April 13, 2018 / 4:22 PM / 8 months ago

U.S. sanctions will push Gazprom CEO into shadows: analysts

MOSCOW (Reuters) - Alexei Miller, head of Russian gas giant Gazprom, will have to lower his public profile and delegate to someone else his powers to clinch deals and raise financing now that he has been added to a U.S. sanctions blacklist, analysts said.

FILE PHOTO: Alexei Miller, chief executive of Russia's top natural gas producer, Gazprom, attends a news conference after an annual general shareholders meeting of the company in Moscow, Russia June 26, 2015. REUTERS/Sergei Karpukhin/File Photo

Washington last week imposed sanctions against several Russian businessmen, companies and government officials, striking at associates of President Vladimir Putin to punish Moscow for a range of activities, including alleged meddling in the 2016 U.S. election.

While Gazprom was not affected, Miller himself was added to the so-called Specially-Designated Nationals List, which bars U.S. individuals and entities from having any dealings with him. Firms outside U.S. jurisdiction can be punished if Washington deems they are helping a sanctioned entity.

“It is possible, that to soothe the worries of the European partners, Miller will have to delegate his powers to an attorney,” Fitch Ratings analyst Dmitry Marinchenko said.

Gazprom did not respond to a request for comment. Miller said last week he was proud to be included on the sanctions list.

Gazprom has no direct tie-ups with U.S. firms, but it has a web of commercial relationships in Europe, where it supplies around a third of the bloc’s natural gas needs.

Uniper, Shell, Engie, OMV and Wintershall are among Gazprom’s key European partners.

“Technically speaking, unlike for U.S. persons, foreign persons from the EU can meet and negotiate with Mr Miller short of signing anything material for their companies and Gazprom,” George Voloshin, from Aperio Intelligence consultancy in Paris, said.

“But, since we are walking a very fine line here in terms of jurisprudence, they will most likely prefer the safest option, excluding Mr Miller from all business-related dealings,” he said.

Miller worked with President Putin in the St Petersburg city administration in the early 1990s, when Putin was an advisor to the mayor. Miller has been at the helm of Gazprom since 2001.

Gazprom’s annual investments are almost 1.3 trillion roubles ($21 billion), while its international borrowings total around 0.5 trillion roubles, the largest among all Russian companies. According to Fitch, in 2018-2019 Gazprom will have to redeem $20 billion of debt.

Reporting by Oksana Kobzeva; writing by Vladimir Soldatkin and Polina Devitt; Editing by Robin Pomeroy

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