The WSJ has a long article based on an exclusive interview with your fave and mine, Igor Sechin. It is full of the usual his-lips-are-moving whoppers, but this one stunned even me, even as predisposed as I am to snort at pretty much anything old Eyegore has to say:
And he was quick to point out that Russia became a major oil exporter in the 1970s in response to demand in the West amid the Arab oil embargo. “Now they tell us, ‘You have Dutch disease, you’re a resource economy.’ But you yourselves asked us to be that way,” he said.
Sorry, but WTF is he talking about? Yeah, the USSR was just eager to please the US and the West in the early-to-mid 1970s. We said “jump”, and Brezhnev said “how high, boss?”
Please. The Soviets exported oil because (a) there was money in it, (b) they needed a lot of money, given that the rest of the economy was going to hell (especially the agricultural sector, which couldn’t feed the country), and (c) they had absolutely nothing else to sell that anybody wanted.
What is it about Russians that they are responsible for absolutely nothing? It’s always “The Devil (i.e., America) made me do it!” They are wanna be Masters of the Universe, but everything is out of their control. Sheesh.
Here’s another one from Putin’s Pinnochio:
Mr. Sechin is Moscow’s point man for warming relations with the Organization of Petroleum Exporting Countries. But he said Russia, the largest oil producer outside the cartel, isn’t ready to accept membership in the group, despite its pleas.
“It would be irresponsible for Russia to join OPEC because we can’t directly regulate the activity of our companies,” he said, as nearly all are privately owned. (Emphasis added.)
First, Russia taxes oil exports. It is perfectly feasible for Russia to regulate the activities of its companies indirectly through the oil export duty mechanism. Russia can achieve any level of exports it wants by adjusting the duty. And it has been adjusting it–downwards, thereby encouraging oil exports. (Maybe Sechin was quite deliberate in including the word “directly” in his answer, knowing quite well that this is an irrelevance, given the ability of the government to control exports via the tax mechanism, without directing companies to do anything.)
Second, “nearly all are privately owned”–except the one that is by far the biggest, Sechin’s own Rosneft. And, does he really expect us to believe, with Khodorkovsky in the dock, Mechel’s CEO Igor Zyuzin contemplating what Putin meant about “sending a doctor” (and given Russian healthcare, that is a frightening prospect), BP-TNK’s Dudley fleeing the country, etc., that if Putin or Medvedev told the owners/managers of these “privately owned” companies to cut exports, that they wouldn’t salute and ask “how much?”
Sechin repeated his call to segment and “gasify” the oil market:
Mr. Sechin called for a gradual but major overhaul of the international oil trade, adding tight regulation and longer-term supply contracts, eliminating “economically unjustified intermediaries” and reducing speculation. Russia is the world’s No. 2 crude exporter.
Russia doesn’t like open markets and price discovery. It likes market segmentation and backroom deals.
In the add insult to injury category, Sechin uttered these Orwellianisms:
Mr. Sechin hailed BP PLC’s TNK-BP Ltd. joint venture in Russia as a sign of Russia’s openness to foreign investment in the sector. But he singled out secretive Siberian giant OAO Surgutneftegaz as “Russia’s best private oil company.”
Investors have criticized Surgut for refusing to release international-standard financial accounts or details of its ownership structure.
Surely, from Sechin’s perspective, black hole Surgutneftegaz is indeed the ideal energy company. And yes, the whole BP-TNK fiasco is just a shining illustration of how an Investor’s Paradise has risen from the ashes of the former Worker’s Paradise. Orwellian, like I say.
I actually appreciate the fact that Sechin has become much more open. By speaking publicly, he reveals his utter mendacity, and in so doing, provides a revealing glimpse at the equally mendacious regime in which he serves.