If you want to know what Russia’s energy ambitions are in the emerging markets of Africa, Asia, and Latin America, I used to tell people that all you had to do was carefully track the travel schedule of Vladimir Putin. Nowadays, the same can be said of the Energy Czar Igor Sechin, as his itinerary is bound to be connected with the signing of major deals.
Case in point, yesterday afternoon, Russia’s RIA Novosti Spanish wire service reported on the arrival of the Deputy Prime Minister and Rosneft Chairman to Caracas, Venezuela. The reason for the trip, as duly reported by the state news agency, was to prepare for Hugo Chavez’s upcoming visit to Moscow and a high-level inter-governmental commission to be held in St. Petersburg.
By the end of the day, Sechin had already inked more deals, conveniently for himself and for Russia, with the Venezuelan government – Bloomberg reports that Russia and Venezuela signed wide ranging cooperation accords on energy, military, and agricultural cooperation, including the formation of a joint venture between PDVSA-Services and Gazprom’s Latin America division. What does Sechin personally get out of the trip? He took a trip with his PDVSA counterpart Rafael Ramirez out to see an oil field in the Orinoco Belt which was once owned by U.S. firm ConocoPhillips before expropriation, announcing plans to unveil another joint venture to develop it with with Rosneft in September.
Joint ventures and big-sounding cooperation agreements are a familiar feature to observers of Russia-Venezuela relations (see some of our past blog posts), and the two countries have even formed a $4 billion development bank. But other than arms purchases, the trade volume hasn’t yet caught up. Venezuela exports some 60% of its oil to the United States, comprising 11% of U.S. supply. The U.S. is by far their largest trade partner, and Russia’s volumes don’t compete with China.
The reason for all this fuss, of course, is that the relationship is political.
Hugo Chávez should be honored to have Russia send such a high ranking official to help him “prepare” for his next visit to Moscow – Sechin is estimated by many Kremlinologists to have more clout, and many more billions, than President Dmitry Medvedev himself. As we have noted in the past on this blog, Sechin is the main figure running Russia’s Latin America policy, as he is rumored to be fluent in both Spanish and Portuguese from his KGB days in Africa.
Controversy seems to follow the man wherever he goes. As the second show trial continues on against Mikhail Khodorkovsky, the political prisoner has fingered Sechin as the key responsible figure who benefitted from the theft of Yukos. The Rosneft chairman has also come under fire for what many believe to be a non-sensical deal with the Chinese, passing them control of the future of Russian oil. The economist Konstantin Sonin has written that “Sechin’s contract with China might go down in history like the notorious privatization auctions of the early 1990s.“
What the United States may be worried about with this visit is Russia’s potential acquiescence to the Chávez plan to disrupt the attempts to broker a deal on behalf of former Costa Rican president Oscar Arias to re-install the ousted President of Honduras, Manuel Zelaya. Under instructions from Chávez, Zelaya has ignored all advice from Arias, and made many high risk stunts, including crossing over the border. Many observers believe that Chávez and Zelaya “need more dead Hondurans” to produce the outcome they are looking for.
As for Russia, they were happy to hear that the Venezuelans would like to double their order for Russian made tanks, right alongside their threats to invade Honduras to depose the military government.
What we can be certain of here is that if Hillary Clinton is saying that there is no such thing as “spheres of influence,” then Mr. Sechin seems dead set on proving her right.
Photo credit: Russia’s Deputy Prime Minister in charge of Energy Igor Sechin attendsa news conference in Brussels January 12, 2009. Gas destined for European Unioncountries should resume early on Tuesday after all involved partiesagreed to settle a row over Russian supplies to Europe via Ukraine, Gazprom‘s deputy chief executive said. (Reuters Pictures)