SPIEGEL: Mr. Miller, two and a half years ago, you said that you wanted to make Gazprom the most valuable company in the world. Instead, the company's market capitalization has actually fallen from $300 billion to $130 billion. Are the wonder years behind you?
Miller: Our shares have risen in value by 35 percent in the last six months alone. That's no small amount. So, no, the wonder years aren't over for Gazprom. They're over for financial capitalism based purely on paper securities. We spoke about a $1,000 billion stock-market value in early 2008. But that was before the global financial crisis -- in other words, based on the coordinates system of this paper financial capitalism. That system is now discredited.
SPIEGEL: That may well be true, but even your long-time German partner, energy utility E.on, seems to have lost its faith in the future of Gazprom. Executives there want to sell E.on's 3.5 percent stake in your company.
Miller: Businesses buy and sell stakes for a number of reasons. Gazprom is no exception. But we don't do it based on how sustainable these companies are.
SPIEGEL: So why is E.on selling its stake in Gazprom?
Miller: E.on probably has internal reasons for its decisions. E.on is free to buy and sell shares in Gazprom, the world's largest gas company. We have 580,000 kilometers of pipelines, 33.6 trillion cubic meters of gas reserves and long-term supply contracts for 4.3 trillion. The state holds a majority stake, but 49 percent of the shares are freely available. Whoever wants to can buy 5, 10 or 20 percent of these pipelines and reserves. Unfortunately, the same thing can't be said for Gazprom in Europe ...
SPIEGEL: ... where it is always a problem when Gazprom shows interest in another company.
Miller: A while back, it emerged that Gazprom was supposedly interested in acquiring a stake in British energy company Centrica. You should have seen the uproar in the British press and parliament! That happens again and again.
SPIEGEL: Is the rumor that you want to acquire a 49 percent stake in the Ruhrgas subsidiary of Germany's E.on true?
Miller: Another rumor. And again it's all about not letting the Russians get involved. So much for the open market in Russia or in Europe.
SPIEGEL: So what's the truth to the rumors?
Miller: I don't want to talk about specific companies but rather about our strategy. We are guided by one simple principle when it comes to acquisitions and investments. We position ourselves as a global energy company with an integrated vertical network from exploration and extraction to transport, storage, marketing and distribution right down to the end consumer. And we want to achieve that on different continents. E.on, Ruhrgas, BASF and our Italian partners such as Eni are part of that network. Investments for us aren't financial transactions. They're part of our strategy ...
SPIEGEL: ... which Ruhrgas would fit into very nicely.
Miller: No one has proposed anything to us.
SPIEGEL: Gazprom's market has fundamentally changed. Thanks to new exploitation and transportation techniques, there is suddenly a surplus of gas. Customers like Ruhrgas could buy ahead more cheaply on the spot markets, but because of long-term supply contracts find themselves forced to pay a higher price to Gazprom. Has that tarnished your relationship?
Miller: The gas price reached $350 on the spot markets in December. The average price of Russian gas for Germany (in 2010) has been $308. Plus we're speaking about different products if we mean the spot markets on the one hand and long-term supply contracts on the other. You can't buy a three-year contract on the spot markets. What's important for the consumer isn't so much the absolute maximum price paid as much as stability and sustainability (of supply).
SPIEGEL: At times, the difference in price was as much as 50 percent, which led to tough negotiations on reductions in prices with your customers.
Miller: In December, the price was even higher than for gas for long-term contracts which are linked to the oil price and are absolutely predictable. And we stuck to our agreements even when prices on the spot market were a lot higher.
SPIEGEL: But E.on is losing customers because they consider the prices too high.
Miller: We love and respect our customers. But they are concerned about their own profits and not the price for the end consumer. Of course, nobody wants reduced profit margins. It's the market that decides what the consumer pays. Gazprom's share is never higher than 50 percent. The rest is made up of the local partner's profits, transport costs within Germany and taxes.
SPIEGEL: In reality, why in your supply contracts is the gas price still linked to the oil price so that it rises even when demand is low?
Miller: Because gas isn't a classic stock market commodity like oil, for example. In the future, gas will also be used much more widely as a synthetic, liquid fuel. Two of our research centers are working on this technology. If we look at the calorific value of oil and gas, gas is considerably cheaper than oil. All the large gas producers -- not just Gazprom -- say that the gas price should be based on its calorific value.
SPIEGEL: Nevertheless, many experts believe that, due to increased supply, the price for gas on the spot market will remain low in the long term. Does that mean the construction of a number of new pipelines to transport gas from the East to Europe will turn out to be gigantic bad investments?
Miller: We work on a simple basic principle. We sell the gas first and then we extract and transport it. All the gas destined for the Baltic Sea pipeline (Nord Stream) has already been sold in long-term supply contracts. So the pipeline is 100 percent full. We will deliver 55 billion cubic meters of gas a year.
SPIEGEL: The Baltic Sea pipeline was originally intended to cost 4 billion ($5.31 billion), but now there's talk of it costing 8 billion. Is it still worth constructing?
Miller: The overall costs haven't increased since March 2008. They come out at 7.4 billion. That's an efficient investment. The Baltic Sea pipeline belongs 50 percent to Gazprom, and 50 percent to our European partners. It's our joint pipeline and doesn't pass through transit countries. That means we don't have to pay any transport costs to anyone. Our 50 percent of the costs are roughly equivalent to the amount of money we lost in just a few days during the gas crisis with Ukraine.
SPIEGEL: Does that mean gas in Germany will get cheaper?
Miller: You know very well that the gas price isn't set by the construction of a pipeline.
SPIEGEL: So your profits will only increase ...
Miller: ... as will those of our partners. Neither Gazprom nor our European partners set the price; that depends on the price of oil. So the matter of the fairness of gas and oil prices is actually a matter of the fairness of financial capitalism.