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Analysis: Russia's Pipelines Of Power

On 27 July, the board of directors of the state oil company Rosneft selected deputy presidential administration head Igor Sechin as its new chairman. Analysts were quick to see the move as part of a pattern designed to boost Kremlin control over the oil sector as a whole. They turned the spotlight on Sechin himself and on Rosneft.

Sechin is believed to be one of President Vladimir Putin's closest loyalists, having worked for him for some 11 years. Sechin graduated from the Department of Germanic and Romance Studies at Leningrad State University in 1984, specializing in French, Spanish, and Portuguese.

After graduation, Sechin worked as a "military translator," a term which is often a euphemism meaning that he worked for military intelligence (GRU). He also served with a Soviet Army unit in Angola.

In 1988, he joined the foreign-trade department of the Leningrad city administration, taking responsibility for relations with Leningrad's sister cities Rio de Janeiro, Milan, and Barcelona. He befriended Putin in 1990 when both men participated in a trade delegation to Rio de Janeiro. In 1991, Putin took over the city's foreign-trade department.

In 1996, Sechin followed Putin to Moscow, working under him in the administration of then President Boris Yeltsin. Since Putin became president, Sechin has held senior posts within his administration.

"Kommersant-Vlast," No. 27 of 14 July 2003, described Sechin as a leader of the so-called Petersburg chekisty. In a memorandum published on 2 September 2003, Effective Politics Foundation head and Kremlin insider Gleb Pavlovskii accused Sechin and the chekisty of plotting to take power within the presidential administration in order to squeeze out all holdovers from the so-called Family of the Yeltsin era. Pavlovskii, who himself was an ally of Yeltsin-era holdover Aleksandr Voloshin, who at that time was the head of Putin's administration, complained that the chekisty were planning a crippling redistribution of property in order to benefit themselves and their supporters.

National Strategy Institute Director Stanislav Belkovskii earlier this year named Sechin as one of the organizers of the assault on oil giant Yukos and oligarch Mikhail Khodorkovskii (see "RFE/RL Russian Political Weekly," 7 April and 15 July 2004).

On 5 July, Belkovskii posted an analysis on the National Strategy Institute website ( in which he wrote that the Kremlin would reject any compromises offered by Yukos or former Yukos CEO Mikhail Khodorkovskii and would instead implement a plan purportedly drafted by Sechin that would entail the takeover of Yukos assets by state-controlled Rosneft and Gazprom. Under the plan, court bailiffs would sell Yukos's assets to those companies at cut-rate prices

Rosneft is Russia's sixth leading oil producer. In 2003, it pumped 19.4 million tons of oil, generating revenues of $3.6 billion. Perhaps the most interesting thing about Rosneft, though, is that it is 100 percent state owned. An enlarged Rosneft headed by Putin loyalist Sechin, together with Transneft, the state-owned oil-pipeline network, would be able to form a cartel that would have a stranglehold on Russian oil exports and could determine the rules of the game, a 27 July comment on the National Strategy Council website argued.

"Before our eyes we are seeing the emergence of a pipeline epire that will be quite different from a 'liberal empire,'" the website commented, referring to a proposal put forward in December 2003 by then Union of Rightist Forces co-leader Anatolii Chubais. The driving force behind this new empire will be the Kremlin-connected political elite, not independent businesspeople advocating so-called liberal values.