With the kind permission of Radio Free Europe/Radio Liberty, InfoUkes Inc. has been given rights to electronically re-print these articles on our web site. Visit the RFE/RL Ukrainian Service page for more information. Also visit the RFE/RL home page for news stories on other Eastern European and FSU countries.
Return to Main RFE News Page
InfoUkes Home Page
For a glimpse into Russian President Vladimir Putin's views on energy and foreign policy, one need look no further than his years in St. Petersburg in the 1990s. The key players in Russia's energy industry today, in fact, are Putin's former colleagues and mentor from that time.
Putin, who had already spent more than 15 years as a Federal Security Service (FSB) agent, returned to school, studying at the St. Petersburg Mining Institute. One of the most prestigious academic institutions in Russia, it traces its history back to 1773. Since 1994 its rector has been Vladimir Litvinenko, who also serves as a member of the government's newly created fuel and energy commission.
Litvinenko was rector when a 44-year-old Putin in 1997 defended his doctoral dissertation examining how natural resources can contribute to regional economies and strategic planning.
Two years later, Putin, then the director of the FSB, wrote an article for the Mining Institute's journal titled "Mineral Natural Resources In The Development Strategy For The Russian Economy."
In it, Putin posited that hydrocarbons were key to Russia's development and the restoration of its former power. He argued that the most effective way to exploit this resource was through state regulation of the fuel sector, and by creating large and vertically integrated companies that would work in partnership with the state.
Putin formulated most of his energy views while working in the St. Petersburg mayor's office, where he headed the Foreign Economic Relations Department.
His colleagues in that office included: Aleksei Miller, now chief executive of the state-controlled Gazprom monopoly; Dmitry Medvedev, the head of the presidential administration, a deputy prime minister, and chairman of the board of directors at Gazprom; and Igor Sechin, a man with ties to the former KGB, who is currently the deputy head of Putin's administration as well as the chairman of the board of directors at the state-owned oil company Rosneft.
As the St. Petersburg team rose in prominence, so too did the influence of the Mining Institute and its director, Litvinenko. The institute is now a compulsory stop for Russian and Germany energy leaders visiting St. Petersburg. The institute's official website notes that it has received delegations from Germany's Wintershall gas company -- a close Gazprom ally -- as well as the board of directors of Gazprom subsidiary Surgutgazprom, and Vagit Alekperov, the head of LUKoil.
Litvinenko is also believed to have played a role in the drafting of Russia's 2003 energy strategy, which defined the role of energy as a tool of Russian state policy. Some observers have even suggested Litvinenko would be an appropriate candidate to replace Miller at the helm of Gazprom.
But it is not only Putin's former classmates and mayoral coworkers who have found a role in the current government. Former agents of the KGB, the predecessor to the FSB, also enjoy crucial influence in the Kremlin, and are known as the "siloviki," or "power men." These men have an impact on both government energy policy and the way in which it is implemented.
One of these men is Aleksandr Ryazanov, the deputy chairman of Gazprom and reportedly the head of the "siloviki" faction within the gas giant. Ryazanov became CEO of the Sibneft oil company after it was purchased by Gazprom in 2005. He has also been appointed head of UkrGazEnergo, the newly created Ukrainian-Russian joint venture to act as an intermediary between Ukraine's state-run Naftohaz Ukrayiny and the Swiss-based RosUkrEnergo.
Another is Viktor Ivanov, another deputy head of the presidential administration. Ivanov has a colorful history. A graduate of the Leningrad Bonch-Bruyevich Electrical Technical University, Ivanov worked as an engineer before reportedly joining the KGB in 1977 and fighting with Soviet forces in Afghanistan.
Upon his return, he rose to the head of the anticontraband department of the Leningrad Oblast KGB. He retired from service in 1994 with the rank of colonel and was appointed by Putin to head the administrative departments of St. Petersburg city hall.
The two groups of men surrounding Putin -- the "siloviki" and the St. Petersburg's mayor's office group -- have become what one could call an informal "board of directors" of the new Russia. As such, they set the agenda for Russian energy policy and in fact control the country's vast energy resources. Their influence should not be underestimated.
YUSHCHENKO SAYS UKRAINIAN INTERESTS MUST BE DEFENDED IN BLACK SEA FLEET TALKS... Ukrainian President Viktor Yushchenko has said that Ukraine should have a clear strategy for defending its national interests in talks with Moscow on terms for Russia's Black Sea Fleet, Interfax reported on 14 February. "All lease terms should be guided by the appropriate international agreements and take account of international experience and today's trends on the real estate market," he said. Hryhoriy Lutsai, a representative of the Sevastopol administration, suggested on 14 February that the annual rent for the naval base in Crimea should be raised to $200 million from $97 million, as set by a 1997 agreement. However, Russian Deputy Foreign Minister Grigory Karasin said on 14 February, after meeting with his Ukrainian counterpart Volodymyr Ohryzko, that Ukraine should stop "speculation" on the issue and comply with the 1997 agreement. "There will be no speculation, there will be pragmatic relations," Ohryzko said for his part. AM
...AND DEMANDS CLARITY IN UKRAINIAN GAS SECTOR. President Yushchenko said on 14 February that Ukraine will not allow nontransparent activities in its gas sector, Interfax reported, citing the presidential press service. Yushchenko also said that he shares the concern expressed by the NGOs, political and business groups, and international organizations, including the EU, over the lack of information on the Swiss-based company RosUkrEnergo, which holds a monopoly on gas supplies to Ukraine through Russia. The government, if necessary, will look for alternative approaches to the gas sector and cooperation with Russia, Yushchenko added. He also ordered the government to gather complete information on RosUkrEnergo and to make it public in order to ensure transparency in Ukraine's gas supplies. AM