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Washington Times: Russia Rises on Global Oil Demand

The Washington Times is running an extensive report on Russian energy, the second of a two-part series. The first article can be read here.

“By putting energy companies in the hands of rival bureaucratic factions in the Kremlin, profit is suppressed, investment is suppressed,” said Robert Amsterdam, attorney for jailed Yukos executive Mikhail Khodorkovsky. The biggest loss has been the rule of law, he said. “The attack on the rule of law in Russia leaves casualties. Men are imprisoned. Journalists are killed,” and now Western oil companies are coming under attack, he said. The West deserves much blame for not forcefully condemning and trying to stop the state’s expropriation in 2004 of Yukos’ key assets, he said. “The attack on Yukos was an attack on property rights,” he said. “That attack has left us reeling, has left BP reeling in Kovytka, Shell reeling in Sakhalin, and left Exxon under the gun.” Andrei Illarionov, a former Putin economic adviser who declared that Russia was no longer free and who left the government after Yukos was dismantled, said the company was targeted because it was committed to openness and free markets in a way that was antithetical to powerful officials in the Kremlin. It is symptomatic of the loss of freedom and transparency in Russia that foreign investors and observers have become confused by frequently changing rules and positions, he said. As many as 15 theories emerged as to why Yukos was destroyed, he noted, and legions of analysts continue to scrutinize the Kremlin’s words and actions to try to guess its intent and to find clues about what is coming next. “It requires a new kind of Kremlinology to figure out what’s going on — a science for understanding a nonfree country,” he said.