Leader among Russian companies in the EU and US markets

Despite the start of war in 2022, sanctions and restrictions, Russian goods continue to enter Western markets, and the profits from this and other Russian capital replenish the Western investment portfolio of their Russian owners.

Rosneft, Rosatom, Sibur Holding, EuroChem Group, Novatek, TMK, PhosAgro, SUEK, Norilsk Nickel, RusAl, Sberbank, X5 Retail, Tatneft, NLMK and many others are among the companies and funds that continue to operate in Europe and the US . These companies benefit from trade and strate­gi­cally invest their own resources and those of the Russian rich in Western companies, thereby strength­ening Russia’s repre­sen­tation.

While Russian companies and funds operate in all sectors of the economy, oil and gas exporters and the banks that serve them remain the main repre­sen­ta­tives.

Gazprombank

Gazprombank, Russia’s third-largest bank, is not subject to the strict restric­tions that many other Russian creditors face. It maintains control over trans­ac­tions in dollars and euros and continues to partic­ipate in the inter­na­tional banking messaging system SWIFT.

Europe still relies heavily on Russian natural gas and uses Gazprombank to pay for imported supplies. Western officials and experts say most European govern­ments do not want to punish the bank and risk a complete shutdown of natural gas supplies.

When the war began, European leaders had to reckon with long-standing depen­dence on Russian gas and oil. Gas has been a particular problem, with 34% of gas in the European Union coming from Russia in 2021.

According to EU data, the share of Russian gas in total imports fell from 40% in 2021 to around 8% in 2023. However, if liquefied natural gas (LNG), i.e. natural gas cooled to a liquid state, is included, the total share of Russian gas in the EU was 15% last year.

According to data provider Kpler, Russia is now the EU’s second largest LNG supplier. Russian LNG imports accounted for 16% of the EU’s total LNG supplies in 2023, which is 40% more than Russia sold to the EU in 2021.

Data for the first quarter of 2024 shows that Russian LNG exports to Europe increased again by 5% compared to the same period last year. Partic­u­larly large importers were France, Spain and Belgium. These three countries accounted for 87% of the LNG entering the EU in 2023. Gazprombank handles all financial trans­ac­tions related to LNG and natural gas. The company has repre­sen­tative offices in all major European countries as well as in China and India.

At the same time, the South African government is moving closer to partnering with Gazprombank Africa to convert the PetroSA Mossel Bay oil refinery into a gas-to-liquids facility. The aim of this cooper­ation is to restore the refin­ery’s opera­tions and ensure its self-suffi­ciency.

Gazprombank has not given up its media presence and continues to sponsor European football and other clubs partic­i­pating in the main champi­onships. Although the German club Schalke 04 (FC Schalke 04) broke off relations with the Russian company after the start of the war, Gazprombank remains the main sponsor of Crvena Zvezda from Belgrade, Serbia. In the current season of the Champions League, the team played games in Group G, where they played against Manchester City (Great Britain), RB Leipzig (Germany) and Young Boys (Switzerland), and all of their football players walked with a huge inscription Gazprombank on theirs Breast.

Sponsorship negoti­a­tions are currently ongoing between Gazprom and the Hungarian champions FC Ferenc­varos. And most likely, another club that takes part not only in the national champi­onship, but also in European tourna­ments, will wear the name Gazprombank on T‑shirts.

According to the company’s Luxem­bourg website, Gazprom­bank’s assets in Europe currently amount to more than 770 million euros.

However, Russian assets in the Western world are not limited to banks and companies based in the raw materials and heavy indus­tries. Invest­ments in the media sector are also actively increasing.

Russiamedia

Eugen A. Russ founded the company Russmedia in Austria in 1991 and brought together three family publishers that Russ has owned since 1919.

Since then, the company has grown inter­na­tionally and has branches in 15 European countries. Its assets include 65 brands, including 10 daily newspapers, 33 websites, television channels, radio and others. The board has now passed to Eugen’s son Eugen B. Russ.

In addition to its European focus, the company actively invests in Russian startups and supports them in entering European markets. Russme­dia’s invest­ments include PlanRadar, Coachhub, TIER Mobility SE and Pure. All of these start-ups have Russian origins and Russian owners, which were prevented from entering the Western economy due to the connec­tions of their investors and supporters to the Russian political elite or military industry.

Through the Speed­Invest fund, Russmedia invests in such companies to make it easier for them to access European consumers and avoid unnec­essary questions about possible sanctions.

In total, Russmedia has an investment portfolio of over $200 million, focused exclu­sively on the media and news sector.

Lukoil

Lukoil, one of Russia’s largest oil companies, has not been sanctioned and continues to supply its goods to European countries even after the start of the war in 2022.

Thanks to its network in Europe, which includes the Swiss trader LITASCO SA, the Swiss transport giant Eiger Shipping SA, the German oil producer Winter­shall Dea AG, as well as dozens of other companies in 19 European countries and even more in Asia and Africa, Lukoil continues to export products from Russia and expands its invest­ments worldwide.

Like Gazprom, Lukoil sponsors football clubs, including the Moldovan “Zimbru” from Chișinău and the Croatian “Hajduk” from Split.

Lukoil’s total value in 2021 was estimated at over $90 billion. But while other Russian oil giants in Western countries were forced to “lose weight” after 2022, Lukoil simply increased its invest­ments and capital.

However, it is not only gas and oil giants in Europe and the USA that continue to operate with money. These companies also include repre­sen­ta­tives of heavy engineering.

Transmashholding

Trans­mash­holding, the largest Russian company producing railway equipment, remains active in Europe and avoids sanctions.

The insider reports that before 2017, Bokarev and Makhmudov, owners of Trans­mash­holding, owned the Kalash­nikov defense concern together with Deputy Defense Minister Alexei Krivoruchko. Trans­mash­holding now controls 71% of the warship engine manufac­turer Kolomna Locomotive Works.

Trans­mash­holding also includes Luhan­sk­teplovoz, which was previ­ously regis­tered in Ukraine but has been included in the Russian register of legal entities since 2023.

According to the media, Trans­mash­holding is active in Europe despite tensions with the Russian elites and was not subject to EU sanctions.

Trans­mash­hold­ing’s main foreign office, controlled by Bokarev and Makhmudov, is located in Zug, Switzerland (where the company Trans­mash­holding Inter­na­tional AG is regis­tered). Trans­mash­holding also controls 50% of the Dutch companies Trans­mash­holding Alstom BV and Railcomp BV, which produce locomo­tives and compo­nents. In 2021, Trans­mash­holding regis­tered the engine manufac­turer Blue Engine Engineers GmbH in Germany.

you too own Riga Electric Machine Building Works, railway equipment manufac­turer DCD Rolling Stock in South Africa. Until last year, they owned a railcar manufac­turing company, Dunakeszi Jarmu­javito in Hungary (later Trans­mash­holding handed it over to a local partner).

When journalists discovered that 20% of Trans­mash­holding belonged to the French engineering company Alstom (which also owns shares in Luhan­sk­teplovoz through Trans­mash­holding), the company decided to divest itself of its stake due to the scandal. According to media reports, Alstom sold its 20% stake for 75 million euros, a relatively small amount for a stake in a company whose assets are worth over $2 billion.

Other major Russian players are engaging in broader invest­ments across all sectors, among which Renais­sance Capital stands out.

Renaissance capital

Renais­sance Capital is a Russian investment bank founded in 1995. It currently has offices in Moscow, Lagos, Nairobi, Cairo and Nicosia. Due to sanctions, the company was forced to close offices in London, New York and Johan­nesburg.

Since 2012, “Renais­sance Capital” has been part of the ONEXIM Group, one of the largest Russian private investment holdings owned by Russian billionaire Mikhail Prokhorov.

Despite the sanctions, Renais­sance maintains a huge portfolio of assets in Europe and avoids already imposed sanctions through legal loopholes. In fact, the company even survived the closure of offices at a profit and is now reopening them through legal programs and hedge funds.

Prokhorov recently announced the creation of a new fund with capital of $17 billion. The fund will be active in the areas of energy, nanotech­nology and mining research and devel­opment. The first invest­ments will go to Brazil, Mexico, India, Vietnam and China.

In 2021, Renais­sance Capital’s total assets and equity were $3.62 billion.