Offshore gas intermediary companies in Eurasia

Stacy Closson and Charles Dainoff

Central Asian Survey, 2015, vol. 34, issue 1, 29-45

Abstract: Gazprom's utilization of offshore registration – or the moving of money across national boundaries for reasons other than of direct business benefit – has resulted in the creation of a web of subsidiary companies with opaque leadership and financial arrangements. Some of these subsidiary companies operate as intermediaries in the natural gas trade among the former Soviet states. Given that the gas trade within Eurasia has a long history of fixed contracts that move gas through a network of pipelines, why were intermediaries created, and why register them offshore? Using a critical reading of stateness as a space for transnational networks, and supported by mind-mapping software, we analysed the structure and operations of offshore gas intermediary companies between Russia and Central Asia dating from the break-up of the Soviet Union. We conclude that there were several purposes for using intermediary gas companies, from navigating trade among the newly independent states, to asset stripping, monopolizing markets, and obfuscating finance and ownership. However, the usefulness of intermediary companies to Gazprom may have expired, as a confluence of increased competition among suppliers, diversification of export routes, and economic stagnation has led to exporters and importers calling for their end.

Date: 2015
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DOI: 10.1080/02634937.2015.1008795

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