Medvedev to Rosneft: You Suck

Dmitry Medvedev went on television the other day to attack Russia’s notoriously inefficient state-owned companies.  It was a classic public tongue-lashing – the kind we used to see the place-holding PM Viktor Zubkov give to unfortunate fishery ministers.  The president makes a strong point here, but still, it seems unlikely that this kind of government scolding to the private sector is likely to lead business innovation … how about some ideas for scholarships, exchange programs, professional schools, tax credits, etc?

“In the oil sector, things look pretty miserable,” he said in televised remarks.

Medvedev quoted a report saying that state-owned public company Rosneft, the owner of the world’s largest hydrocarbon resources, spends $11 million (euro7.64 million) annually on research and development, which is 0.015 of its net profit. Russia’s second-largest oil company Lukoil, which is privately owned, spends ten times as much, he noted.

Rosneft posted a $1.2 billion net profit for the third quarter of 2009, Lukoil posted a $2.1 billion net.