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The Coming Hurricane: Russian Energy-Giant Gazprom Is Creating An Army

By Ariel Cohen, Alum of The Fletcher School of Law and Diplomacy at Tufts University

Ukrainian intelligence has reported that Russian energy giant Gazprom is establishing its own private military company (PMC). The rationale for an energy company establishing a security force is at least vaguely plausible given the need to defend fixed assets in trouble spots. Western energy companies like Exxon and BP do the same. However, Gazprom is not establishing a private army to guard a few remote wells or pipelines, or even to be sent to Ukraine. Gazprom’s move is likely about control over valuable energy resources inside of Russia, but more generally, a scramble for power.

Russia has a dizzying array of PMCs, militias, paramilitaries, and other ambiguously classified armed groups. Ironically, PMCs are technically illegal in Russia, but this does not matter much in a country which has a glorious tradition of flaunting the rule of law. The now-sanctioned Night Wolves (A Hells-Angel-esque motorcycle gang) played a major role in seizing the Crimea in 2014, and has morphed into a Kremlin-backed militia. The infamous Wagner Group has made headlines for its recruitment of prisoners to fight in Ukraine while its mercenary work in Sub-Saharan Africa and Syria. Russia has armed groups for every occasion, but it may become its poisoned chalice and the country’s undoing.

Here’s why: through PMCs, Russia can expand its influence worldwide, conduct intelligence operations, acquire economic opportunities, and advance its political interests. PMCs serve many functions including combat, intelligence, disinformation, propaganda campaigns, cybersecurity services, and physical and hybrid warfare. In a pinch they can be used to eliminate political enemies. Currently only Wagner is operating in Ukraine, although elements from multiple armed groups have been documented or transferred between groups.

Russia Launches New Offensive In Eastern Ukraine As Protracted Conflict Continues
BAKHMUT, UKRAINE – FEBRUARY 14: Ukrainian soldiers look towards Russian positions on February 14, … [+]GETTY IMAGES

This proliferation of armed groups also has an important domestic function. It is a conscious coup-proofing strategy known as “parallelism”. Parallelism involves the creation of alternative armed institutions loyal to political leaders which compete with the regular army. Rome’s Praetorians, Nazi Germany’s Waffen SS, and Saddam Hussein’s Republican Guard are a few of the most notable examples. They are a staple of authoritarian regimes fearful of change from within. It was long observed that repressive undemocratic regimes spend more on domestic security forces than on regular military. The rationale is simple: first, “we the people” is a greater threat to the regime and the leader than foreign enemies, and second, disparate armed groups allow leadership to pit them against each other and hold onto ultimate power. The risk: such armed groups perform less well in war and their disagreements or disobedience run the risk of a civil war and may accelerating the decline of a state.

Coup-proofing has long been present in Putin’s Russia and it is not just restricted to bikers or mercenaries. In 2016 Rosgvardia was founded as a “national guard” to supplement the Russian military. In practice, it competes with the regular army on every level, operated separately during its disastrous early push on Kyiv, and now competes with all the other groups for recruits. Wagner and Kadryov Muslim and ethnic Chechen Ahmad Force have accompanied the Russian military into Ukraine.

Gazprom received approval under the rationale that the company would be securing its energy sector resources in a time of uncertainty and protecting against sabotage. This is ironic given that Russia has brutally attacked plenty of Ukrainian energy targets and may have been involved with blowing up NordStream pipeline in the fall of 2022. Irony aside, as Gazprom serves as Putin’s “deep pocket”, this action implies an increasing fear on the part of Putin and Gazprom’s leadership of other actors moving against its resources.

Gazprom’s CEO Alexei Miller is a key member of an elite class of oligarchs with strong connections to Putin. Miller is a public and bitter rival to Wagner owner and CEO Evgeny Prigozhin whom he publicly called “the Kremlin’s caterer”. Prigozhin is embroiled in a vicious and public conflict with Minister of Defense Sergey Shoigu.

Russian President Vladimir Putin Meeting With Military Commanders
SOCHI, RUSSIA- NOVEMBER,10: Russian President Vladimir Putin (L) listens to Gazprom CEO Alexei … [+]GETTY IMAGES

Miller is also a rival of a powerful Putin’s insider Igor Sechin, himself a former KGB officer like his patron. It is not the only rivalry within Putin’s inner circle. None of the leaders of the various armed groups appear to be on good terms with each other, the regular army, or the various internal security services in Russia. Like Stalin’s or Hitler’s inner circle (or a royal court), they jostle for Putin’s favor while attempting to ward off rivals.

Gazprom’s new private army is not a flash in the pan. Investing in soldiers, ammunition, and other resources will be expensive and require long-term planning. Gazprom is keenly aware that it will have to compete with various other groups and the regular army for recruits and equipment, even if it is paying top dollar. It would only do so if the stakes were high. They are: Gazprom’s private army will allow it to take a more active role inside and outside of Russia in pursuit of securing energy sources and the Kremlin’s revenue.

All other calculations aside, this private army will also do something personally invaluable: provide Alexei Miller with a means of physically securing his own persona, Gazprom’s wealth, and deterring rivals. If things were going well, Gazprom and Miller would not have to take such drastic actions. Whatever the actual cause, it is a symptom of Russia’s fraying condition.

The Russian invasion of Ukraine has already proved to be a strategic disaster. Putin is rattling the nuclear arsenal again to scare the West and force a settlement on his terms. Russia’s sustained economic, human, and capital losses for the conflict would render it a pyrrhic victory. Russia’s best and brightest are fleeing the country, its deficit is now at World War levels, the European market is gone for good, and Asia has been unable to replace it.

Gazprom’s new army may be a lifeboat for the coming storm. It is highly unlikely to secure and save the assets of the largest gas company on the planet.

This piece is republished from Forbes.

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