to Abdelal, the Russian stand was that Ukraine should pay the same price for gas as all the other customers and should stop stealing Russian gas.

Preparing the materials for the said situation analysis, Abdelal, as he himself said, tried to refute the broadly circulated and erroneous view that Gazprom is an instrument of the Russian State, which is using it as an energy weapon to punish these or other states. Much truer is the fact that Gazprom is a commercial structure, which is striving to maximise its profits and to defend the interests of its principal shareholder - the Russian State, the professor pointed out. By doing it, Gazprom is bound to bring Russia increasingly closer to its customers, primarily to Germany, France and Italy. It is obvious that Russia has become politically closer to those nations due to their interdependence. Europe needs Gazprom and Gazprom needs Europe, Abdelal summed up.

The professor, who is regarded as a big connoisseur of the Russian energy sector, is sure that Gazprom will emerge from the current global financial crisis as one of the most important companies of the world, since nobody else has such huge amounts of natural gas. In the medium-term and long-term future Gazprom will grow to be a company with which very few will be equal in importance and in strategic interests, he stated.

At the same time, Abdelal warned against the problems that had engendered the current crisis. For instance, Gazprom has to guarantee the financing of its investment requirements and, for this purpose, it will have to emerge on the international markets of capital, which are rather chaotic in our days. There is one more problem - the declining cost of Gazprom shares. This has happened not because of changes in the company's principal characteristics, but chiefly because the financial crisis has simultaneously lowered the cost of petroleum, which, in turn, has brought down the cost of gas and led to a huge outflow of capital from Russia.

The Harvard Business School Bulletin testifies that the Abdelal-compiled study material is in great demand. He has already tried and tested it on students of the top-managers promotion courses, while his colleague Professor Forest Reinhardt has carried out situation analyses of the gas case with individual groups of students. All the nine hundred first year students of the Harvard Business School will take part in the Gazprom practicum to be held within a few weeks from now.

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Source: Itar-Tass