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Sechin Harkens Back to Victim Narrative in WSJ Interview

sechin033109.gifIt’s a time honored tradition among Russian officials, especially in times of crisis or challenging moments, to speak about the country in terms of what we call “the victim narrative” – a presentation of all events occurring within the country as a response to some foreign imposition, pressure, or attack.  Nothing is ever Russia’s fault, no mistakes are ever made, but rather only a long series of experiences of being victimized at the hands of the West.  It’s quite a spin.

Today’s interview in the Wall Street Journal with Deputy Prime Minister Igor Sechin is no exception, and although the story amazingly doesn’t broach the sensitive topic of the Mikhail Khodorkovsky trial or how Sechin’s company directly benefited from the theft of Yukos – we are treated to some of the most artful expressions of the victim narrative we have heard in quite a while.  According to Sechin, Russia doesn’t want to join OPEC because it can’t control production of private companies (nevermind that he himself is Chairman of Rosneft), Russia has no plans of nationalizing any companies (a statement that is hard to swallow for obvious reasons), and that there’s no difference between hard-line siloviki and the few remaining Kremlin liberals.  It would be nice to see Sechin take the stand in the Khodorkovsky trial to put some confidence behind his words.

Excerpts from interview:

To many in the West, Russia’s oil wealth is an addiction that haswarped its economy. Russian energy czar Igor Sechin considers thatenvious nonsense.

Russia’s resources “are a God-given good that should be usedeffectively,” he said in his first major interview with a foreign mediaoutlet. “Somebody is always wanting to take them away.” (…)

“It would be irresponsible for Russia to join OPEC because we can’tdirectly regulate the activity of our companies,” he said, as nearlyall are privately owned.

Yet, he supports “coordinating actions” with the cartel because ofthe shared interest in lifting prices. He said Moscow isn’t in aposition to mandate lower production, but Russian oil companies willcurb output this year as falling prices cut into their ability toproduce.

He figured that if oil slides back under $40 a barrel, Russianoutput this year could fall twice the amount the government nowforecasts, or about 300,000 barrels a day.

Russia, he added, wants to keep oil prices between $60 and $100 abarrel. To help ensure that, Moscow is considering building a reserveof crude to allow it to react to market shifts. In addition, Mr. Sechinsaid Russia has put off auctioning development rights for some big, newexport-oriented fields.

At current prices, he said oil companies are starved for vitalcapital to invest in new projects. “If companies don’t have access tostable financial resources for the long term, that could lead to ashortage and to a sharp increase in prices for oil and oil products,”he said. “That might not alarm consumers very much now because demandis falling, but when the recovery begins…this situation coulddevelop.”

Mr. Sechin called for a gradual but major overhaul of theinternational oil trade, adding tight regulation and longer-term supplycontracts, eliminating “economically unjustified intermediaries” andreducing speculation. Russia is the world’s No. 2 crude exporter.

Mr. Sechin hailed BP PLC’s TNK-BP Ltd. joint venture in Russia as asign of Russia’s openness to foreign investment in the sector. But hesingled out secretive Siberian giant OAO Surgutneftegaz as “Russia’sbest private oil company.”

Investors have criticized Surgut for refusing to releaseinternational-standard financial accounts or details of its ownershipstructure.

Speaking about the Russian economy as a whole, Mr. Sechin said thegovernment isn’t planning to take over troubled companies. “There is nogoal of nationalizing,” he said. “I remind you that in the West, thisprocess is under way and it’s much harsher. But not here.”

Mr. Sechin said the government is supporting companies, but wouldconsider nationalizing only “in exceptional cases, when shareholdersask or [when] it would have influence on systemically importantcompanies.”

The government early this year rejected offers from some heavilyindebted tycoons to convert loans from state banks into minority equitystakes in their companies.

“Nobody is taking anything from anyone,” he said. “They should drink the cup of their responsibility to the end.”