Today and tomorrow, the final two “auctions” of Yukos productions assets will be held, which will likely deliver the valuable properties at an enormous discount directly or indirectly to state-owned Rosneft. As the key beneficiary of this illegal expropriation, Rosneft has gone from a tiny insignificant company to the largest player in Russian oil – providing the Kremlin with a central foreign policy tool to operate alongside Gazprom. Looking at how these auctions have been handled, one would be hard pressed to say it is any better than the chaotic privatizations of the 1990s after the fall of communism – it is in fact much worse because it ties Russia’s energy supply to the policy apparatus. Speaking to the FT, economist Andrei Illarionov indeed sees the parallel.
Andrei Illarionov, a former presidential economic advisor, said the scheme was worse than the loans for shares auctions of the mid nineties, which saw the crown jewels of Russia’s industry sold off to a group of insider businessmen, including the sale of Yukos to Mr Khodorkovsky for $300m. “At least this was aimed at creating a new class of business barons,” Mr Illarionov told the FT. He said the scheme in which Rosneft is set to immediately recoup most of its spending on the takeover of Yukos’ assets was reminiscent of “typical KGB operations” ”The KGB like to have financing not from their own budget but at their expense of their victim,” he said. ”They have developed this to a special art form.”