Despite the start of the war in 2022, sanctions and restrictions, Russian goods keep entering Western markets, and 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 profit from trade and strategically invest their own funds and those of the Russian wealthy in Western companies, thereby fortifying Russia’s representation.
While Russian companies and funds operate in all areas of the economy, oil and gas exporters and the banks that serve them remain the main representatives.
Gazprombank
Gazprombank, the third-largest bank in Russia, has not been subject to the strict restrictions faced by many other Russian creditors. It remains in control of transactions in dollars and euros and continues participating in the international banking messaging system SWIFT.
Europe still heavily relies on Russian natural gas and uses Gazprombank to pay for imported supplies. Western officials and experts say that most European governments do not want to penalize the bank and risk a complete shutdown of the natural gas supply.
When the war started, European leaders were forced to reckon with a long-standing addiction to Russian gas and oil. Gas was a specific problem, as in 2021, 34% of gas in the European Union came from Russia.
Jens Büttner / DPA Picture Alliance / Avalon
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), natural gas cooled to a liquid state, is included, the total share of Russian gas in the EU last year was 15%.
According to data provider Kpler, Russia is now the EU’s second-largest LNG supplier. Russian LNG imports accounted for 16% of total EU LNG supplies in 2023, which is 40% more than Russia sold to the EU in 2021.
Data for the first quarter of 2024 show that Russian LNG exports to Europe again increased by 5% compared to the same period last year. France, Spain, and Belgium were particularly large importers. These three countries accounted for 87% of LNG entering the EU in 2023. Gazprombank handles all financial operations related to LNG and natural gas. It has representative offices in all major European countries, as well as in China and India.
At the same time, the South African government is approaching a partnership with Gazprombank Africa to rejuvenate PetroSA Mossel Bay oil refinery into a gas-to-liquids plant. This cooperation aims to restore the refinery’s operation and ensure its self-sufficiency.
Gazprombank did not abandon its media representation, continuing to sponsor European football and other clubs that are playing 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 Serbian Belgrade. In the current season of the Champions League, the team played matches in Group G, where they played against Manchester City (UK), RB Leipzig (Germany) and Young Boys (Switzerland), and all their football players ran with a huge inscription of Gazprombank on their chests.
Right now, sponsorship negotiations are underway between Gazprom and FC Ferencvaros, the Hungarian champion. And most likely, another club that will play not only in the domestic championship but also in European tournaments will wear the name Gazprombank on T-shirts.
Currently, Gazprombank’s assets in Europe amount to more than 770 million euros, according to the company’s Luxembourg website.
However, Russian assets in the Western World are not limited to banks and companies based in natural resources and heavy industry. Investments in the media sector are also actively growing.
Russmedia
Eugen А. Russ established the Russmedia company in 1991 in Austria, combining three family publishers that Russ has owned since 1919.
Since then, the company has grown internationally and has offices in 15 European countries. Its assets include 65 brands, including 10 daily newspapers, 33 websites, TV channels, radio, and others. The board has now passed to Eugen’s son, Eugen B. Russ.
In addition to the European direction, the company actively invests in Russian startups and helps them enter European markets. So, Russmedia’s investments include PlanRadar, Coachhub, TIER Mobility SE and Pure. All these startups have Russian origin and Russian owners, who were blocked from entering the Western economy due to the connections of their investors and supporters with the Russian political elite or military industry.
Silas Stein / DPA Picture Alliance / Avalon
Through the SpeedInvest fund, Russmedia invests in such companies to help them gain access to European consumers and avoid unnecessary questions about potential sanctions.
Overall, Russmedia has an investment portfolio of over $200 million focused exclusively on the media and news sector.
Lukoil
Lukoil, one of the largest oil companies in Russia, didn’t get under sanctions and continues supplying its goods to European countries after the war started in 2022.
Thanks to its network in Europe, which includes Swiss trader LITASCO SA, Swiss transport giant Eiger Shipping SA, German oil manufacturer Wintershall Dea AG, as well as dozens of other companies in 19 European countries and even more in Asia and Africa, Lukoil keeps exporting products from Russia and expanding its investments globally.
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. However, after 2022, while other Russian oil giants in Western countries were forced to “shed weight,” Lukoil only increased its investments and capital.
However, not only gas and oil giants continue to operate with money in Europe and the United States. Among such companies are also representatives of heavy engineering.
Transmashholding
Transmashholding, the largest Russian company that manufactures railway equipment, keeps operating in Europe and avoids sanctions.
The Insider reports that before 2017, Bokarev and Makhmudov, Transmashholding owners, together with Deputy Minister of Defense Alexei Krivoruchko, owned the Kalashnikov defense manufacturing concern. Transmashholding now controls 71% of the warship engine manufacturer Kolomna Locomotive Works.
Transmashholding also owns Luhanskteplovoz, previously registered in Ukraine but has appeared in the Russian Register of Legal Entities since 2023.
According to the media, despite the tights with Russian elites, Transmashholding is active in Europe and didn’t fall under the EU sanctions.
The main foreign office of Transmashholding, 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 B.V. and Railcomp B.V., which are manufacturers of locomotives and components. In 2021, Transmashholding registered the engine manufacturing company Blue Engine Engineers GmbH in Germany.
They also own Riga Electric Machine Building Works, railway equipment manufacturer DCD Rolling Stock in South Africa. Until last year, they owned a railcar manufacturing enterprise, Dunakeszi Jarmujavito in Hungary (later Transmashholding passed it to a local partner).
When journalists discovered that 20% of Transmashholding was owned by the French machinery company Alstom (which also owns shares in Luhanskteplovoz through Transmashholding), the company decided to get rid of its stake due to the scandal. According to media reports, Alstom sold its 20% for 75 million euros, a fairly small amount for a stake in a company whose assets are valued at over $2 billion.
Other major Russian players are engaged in broader investments across 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 circumvents already imposed sanctions through loopholes in the laws. In fact, the company even survived the closure of offices with profit and is now reopening them through legal schemes and hedge funds.
Prokhorov recently announced the creation of a new fund with a capital of 17 billion US dollars. The fund will be engaged in energy, nanotechnology, and mining research and development. The first investments will go to Brazil, Mexico, India, Vietnam, and China.
As of 2021, Renaissance Capital’s total assets and equity were $3.62 billion.
