Oil

Putin ally Sechin ensured Russian oil sector role

Reuters News
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Posted: May 10, 2012 7:42 PM
Putin ally Sechin ensured Russian oil sector role

By Melissa Akin

MOSCOW (Reuters) - Russian Deputy Prime Minister Igor Sechin will join the board of the state oil and gas holding company, a sign he is likely to keep a leading role in the world's largest energy industry even if he quits the cabinet.

Sechin's role in the new presidency of Vladimir Putin is a widely debated topic among Russian oil executives and foreign investors. Few doubt the close Putin ally will retain his grip on Russia's vital industry, which is seen by many as a guarantee that an 11th-hour push to win foreign capital and reform oil tax will continue.

Putin, inaugurated president on Monday, signed an order adding Sechin to the list of candidates for the board of the Rosneftegaz holding company on Sunday, his last day as prime minister, the government website said on Thursday.

Analysts did not see him as a likely candidate for a cabinet post in the new government because of his personal differences with Dmitry Medvedev, who swapped places with Putin to become prime minister of the incoming government.

But Putin is seen as unlikely to entrust the oil and gas sector, the government's biggest source of revenue, to anyone else. Sechin is expected to retain a strong influence over the industry behind the scenes, as he did in Putin's 2000-2008 terms.

Sechin played a central role in efforts to transform Rosneft, bulked up with assets from bankrupt oil giant Yukos, into a global player.

He presided in recent weeks as Rosneft signed three major deals to explore promising but challenging Arctic offshore zones with ExxonMobil, Italy's Eni and Norway's Statoil.

Sechin also oversaw changes to taxation to coax fresh capital to the Russian oil industry, which faces declines at Soviet-era fields while companies balk at making big investments in developing new fields under the current tax regime, seen as one of the world's most onerous.

The moves have helped secure his credentials as Russia's top energy dealmaker, even as rumors suggested that Sechin was headed for a top-level post in security or at a state corporation.

COMPANY WITH PROSPECTS

In August Sechin gave up a seat on the board of Rosneftegaz, which holds the government's controlling stake in oil company Rosneft and a small stake in Gazprom, after Medvedev ordered government officials to leave the boards of the state companies they regulate.

He also left a board seat at Rosneft itself, which is due to elect a new board at a June 20 annual meeting. Sechin was not included in a list of nominees approved by the current board in March, and the deadline for changes passed 60 days before the meeting.

It was unclear when he would resume his seat at Rosneftegaz.

Given the restrictions imposed by Medvedev on industry regulators' participation in company boards, an appointment to the Rosneftegaz board suggests Sechin may have no formal oversight of oil and gas in his new role under President Putin.

The holding company is not prominent in energy affairs, although it is currently packed with senior figures in the energy industry including Rosneft's vice president for legal affairs, Larisa Kalanda, and the head of state oil pipeline monopoly Transneft, Nikolai Tokarev.

Its chairman is Andrei Akimov, the head of Gazprom-affiliated Gazprombank.

The number of industry heavyweights on its board has fed speculation that the holding company could take a more active stance in industry affairs, particularly at Rosneft.

"It's a company with prospects," an industry source said.

Tokarev, also a key Putin ally who has run Transneft for five years, extended his contract for three years, the company said on Thursday, securing his post for at least the first half of Putin's presidential term.

(With reporting by Olesya Astakhova and Denis Pinchuk; Writing by Melissa Akin, editing by Jane Baird)