Viktor Zubkov, left, and Alexei Miller, right, after the Gazprom shareholders' meeting on Friday [AFP]

"I will be consistently defending the state interests... It's important to have a balance between the interests of the state and the company's development," Viktor Zubkov said after a shareholders' meeting in Moscow.

The appointment of Zubkov, a long-term ally of Vladimir Putin, Russia's prime minister, comes just weeks after Dmitry Medvedev took over from Putin in the president's post.

Zubkov is to retain his government position while serving as chairman of Gazprom.

Putin control

A former Soviet state farm boss, known for his no-nonsense style, Zubkov rose through the bureaucratic ranks before working with Putin and Medvedev in Saint Petersburg city hall after the collapse of the USSR in 1991.

Zubkov served as Russia's deputy finance minister and the head of a government agency to combat money laundering before becoming prime minister between September 2007 and March 2008, when he was replaced by Putin.

His Gazprom appointment completes a reshuffle in the upper echelons of Russia's elite that has given Putin's allies overwhelming control over political and economic life in the world's biggest energy power.

Zubkov will manage a sprawling Soviet-era company that controls a quarter of the world's gas reserves, accounts for around eight per cent of Russia's GDP, and is the main foreign gas supplier to Europe.

Medvedev, another Putin protege and the previous Gazprom chairman, was credited with turning the company into one of the most highly capitalised firms in the world by allowing foreign share ownership during his time as chairman.

Government links

Meanwhile, Gazprom's chief executive said on Friday that its ties to the government give it a huge growth potential.

Alexei Miller told the shareholders' meeting that the company was in a better position to compete on the international energy markets as its links to the government would help it to secure the rights to develop new strategic oil and gas reserves.

"The growing competition for possessing hydrocarbon reserves leads to the fact that companies with state participation have significant advantages in securing dominant positions on international markets,'' Miller said.

"Today the most relevant investment idea in the energy sector is to invest together with the state.''

Miller said that Gazprom, whose market capitalisation has grown by 44 times since 2000, is still undervalued and will eventually outgrow its competitors and other global business leaders.

He said the company had ample potential in terms of oil and gas reserves, means of exploration and production and development of its vast pipeline network.

“Neither our competitors in the sector nor world business leaders in general have that kind of potential for growth,'' Miller said.

In an interview with the Financial Times published on Thursday, Miller said that in the coming years Gazprom would become "the most influential in the energy business,'' adding that its target was to reach a market capitalization of $1 trillion.

Miller also announced an initiative to work with European partners on a joint project of creating a large network of natural gas filling stations for automobiles across Europe, as an alternative to oil.

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