As bankers, traders and investors gathered at Gazprom's London offices for its annual champagne reception, the message from the world's most powerful gas trader was clear: the Russians don't want another gas war with Ukraine.
The company, the Moscow bourse's biggest, lost over a tenth of its value on Monday as forces loyal to Russian President Vladimir Putin tightened their grip on Ukraine's Crimea region, rejecting the authority of a new pro-Western government in Kiev.
Gazprom, once the world's third most valuable stock, was now worth $84 billion, five times less than during the oil boom of 2008. Fund managers with billions invested wanted to know how long the bleeding would last.
"The political agenda is out of our control," Gazprom's export boss Alexander Medvedev told the gathering, among them the world's leading oil trader, Ian Taylor from British trading house Vitol. "But if you look at what kind of economic decisions were taken during the Cold War, you would really hope wise people will take the right decisions."
Hours earlier, U.S. Secretary of State John Kerry had condemned Russia's "incredible act of aggression" and threatened economic sanctions to isolate Moscow.
Medvedev couldn't resist a little gallows humour.
"Last but not least, we are undervalued, and it is probably the last chance to buy cheap," he concluded to uneasy laughter.
With more than 15 percent of global gas production and reserves, export revenues of $163 billion last year and control of a third of Europe's gas market, Gazprom dwarfs any energy company in the world.
And yet it is worth a fraction of U.S. oil major Exxon Mobil , which at $417 billion is the world's most valuable in the sector, as those who see Gazprom as a tool of Kremlin policy are deaf to its message of cost control and higher dividends.
Over the past decade, Gazprom, 51-percent controlled by the state, has twice cut its supplies to Ukraine over pricing disputes with Kiev. That action also cut supplies to the EU, which gets 50 percent of Russian deliveries via Ukraine.
Gazprom also helped the Kremlin nationalise Royal Dutch Shell's Sakhalin gas project as Putin re-established Russia's grip on the energy sector after predecessor Boris Yeltsin let it slip with the collapse of the Soviet Union.
Though Gazprom says it defends its economic interest in such disputes, they can cost billions of dollars in value and draw criticism from investors that it is a stick for Moscow to beat its neighbours.
STILL FLOWING
Many fear the next in a long line of such incidents could be another cut in gas flows to Kiev.
But 11 days after the ousting of Moscow's ally in Ukraine, President Victor Yanukovich, gas is still flowing, though Gazprom is threatening to hike the previously discounted price.
"If the Kremlin tells us to stop, we will stop the gas. But it is very different from 2006 and 2009," said one Gazprom insider, referring to previous gas conflicts with Ukraine.
Gazprom is effectively run by a trio - Medvedev and chief executive Alexei Miller, a close ally of Putin from their days working for the mayor of St Petersburg in the 1990s, plus chief financial officer Andrei Kruglov, also from St Petersburg.
The three men have fought many battles since coming to Gazprom in 2001 as part of a Putin-orchestrated reshuffle. The 2006 dispute was largely seen as a public relations disaster for Gazprom.
The West accused Moscow of using gas to punish an earlier pro-Western government in Ukraine, and said the dispute caused irreparable damage to customers' confidence in Russia as a reliable supplier. Gazprom said it cut supplies because Ukraine stole billions of dollars worth of gas, which Kiev denied.
In the next dispute, three years later, Gazprom hired Western PR consultants, took more time to explain its reasons to the EU and achieved what it internally views as a victory.
The EU applied pressure on both Ukraine and Russia, even though the order to cut supplies came from Putin himself.
Five years later, the mood at Gazprom is different.
"In today's dispute, gas isn't a weapon," one insider explained.
Gas supply contracts have been changed in the past few years such that Gazprom no longer sells its gas to Europe on the Russian-Ukrainian border, but on the Ukraine-EU border, which makes Gazprom responsible for getting it all the way there.
"Whatever the reason for a cut, Gazprom is the culprit," the insider said.
The weapon in any case would be blunted by the 40 billion cubic metres of gas the EU has in underground storage, a very comfortable level of around half of capacity. Germany, for example, has enough for about 60 days.
Jeffrey Woodruff from Fitch Ratings said he did not, for now, expect gas disruptions, but warned that the situation was more complicated than before.
"If it were to happen, it could take longer to resolve than during previous disruptions, because Gazprom was in control of the supply situation back in 2006 and 2009. This time, disruptions could possibly come from sanctions, which could take longer to resolve," he said.
DOUBLE-EDGED SANCTIONS
As Kerry spoke about sanctions, investment bank UBS issued a report headlined "The price of politics". It devoted large sections to the history of oil crises and sanctions, including the 1967 Arab-Israeli War and the 1973 OPEC oil embargo.
Some doubt it will come to sanctions, conscious, perhaps, that Russia is not without defences.
"Who do you sanction? Russian state companies? Does anyone remember they have over $200 billion worth of debt to Western banks?" one banker said.
Almost all Western banks are lenders to Gazprom, which has debt of $36 billion, some of it secured on export revenues.
Western energy partners are in no rush to sever ties, either.
Despite setbacks at Sakhalin, Shell remains Gazprom's partner in the project, calling it a very successful investment. BP said this week it "absolutely stands" by its Russian investments, and Exxon said it didn't see "any new challenges out of the current situation".
Some politicians believe the United States will now speed up gas export projects to help Europe cut reliance on Russia, while Europe, including Ukraine, will expedite shale gas projects.
"While Secretary Kerry may believe Russia is behaving in '19th-century fashion', the biggest threat to Moscow, in our view, may well be 21st-century shale technology," Bank of America Merrill Lynch said this week.
"With NATO military protection, European capital, and American technology, Ukraine could potentially become a competitive gas supplier to EU markets. After all, the pipeline infrastructure is already in place," the bank said.
Gazprom doubts Europe will repeat the U.S. shale successes, pointing to exploration failures in countries such as Poland. It says Europe will become even more dependent on Russian gas, and shale is unlikely to cover even a tenth of the continent's needs before 2030.
REAL WORRIES
Despite that confidence, sources at the company acknowledge a number of factors that make it deeply uncomfortable about a new gas conflict with Ukraine.
One of those factors is China. After 10 years of tough talks on price, it is closer than ever to clinching a deal to take Russian gas, but if Gazprom's supply to Europe is cut for one reason or another, China's hand is strengthened.
"Russia would come under bigger pressure to sell its gas. That gives China an advantage," said Chen Weidong, head of research with state oil group China National Offshore Oil Corp.
Inside Europe, Gazprom also has a major concern.
The company is keen to reach a compromise with the EU on the use of pipelines it has built to bypass Ukraine, such as Nord Stream under the Baltic. EU competition rules currently limit Gazprom to supply half the capacity fed by these lines, even though there are no competitors to supply the other half. It is expected to decide whether to relax that restriction by March 10, according to Medvedev.
That looks less likely against the backdrop of a new gas dispute, said IHS analyst Andrew Neff. The EU might also step up an ongoing probe into Gazprom's alleged anti-market behaviour in setting gas prices for customers in eastern and central Europe.
Konstantin Cherepanov, analyst at UBS, says history nevertheless gives reason for optimism.
"If you think about the cold war days, when political relations between the West and the USSR were terrible, the gas pipeline continued to work and gas kept flowing."
