Page 15 - bne_newspaper_May_25_2018

Eastern Europe
May 25, 2018 www.intellinews.com I Page 15
Gazprom insider pipeline deals for Putin cronies worth $93bn, analysts claim
bne IntelliNews
Sberbank analysts have produced another controversial report. This time the bankers report on contracts signed with state-owned Russian natural gas behemoth Gazprom and firms owned by stoligarchs and President Vladimir Putin's close personal friends Gennady Timchenko and Arkardy Rotenburg.
The cost of construction contracts to build gas of exports pipelines such as Power of Siberia (Sila Sibiri), Nord Stream 2 and Turkish Stream comes to a total of $93.4bn, the report by Sberbank CIB analysts Alex Fak and Anna Kotelnika said.
Fak, who previously authored another controversial report, was promptly fired by
the Russian banking giant. "Dear all – I was dismissed today for writing the recent report
on Gazprom. What took them so long, you ask? Bureaucracy, paperwork, a vague hope I could yet be reformed..." Fak wrote in an email to clients.
Fak, who worked as a reporter for bne IntelliNews at the start of his career, highlighted Gazprom is involved in three giant pipeline projects: the Power of Siberia (Sila Sibiri), Nord Stream 2 and Turkish Stream, which will cost the company a total of $93.4bn, Fak said in the report he co-authored with Anna Kotelnika.
Fak objected to the deals, saying that investing in pipelines does not yield high margins, and notes that "we find the decisions of Gazprom very clear once we assume that the company is managed
Sberbank analysts tie stoligarchs Timchenko Rotenburg to $93bn gas pipeline contracts
in the interests of its contractors, and not for extracting commercial profits," as cited by RBC business portal.
The deals to build the pipelines have been awarded to Stroygazmontazh, which is owned by Arkady Rotenberg, a childhood friend of Putin’s, and Stroytransneftegaz, which is half owned
by Gennady Timchenko, another close Putin associate, and his family. Both men have been included in the US sanctions on Putin’s friends.
Sberbank CIB head Igor Bulantsev explained to RBC that Fak was fired because his work was “unprofessional” and violated both “internal policies” and ethical standards.
This is the second run in Fak has had with senior Kremlin managers of state-owned assets. Last autumn he nearly got fired for publishing a report "Rosneft: We Need to Talk About Igor", referring to the power company’s CEO Igor Sechin. That report was critical of Sechin, who Fak claimed was building an empire with little regard to
the profitability of the company. After Rosneft complained, the report was withdrawn and reissued with the offending sections removed.
The whole scandal is reminiscent of the 1990s when head of research at UralSib Erik Kraus
was famously sacked for saying: “We need to remove the ‘former’ from the moniker former- bandits at Sibneft,” in a report critical of corporate shenanigans at the oil company controlled by