Russian President Vladimir Putin is not good for his country’s oil industry. If you doubt that, consider some of the stories that have been emerging from his-and we use that term advisedly-country over the past several months.
We have, of course, been following reports of Mikhail Khodorkovsky, the jailed head of the bankrupt oil major OAO Yukos. Not content to throw him behind bars on trumped up charges, Putin’s government has proceeded to harass the former oil mogul even in his jail cell.
Last April, Khodorkovsky spent several weeks in isolation after he was slashed in the face by a fellow inmate while sleeping. That was after he had been placed in solitary confinement three times for allegedly breaking prison rules.
Abramovich worries
In the latest move, Khodorkovsky and an associate, Platon Lebedev, have been moved to a detention center in the eastern Russian city of Chita to face possible new charges, according to his lawyer, Natalia Terekhova.
She did not mention what charges were being considered by Russian prosecutors, but as we are coming to learn, any and all charges are possible in Putin’s Russia. The ability to make money is about only thing needed to incur the wrath-or greed-of the Putin regime.
Roman Abramovich, who made his fortune from oil when Russia’s public utilities were privatized in the 1990s, seems to recognize that trend and is putting distance between himself and Putin.
Effective Jan. 1, Abramovich-who last year sold his stake in oil company Sibneft to Gazprom for $13 billion-hopes to be finished as governor of the remote region of Chukotka, having submitted his resignation to Putin.
Observers say Abramovich’s resignation is a sign of his plan to depart from Russia altogether. In fact, they say the 40-year-old oil tycoon has sold off most of his assets at home and now spends most of his time in western Europe.
Shell suffers
Still, he apparently wants to stay on the good side of Putin, whose government stands accused of assassinating political opponents-even those who live abroad. While resigning, Abramovich will still fund several “patriotic” sporting projects.
Russian oilmen are not the only ones suffering at the hands of Putin’s henchmen.
Royal Dutch Shell PLC Chief Executive Officer Jeroen van der Veer is also in a tough spot after having to do a deal with Putin’s regime, which has finally reduced his company’s stake in the beleaguered Sakhalin-2 project.
After weathering months of blackmail from Russia’s environmental authorities, who shut down construction work on the project, Van der Veer-along with colleagues at Mitsui & Co and Mitsubishi Corp.-finally gave in.
The terms under which Shell and partners surrendered to Gazprom control of the Sakhalin-2 project have still not been fully revealed. That leaves Van der Veer the unenviable task of explaining to shareholders the consequences of their investment in Putin’s Russia.