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Why Russian Energy Giant Gazprom Is Mustering a Private Army

It’s less about command and control than currying favor.
February 15, 2023
Why Russian Energy Giant Gazprom Is Mustering a Private Army
08 March 2022, Russia, St. Petersburg: The logo of the energy company Gazprom is seen on a plant of the Russian state-owned corporation in St. Petersburg. Photo: Stringer/dpa (Photo by Stringer/picture alliance via Getty Images)

You may have seen headlines in recent days suggesting that Gazprom, the Russian government–owned energy behemoth, is standing up its very own military outfit—a possibility that hints of an ominous, corporate-feudalistic future for Russia. But how new is this development, and how worrying is it?

Semi-private military organizations are all the rage in Russia right now. The most notable among them is PMC Wagner (the PMC stands for “private military company”), overseen by Yevgeny Prigozhin. (Prigozhin, nicknamed “Putin’s chef” because his catering business took in a huge number of government contracts, became notorious in the West a few years ago because of his reported involvement in the Internet Research Agency that interfered in the 2016 U.S. elections. By that point, Prigozhin had already founded PMC Wagner.) While private military companies are technically illegal in Russia, Wagner has proven useful enough to Vladimir Putin’s regime that it has been central to the Russian effort in Ukraine, has been active in multiple countries on multiple continents, and even has a swanky office building in St. Petersburg.

And now, if press accounts are accurate, there’s a new competitor in the mix.

The Kyiv Independent, citing sources from the Intelligence Directorate of the Ukrainian Ministry of Defense, reported last week that the Russian energy conglomerate Gazprom is creating its own military force; this reporting has since been confirmed.

Gazprom is, by most estimates, the largest company in Russia, and its majority shareholder is the Russian government. Its long-time head, Alexei Miller, is an associate of Putin’s from his days in the St. Petersburg city government. That means that if the company really is mustering its own private army, that army won’t exactly be private. Like Wagner, its existence would depend completely on Putin’s whim.

Armies are expensive, whether they’re private, public, or something in the middle, but Gazprom has cash—it made roughly $139 billion in net revenue in 2021. The company can probably afford to hire enough people and buy enough weapons to establish a quasi-military force of some kind. (Of course, this assumes there are still people in Russia worth employing as soldiers who haven’t already been killed, wounded, mobilized, hired, or otherwise deployed to Ukraine, and who also haven’t fled the country.)

The question, of course, is why Gazprom would want to do this. The Russian government makes a significant portion of its income through Gazprom, so every ruble Gazprom spends on a private army will be one that doesn’t go into the Ministry of Defense and the actual, existing, overstretched Russian military that’s actually fighting. Adding another armed force to the already confused Russian melange of rifles and epaulets would likely further confuse the chain of command. There’s already a public row at the strategic level of the Russian war effort, with the heads of the Russian military, Defense Minister Sergei Shoigu and Chief of the General Staff and overall commander of the “special military operation” General Valery Gerasimov on one side, and the leaders of the two most prominent independent fighting groups in Ukraine, Prigozhin and Chechen strongman Ramzan Kadyrov, on the other. Their inability to work together is at least partly to blame for the Russian failures in Bakhmut, a small town with little strategic significance where Russian forces have suffered what may be thousands of casualties. It’s hard to see how another private army with its own independent line to Putin will clear things up.

For the short-to-medium term, then, it might actually be good for the Ukrainians to fight several Russian armies who are also fighting each other. In the long term, the outlook is less clear.

Abstracting away from the Russian case specifically, it’s not usually greeted as good news when an independent military force pops up in a nuclear-armed country. In general, the fewer independent armed groups in nuclear states, the better.

Alas, despite Putin’s vaunted “vertical of power,” it’s more like a pyramid, with independent routes to the same summit. Even before the full-scale invasion of Ukraine a year ago, the list of armed groups in Russia with independent and often overlapping authority was troublingly long: In addition to the Ministry of Defense, there were also the Federal Security Service, the Federal Protective Service, the Ministry of Emergency Situations, the National Guard (Rosgvardia), Wagner, and Kadyrov’s semi-autonomous government in Chechnya. That list doesn’t include organizations that operate exclusively outside the Russian Federation or the more mysterious litany of individuals and organizations who use cutouts in organized crime to do their dirty business. Not all of these groups are equally powerful or have the same kind of power, but that’s the point—they all have independent links to the real source of power, Putin, who is adept at balancing one against the other. It’s not an efficient way to run a government, but it’s a great way to protect against coups. Other authoritarian regimes that maintain(ed) overlapping or multi-tiered security services include Iran, Iraq, and Nazi Germany.

So what if Putin falls? Eventually, one way or another, Putin will no longer be president of Russia. Autocratic regimes are notably unstable at times of leadership transition, and it won’t be fun to have lots of different groups with guns vying for control—a scenario that could resemble the plot of Crimson Tide.

It’s hard to tell, though, who would want to be in charge of Russia’s nukes in the chaos that will follow after Putin has died or been deposed. Even if some warring faction other than the Ministry of Defense were to somehow secure all of Russia’s nuclear weapons—in submarines, at air bases, in missile silos, on road-mobile launchers, and in storage—and the command-and-control systems to launch them, what would that faction stand to gain? The expense involved in supporting that nuclear infrastructure is enormous, and it’s not clear how they could be used against domestic political opponents, anyway. It’s very hard—though not altogether impossible—to imagine a situation in which anyone but the Ministry of Defense would have both the capability to use the country’s nuclear weapons and a motive to do so. The prospect of pieces of Russia’s nuclear arsenal being sold off appears only slightly more realistic. Of course, there’s always the unexpected. Authoritarian regimes are most unstable when their leadership changes, and the potential for catastrophe after Putin is disconcerting.

This gets us back to why Gazprom might be raising an army: to compete with other power centers in the government for influence with Putin and for resources, both official and under the table. It used to be that the best way to make Putin happy was to make him lots of money, especially euros. Now, the best way to please him is to send young Russians to die in Ukraine.

That’s why Gazprom and its putative private army is no more a threat to the state than the already fractured and fractious security apparatus: It’s not competing for primacy, just profit. Yet its grim new investment may redound to Ukraine’s benefit.

Benjamin Parker

Benjamin Parker is a senior editor at The Bulwark.