Russia's energy chief

Russia's oil sector views the appointment of a new energy minister and less autonomy at the Fuel and Energy Ministry as positive signs.

Russia's oil sector views the appointment of a new energy minister and less autonomy at the Fuel and Energy Ministry as positive signs.

After a behind-the-scenes battle, Pres. Vladimir Putin replaced Fuel and Energy Minister Viktor Kalyuzhny with the relatively inexperienced and unknown Aleksandr Gavrin.

Rumors of Kalyuzhny's departure had been floating for some time, but his fate was sealed when reformers specifically demanded his dismissal as a condition for their support of Putin's choice for prime minister, Mikhail Kasyanov.

The Union of Right Forces (SPS), lead by ex-Prime Minister Sergei Kiriyenko, was particularly insistent on Kalyuzhny's dismissal. Kiriyenko charged Kalyuzhny was too close to Russia's oligarchs and had mismanaged the energy ministry.

Putin's removal of Kalyuzhny also was taken as a sign the president is committed to reform. Kalyuzhny reportedly has been asked to serve as Putin's special envoy to the Caspian Sea region.

New minister

Little is known about Gavrin, who arrived in Moscow only recently.

Born in Ukraine in 1953, he grew up in the Tyumen region, where he studied engineering at the Tyumen Industrial Institute. He then earned a doctorate in sociology from Tyumen State University.

He most recently was mayor of the city of Kogalym, located in the Tyumen region's oil-rich Khanty-Mansiisk autonomous region.

Gavrin reportedly was a good mayor and a capable administrator, but his abilities may be strained at the energy ministry.

And some observers were concerned his appointment might add to Lukoil OAO's influence in the government.

Gavrin had worked for Lukoil for several years before the company supported his bid in the mayoral elections last March.

Last September, Lukoil managed to get another ally, Semyon Vainshtok, named head of Transneft, the national oil pipeline company.

Ministry retooled

Whatever Gavrin does, it appears Putin will be watching over his shoulder.

Putin has ordered the Fuel and Energy Ministry reorganized and renamed the Energy Ministry. Observers weren't sure what that means in practical terms, other than the fact the ministry's status has been reduced.

Jim Henderson, head of research at Renaissance Capital in Moscow, predicted, "The energy ministry is not going to be as important as it was. State control of industry has retreated, and we are expecting private enterprises to play a more important role."

Gavrin has made general statements indicating he would abandon Kalyuzhny's faltering oil export quota system. Kalyuzhny already had started dismantling the system, raising export allowances 22% to 235.3 million bbl at the start of the second quarter.

And Kalyuzhny's pet project, the creation of Gosneft, a state-owned oil giant uniting the government's holdings in Rosneft, Slavneft, and Onako, is probably dead.

A number of private companies, Lukoil in particular, had expressed interest in buying these companies from the government, which is planning to privatize some stakes later this year.

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