Gazprom to raise its own private army to protect oil installations

(2007-07-05) Carl Mortished

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July 5, 2007

Carl Mortished, International Business Editor

Gazprom will create its own private army after Russian lawmakers gave the gas utility and Transneft, the state oil pipeline monopoly, the power to create armed units to defend their installations.

A Bill passed yesterday by the Duma, the parliament’s lower house, would allow Gazprom and Transneft to recruit and arm their own security forces, giving them greater powers than private security firms. The move provoked a storm of protest against the creation of private armies within Russia’s largest corporations. Gennadi Gudkov, a deputy in the Duma who had opposed the Bill, called it a “Pandora’s box . . . This law envisages the creation of corporate armies. If we pass this law, we will all become servants of Gazprom and Transneft.”

Russia’s move to arm Gazprom has emerged as Nato begins to forge links with multinational oil companies. The organisation has offered Royal Dutch Shell and BP seaborne rapid response forces to defend oil platforms and installations from hijackers and hostage-takers.

The Bill – which has to be ratified by the Federation Council, the parliament’s upper house, and by President Putin to become law – will enable Gazprom and Transneft to create their own security force, instead of hiring external security guards to protect their installations. It envisages a force armed with handguns and pump-action shotguns.

Its supporters said that the two utilities needed greater power to protect pipelines from terrorist attack. Gazprom controls 153,000 kilometres of gas pipeline, linking gasfields in remote parts of Siberia to urban areas and to Europe. Transneft’s pipelines have come under attack in the Caucasus from separatist groups.

Alexandr Gurov, a Duma deputy who drafted the Bill, said: “A couple of terrorist acts and an ensuing ecological catastrophe would be enough to immediately declare Russia an unreliable partner and supplier of energy.”

However, the signs that the Kremlin is creating a private military force within Russia’s most powerful company will arouse concern that Gazprom is rebuilding a power base that extends beyond its role as a gas utility. The Bill allows the security force to be deployed only to protect infrastructure, but Gazprom’s pipelines provide vital links to Europe across sensitive borders with Ukraine, Belarus and Poland.

Nato is beefing up its activity in the energy sphere, with a view to providing emergency assistance to oil companies in Africa, Asia and the Middle East, according to Jamie Shea, director of policy planning for the organisation.

Speaking at a recent Chatham House energy conference in London, he said that oil companies were keen to receive help with intelligence. Attacks against oil pipelines are endemic in Nigeria and concern is mounting about the vulnerability of oil and gas installations in the Gulf.

“In Nato we are looking very actively at using our maritime resources to see how we can link up with oil companies,” Mr Shea said.

The organisation is in talks with the Government of Qatar about security for the vast liquefied natural gas projects under way in the Gulf state.