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Rem Vyakhirev; billionaire led gas company

“I never wanted to be the head of a company. But why refuse if the entire business is in your hands? If you give it to somebody, they would either drink it away or lose it,” said Rem Vyakhirev former head of Gazprom.

Associated Press/file 2000

“I never wanted to be the head of a company. But why refuse if the entire business is in your hands? If you give it to somebody, they would either drink it away or lose it,” said Rem Vyakhirev former head of Gazprom.

MOSCOW — Rem I. Vyakhirev, who as chief executive of the huge Russian energy company Gazprom during the 1990s resisted efforts by reformers to break up and privatize it, only to end his tenure a billionaire owning valuable pieces of the company himself, died Monday. He was 78.

His death was confirmed by a Gazprom spokesman, who did not provide the cause or place of death.

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Early in the post-Soviet period, Mr. Vyakhirev seized on the possibilities of exploiting the sheer power and scale of the Russian natural gas industry — both for the government and for private enrichment.

His career spanned the transformation of what had been the Soviet ministry of gas into the world’s largest natural gas company. By the time he left Gazprom, in 2001, forced out in a din of criticism about missing assets, Forbes magazine estimated his net worth at $1.5 billion.

All along, though, Mr. Vyakhirev, reflecting a strange cognitive dissonance that characterized his career, espoused the benefits of state ownership of natural gas fields and pipelines. Gazprom, which is controlled by the Russian government but is 50 percent owned by private investors, remained whole while the Russian oil industry was divided and sold piecemeal. The company supplies about a quarter of all gas consumed in Europe today.

‘‘The gas industry should be in one pair of hands, in state hands,’’ Mr. Vyakhirev said in September in an interview with the Russian edition of Forbes. ‘‘There’s all this talk about gas being an addiction, how to get off the gas needle. That’s ridiculous. Gas is a wet nurse, not a needle.’’

Rem Ivanovich Vyakhirev was born in a village in the Samara region of southern Russia. His given name is an acronym evoking socialist progress: Revolution, Engels, and Marx.

By the late 1980s, he had risen to deputy minister of gas in the Soviet Union. He assumed control of Gazprom in 1992, when his patron, the former minister of gas, Victor S. Chernomyrdon, was appointed prime minister under President Boris N. Yeltsin.

Mr. Vyakhirev and a tight group of associates held sway over Gazprom’s assets, including whole towns in Siberia. The company became an island of the old Soviet system in the new Russia, known as a state within the state, a paternalistic monopoly with tens of thousands of coddled employees.

The company’s wealth and size made Mr. Vyakhirev one of Russia’s most powerful men. He was able to shrug off efforts by the tax ministry to collect billions in arrears from the company in the mid-1990s. He also aided the state by informally ladling out funds from the corporate budget.

Yevgeny Yasin, the minister of economy at the time, recalled Mr. Vyakhirev’s eagerness to help the government on such projects as rebuilding a cathedral in Moscow.

‘‘He always helped,’’ Yasin said, as quoted by Public Post, a news website. ‘‘Gazprom was a second budget, in fact an ‘extra pocket’ for the government, to be used during especially difficult situations.’’

All the while, beginning with a quiet deal soon after the company’s founding that allowed company executives to buy as much as 30 percent of Gazprom shares at auctions they controlled, pieces of Gazprom slipped away to nonstate entities.

Public documents and financial records later showed that some assets went to Mr. Vyakhirev and members of his family, a sign of the loose ways of early Russian capitalism. One deal, for example, transferred about $185 million in gas fields to Sibneftegaz, a unit partly owned by Mr. Vyakhirev’s relatives.

As pressure mounted to oust Mr. Vyakhirev, Boris Fyodorov, a former minister of finance, disclosed that tens of billions of dollars’ worth of gas sales from Russia to former Soviet countries such as Ukraine went through Itera, a trading firm in Jacksonville, Fla., and partly owned by Gazprom managers.

President Vladimir V. Putin, in consolidating political control over Russia early in his first term, ousted Mr. Vyakhirev in 2001 by having government appointees on the board cancel his contract. Mr. Vyakhirev stayed on as chairman for a year. The new director, Alexei B. Miller, then set about unraveling the old management’s insider deals.

Gazprom’s stock rallied for a time before the global recession, but has been in a swoon for years. The company is losing market share in Europe because of price pressure from the gas industry in the United States.

Mr. Vyakhirev leaves a son, Yuri, and a daughter, Tatyana.

In the Forbes interview last year, Mr. Vyakhirev said he had taken up hobby farming in retirement.

‘‘I never wanted to be the head of a company,’’ he said. ‘‘But why refuse if the entire business is in your hands? If you give it to somebody, they would either drink it away or lose it.’’

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