Russia Reform Monitor: No. 1833

May 19:

Officials at Gazprom, Russia’s largest state-controlled oil company, announced this week that its profits last year fell by 11 percent, while its valuation dipped below $100 billion for the first time since the economic recession in 2009. Even worse, reports Radio Free Europe/Radio Liberty, the company is currently under investigation by the European Union, and its books are being audited by Russian authorities. As the company turns twenty this month, some insiders in the Kremlin are even pushing for the company to be split into smaller units. “Gazprom is in a very profound strategic crisis that began to emerge a long time ago,” said former deputy energy minister Vladimir Milov, arguing in favor of the split. “They were warned many times that their inflexible, unwavering and shoddy policies would lead them into trouble.” Analysts blame the slump on the apparent failure of the company to react to “potentially revolutionary changes” in the market, such as shale gas and liquefied natural gas.

The Kremlin may lose a portion of its control over another oil titan. In accordance with Prime Minister Dmitry Medvedev’s long-held policy of privatizing the banking and oil industries, Forbes reports that oil company Rosneft plans to reduce government ownership to 51 percent, a reduction of 19 percent. Currently, state-owned Rosneftegaz, which is the natural gas arm of Rosneft, currently holds 69.5 percent of the company, while British oil company BP owns 19.75 percent. Rosneft itself became a significant force in the Russian oil market a decade ago after acquiring Yukos Oil, the now-defunct oil company owned by the jailed tycoon Mikhail Khodorkovsky.

May 21:

Officials in the Russian Duma overwhelmingly approved a bill imposing fines and jail terms for offending religious beliefs. Reuters reports that the bill will impose jail terms of up to a year and fines topping 300,000 rubles ($9,600) for any public acts “expressing clear disrespect for society and committed with intent to offend the religious feelings of the faithful,” and if the act is committed in a “house of worship,” the penalties increase to three years in prison and fines up to 500,000 rubles. Rights activists lament the bill as “another repressive law,” granting government-approved religious groups special protection. The legislation was drafted in reaction to punk band Pussy Riot’s raucous demonstration last summer, in which they stormed Moscow’s main Orthodox Christian to sing a “punk prayer” to the Virgin Mary to save Russia from Putin.

May 23:

Russian officials announced plans to evacuate a drifting Arctic research station because of melting ice fields. The ministry blamed the evacuation on “abnormal development of natural processes,” which endangered both the work of the station and its 16 staff members. UN experts report that Arctic ice melted at record speeds in 2012, according to the BBC, making last year one of the warmest on record. The station, labeled North Pole 40, was responsible for monitoring the ocean environment and pollution as well as weather patterns.

Despite the recent spats over adoption bans and accused spies, relations between U.S. President Barack Obama and Russian President Vladimir Putin continue to improve. RIA Novosti reports that Russian National Security Council head Nikolay Patrushev hand-delivered a letter to the White House from Putin while on a two-day visit to Washington. The Russian Embassy took care to describe the meeting as a “business-like benevolent atmosphere...aimed at preparing further top-level contacts.” Both countries’ leaders will meet next on the sidelines of the 39th G8 summit in June. President Obama has said that if progress is made at the summit, he will make another visit to Russia ahead of the G8 summit in St. Petersburg this fall.

May 24:

Russian officials announced that Bashar al-Assad’s government agreed to participate in an international peace conference endorsed by both the U.S. and Russia. Even as Kremlin spokesman Aleksandr Lukashevich touted the regime’s interest in the “Syrians themselves finding a political path to a settlement,” however, he cited “complicating factors” undermining efforts to organize the conference. In part, the New York Times reports, the Lukasevich blamed the UN, which last week passed a non-binding resolution calling for a political transition to end the civil strife in Syria. The proposed conference, he argued, represents “a real chance to stop the bloodshed and suffering of the Syrians and ensure a peaceful, democratic future for Syria.”