Russian Oil Czar Reluctant to Change Buyout Offer

The Wall Street Journal       Gregory L. WHITE

Beyond his official post as chief executive of state oil company OAO Rosneft, Igor Sechin is a longtime confidant of President Vladimir Putin and widely seen as one of the most powerful people in Russia. So when his PR staff called the top editors of most of the country’s major newspapers late Friday night to summon them to an urgent briefing with him the next day, nearly all turned up.

But Mr. Sechin didn’t gather them at Rosneft headquarters in downtown Moscow to announce a new multi-billion-dollar deal with a global oil major or another giant project with customers in China. No, the reason he brought the editors, including two foreigners, out of bed on a Saturday morning was to respond to a complaint voiced a few days before by a small shareholder in one of Rosneft’s many subsidiaries.

Over the following two hours, ignoring the plates of fruit and Russian blini laid on the table, Mr. Sechin provided a window into the mindset of the man who runs the world’s largest publicly traded oil company by production.

He seemed less concerned about the substance of the shareholder’s complaint–the fund manager voiced a concern widely held in the market that Rosneft’s offer to buy out minorities was unfairly low–than the fact that the investor had taken it directly to Mr. Putin during a public question-and-answer session at an investment conference.

“This was an attempt to apply pressure, maybe even to manipulate the market,” Mr. Sechin said of the fund manager’s question to the president.

Russia's Energy Bully Takes a Fall

Alexandros Petersen       Foreign Policy

Just a few years ago, Gazprom had Europe eating out of its hand. But now, the energy giant -- and Putin's power base -- looks set for hard times.

After years as Eurasia's energy bully, Russia's state-controlled natural gas monopoly, Gazprom, is getting a taste of its own medicine. Even as Gazprom seeks to build the tallest skyscraper in Europe as its new headquarters in St. Petersburg, pressure from Russia's neighbors led to a 15 percent decline in the company's profits last year, eating into the state budget. Moscow's single-minded focus on gas exports in an effort to become, in the words of President Vladimir Putin, an "energy superpower" has crippled its ability to adapt to profound changes in the global energy landscape -- from the shale gas revolution in North America to the dynamism of new market players such as Azerbaijan. Having spent the last decade making enemies in Central Europe and Central Asia, Gazprom and Russian decision-makers are now reaping what they have sown. 

Policymakers in European capitals could be forgiven for a little schadenfreude right now. Building on the legacy of Soviet gas exports to the Eastern Bloc and parts of Western Europe, Putin and his cohorts in the Kremlin have, for years, used Gazprom as a cudgel in Moscow's relations with European Union member states. Over the past decade, well over a third of EU gas imports have come from Russia, with a number of Eastern European states almost completely dependent on Gazprom. Bulgaria, for example, receives more than 95 percent of the natural gas it consumes from the company. Millions of European consumers shivered through the winters of 2006, 2008, and 2009 when Gazprom cut off supplies in order to squeeze middlemen in Ukraine, Belarus, Georgia, and Moldova who had had the temerity to buck Moscow's policies.

The Turkey - Russia - Iran Nexus: Eurasian Power Dynamics

Stephen J. Flanagan      The Washington Quarterly

Complex and often contradictory interactions among Turkey, Russia, and Iran are shaping regional dynamics in the Middle East, Caucasus, and Central Asia. The nexus of the three pairs of relations are influencing each country’s dealings with the other two, as well as with the United States, and are whipsawed by events on the ground that continue to surprise leaders of these three historic rivals. Starkly differing policies toward the Syrian civil war and the Arab Awakening have strained Ankara’s previously cooperative relations with Moscow and Tehran.

Understanding these dynamics is essential to avoiding a wider war in the Middle East, renewed conflict in the Caucasus, and instability in Central Asia following the withdrawal of NATO forces from Afghanistan. Moreover, with the proxy war in Syria deepening and the prospect of Israeli military strikes against Iran’s nuclear facilities, the Middle East is reaching a tipping point unless the United States and the international community are able to work with these three powers to broker a political transition in Syria and a resolution of the Iranian nuclear crisis, which would otherwise have devastating consequences for regional stability and the global economy.

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Source: The Washington Quarterly

Turkey’s Role in European Energy Security

Dr. Mehmet Efe Biresselioglu*   Natural Gas for Europe      

Ankara’s geography can help boost European energy security

An expert in European geopolitics in the Department of International Relations and the EU at Turkey’s Izmir University of Economics, Dr. Mehmet Efe Biresselioglu contended that there were some basic problems with European energy policy.

“The political reality of the European Union changes when it is faced with energy issues,” he explained. “The EU is divided into two different poles: there are the national decision making centers on one hand, and the EU institutions with powerful transnational political resources on the other. So basically in spite of the liberal inter-governmental setting, and fully integrated political policies, these two different poles mean that the EU is divided over a common energy policy.

“The main obstacle to progress in energy policy is basically the various preferences of the member states, all of which have their different domestic energy resources, different energy requirements and large, state-owned, monopolistic energy industries. All the states have different preferences.”