Equidistant from Motherland - 19 December, 2002 - News

Does Russia’s fate still depend on satisfaction of home-made oligarchs’ ambitions?

Two weeks ago, in Moscow, a sitting of Russian Security Council under President Vladimir Putin chairmanship took place. The sitting was devoted to the building of Russia-China gas pipe-line (the agreement was reached by Mikhail Kasyanov while visiting China late summer). The question about the pipe-line building was also discussed during the Vladimir Putin visit to Beijing. Russian media reported practically nothing about the decisions taken by the Security Council. However, just after the sitting, Vladimir Putin said the pipe-line Angarsk-Datsin would not be built. Instead, the pipe-line will be laid to the city of Nakhodka or any other Russian harbour. Therefore, Russian Far East will be guaranteed from chronic lack of oil.

According to the Izvestiya newspaper, at the Security Council sitting, the decision about changing the marchrute of Russian oil transportation from East Siberia to Pacific harbours was really taken at the Council sitting. Though, just after that, all technicoeconomic substantiation documents were handed over to different Russian institutions to be perfected. As it turned out, the decision to change the pipe-line marchrute put under question further partner relations between Russia and China. Then, the Chinese state oil company CNPC declared its decision to participate in the auction on the Slavneft company privatization.

The participants of the Security Council sitting say Vladimir Putin personally decided to change the marchrute of the pipe-line, spite Chinese interests becoming seriously damaged as a result of this decision. According to the President, the fate of Russian Far East citizens are more important.

At the Council sitting, the President expressed his dissatisfaction with the fact, that the decisions on pipe-lines from East Siberia to Far East had been passed by interested persons from some institutions, said Sergei Darkin, governor of Seaside Region, to the Izvestiya newspaper. President Putin insists on laying all pipe-lines to Russian Far-East harbours. This position of the Russian President is confirmed by his plenipotentiary to Far East, Konstantin Pulikovsky. According to him, this decision is the most important event within 2.5 hears of his being in office.

Russian experts on external economics who prepared the Vladimir Putin visit to China were very surprised to know about the pipe-line marchrute change. According to them, no changes were planned the day before the visit to China. Moreover, before the visit, Putin discussed building of the first “private” pipe-line (Russian oil company Yukos plans to build it) to the Chinese city of Datsin. On the other hand, the experts do not keep back the fact, that supporters of the “Far-East project” have now majority in the government. While governmental functionaries prefer to keep silent till one of the parts wins.

The question is that the Angarsk-Nakhodka pipe-line (or Angarsk-Vladivostok pipe-line) was planned to be built by the Russian state monopoly Transneft. This decision is actively supported by Far-East authorities, who lobby this project in the government and in the presidential administration. While Angarsk-Datsin pipe-line should be built by the Russian private company Yukos which belongs to the most powerful oligarch of Yeltsin’s epoch, Mikhail Khodarkovsky. And Yukos practically agreed with Chinese government and lobbied approving of this project at the very top of Chinese authorities. While, all these agreements were reached in the framework of arrangements on hydrocarbon supply to China for next 25 years.

In fact Yukos is really the most advanced Russian companies with very powerful position in the foreign market and with a positive image in the West. So, while taking care of Russian Far-East citizens, President Putin infringed not only upon oligarch Khodarkovsky’s interests, but also upon the Russian capitalism flagman proud. As for the state company Transneft, there is nothing to say here. Today, it is obvious, that almost all Russian state structures (spite too often sabotage cases) are consolidated for tasks, which are fixed by the President himself. While Prime Minister Mikhail Kasyanov mostly lobbies not the state interests, but that ones of Russian oligarch capital. There is no unanimity in the government, the newspaper Izvestiya states, which possesses the minutes of the Energy Ministry sitting, headed by the minister Igor Yusufov. According to the conclusion of Siberian Section of Russian Academy of Science, there are not enough resources for two oil-pipes. In the meanwhile, Transneft demanded from the government to carry out state expert examination on both projects – of theirs and of that one of Yukos. As for the results, they are predictable.

Energy Ministry, having considered all “for” and “contrary,” ordered to the interested parts to determine themselves with oil supply on both projects till January 20, 2003. According to the Chinese project, Russia must supply 30 million tons yearly. Yukos guarantees 20 million tons at the expense of its own extraction. Russian Foreign Ministry was charged to finish the expert examination and by March 2003 to prepare a new variant of governmental agreement between Russia and China, including guarantees on long-term oil supplies. So, and what “solid residual” is there? Building of pipe-line to Russian Far East will in the prospect open to Russia an access to numerous potential markets: Japan, Korea, and others. Investment sources are also more various. Moreover, the pipe-line will be fully controlled by Russia (the Transneft company) and the possible deductions to Russian state treasury are also more, than what Yukos could offer. At least, the distance from Nakhodka to US shores is not so long.

While Angarsk-Datsin pipe-line fully corresponds with Chinese interests. The Chinese who need now more and more oil hardly will agree to giving some part of the supplied oil to their economical (and sometimes political) competitors in Asian-Pacific Region. Moreover, the Chinese part of the pipe-line will be under full Chinese control. Therefore, the whole East-Siberian oil complex will be the Great East Neighbour hostage. In other words, the whole Russian potential oil export to Asia will be in fact handed over to Chinese leadership. While this hardly corresponds with economical security of Russia. This is what the Russian President tried to convince of the participants of the Security Council sitting. Though, as well known, the clearest things are the most hard to explain. In the meanwhile, energetic lobbyist activity of Yukos caused conclusion of Russian-Chinese agreement about building the Russia-China pipe-line. Chinese part even promised to Yukos to partly finance the pipe-line building. In other words, the parts have gone too far, and the Chinese hardly will refuse from what was promised to them without international scandal.

While Yukos seems to have no ways to step back. This is probably why, Chinese media close to the CNPC company leadership reported yesterday CNPC refused from fight for Slavneft company in exchange for guarantees of the Russian government to build Angarsk-Datsin pipe-line.

Once, having become President, Vladimir Putin said the oligarchs should be equidistant from authority. Though, now one could say oligarchs are too distant. When oligarchs are before the authority eyes, the authority can hinder them from satisfying their greed. Though, when the authority looks to another side, oligarchs can do what they want, including reaching agreements with foreign states against their own. It is probably high time to take again control over oligarchs. While the dissatisfied oligarchs could be exiled to London, to keep Mr Berezovsky company.

Dmitry Slobodyanyuk PRAVDA.Ru

Translated by Vera Solovieva

Read the original in Russian: http://www.pravda.ru/1/last_news_2.html