Beet
Atlas Star
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« on: December 28, 2005, 02:17:38 PM » |
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A trend reminiscent of the nationalization campaigns of the 1950s and 60s...
By Fred Weir, Correspondent of The Christian Science Monitor
Wed Dec 28, 3:00 AM ET
To date, the Kremlin has effectively renationalized almost a third of the formerly private oil-and-gas sector. Other developments also point to growing state ambitions:
• A $15-billion Siberian pipeline, due to begin pumping in 2008, will shift Russian crude exports to Asia, particularly China, where Moscow is cultivating fresh strategic relationships.
• A 737-mile gas line being laid under the Baltic Sea will cut out middlemen Ukraine and Poland, whose relations with Moscow have recently soured, while locking in Russia as Western Europe's key energy supplier.
• State-run Gazprom has teamed up with several foreign partners to develop a vast Barents Sea gas field whose production, converted to liquefied natural gas (LNG), could begin supplying the US market by 2010.
• A long-delayed law on subsoil resources, to be passed by the Duma next year, is expected to ban foreign-owned companies from exploring or developing Russian oil fields and other key mineral resources.
"Amazing changes are happening swiftly, because Putin has understood that energy is Russia's key card to play at the international table," says Michael Heath, a political analyst with Aton, a Russian brokerage. "Instead of the military force the Soviet Union used to project its power, Russia is using oil as a major tool of foreign policy."
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"The new rule is that not less than 50 percent must belong to the state," says Nikolai Nikitin, editor of Neftegazovaya Vertikal, a Russian petroleum industry journal. "No longer will private companies be allowed to get fat from Russia's mineral resources."
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Putin has appointed some of his top aides to run the Kremlin's newly acquired empire.The daily Nezavisimaya Gazeta estimated earlier this year that seven people from Putin's inner circle now control nine state companies with total assets of $222 billion, which is equal to 40 percent of Russia's GDP.
Some experts argue that the unregulated "oligarchic" capitalism of the 1990s brought on a public backlash and made the state's return to economic intervention necessary. "Many private oil companies were not serving the national interest, and those mistakes had to be corrected," says Nazit Boikov, an expert with the official Institute of World Economy and International Relations in Moscow.
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