Showing posts with label Yukos. Show all posts
Showing posts with label Yukos. Show all posts

Friday, December 05, 2014

‘Yukos Affair’ and its shadow over Putin’s Russia

President Vladimir Putin and what colours his vision of modern Russia are under the spotlight like never before. As Ukraine burns and western sanctions hit the Kremlin, Russia’s president remains defiant spewing yet stronger nationalistic rhetoric with a coterie of supporters in tow. Many would find internal politics in Putin’s Russia to be fascinating and repugnant in equal measure.

Yet, in order to understand the present, a past occurrence – the downfall of Yukos and its former chief Mikhail Khodorkovsky – would be a good starting point. In his latest work published by I.B. Tauris, academic Richard Sakwa not only describes the episode in some detail but also contextualises power struggles and insecurities that shaped one of the most controversial episodes in contemporary Russia.

This book isn’t merely Khodorkovsky's story from an unceremonious arrest in 2003 to a surprising release in December 2013. Rather, the author has taken that backdrop to give the readers an insight into the beginning and subsequent evolution of ‘Putinism’ as we know it. 

In just under 300 pages split by 12 chapters, Sakwa, an expert on Russian affairs with half a dozen works under his belt, has portrayed the event as an extraordinary confrontation between the two great forces of modernity – the state and the market – with Putin and Khodorkovsky as antagonists. 

“It was about their associated conceptions of freedom and at the same time – a struggle for Russia,” he writes. Putin’s determination to clip Khodorkovsky’s petrodollar powered wings marked a turning point. The oligarch’s controversial trial(s) attracted widespread international condemnation and ended in one of the world's richest and most powerful men becoming the state's prisoner. 

Far-reaching political and economic consequences in its wake left an indelible black mark about the quality of freedom in Putin's Russia. It also laid bare the complex connection between the Kremlin and big business during Russia's troubling transformation from a planned economy during the Soviet era to capitalism.

Being an outsider, it is easy to feel sympathetic towards Khodorkovsky and castigate the Russian way. However, by not overtly romanticising Khodorkovsky's resistance to Putin’s view of modern Russia, Sakwa paints a convincing picture of how the oligarch turned prisoner himself was no stranger to the contradictory essence of the country's democratic evolution.

As the author notes, Khodorkovsky was not only Putin’s antagonist, but also at the same time a protagonist of the contradictions that the president's regime reflected. Ultimately, it all leads on to how subversion of law and constitutionality has become commonplace in today’s Russia.

While the said subversion started taking hold in post-Soviet Russia, and Khodorkovsky most certainly used it to his advantage when it suited him; it was the oligarch’s ultimate downfall that made the state of affairs manifestly obvious beyond the country’s borders. It resonates today with Putin’s modus operandi as entrenched as ever. 

Through his brilliant, balanced description of a key episode in Russia’s rise towards becoming an oil and gas powerhouse, Sakwa has charted a warning from history on what to expect and where it might lead. The Oilholic would be happy to recommend Putin and the Oligarch to energy analysts, those interested in geopolitics, Russia, Yukos Affair or the oil world at large.

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© Gaurav Sharma 2014. Photo: Front Cover – Putin and the Oligarch: The Khodorkovsky-Yukos Affair © I.B. Tauris, February 2014.

Wednesday, April 24, 2013

An arduously researched book on ‘crude’ Russia

When looking up written material on the Russian oil and gas industry, you are (more often than not) likely to encounter clichés or exaggerations. Some would discuss chaos in wake of the collapse of the Soviet Union and the rise of the oligarchs as a typical “Russian” episode of corruption and greed – yet fail to address the underlying causes that led to it. Others would indulge in an all too familiar Russia bashing exercise without concrete articulation. Amidst a cacophony of mediocre analysis, academic Thane Gustafson’s splendid work – Wheel of Fortune: The Battle for Oil and Power in Russia – not only breaks the mould but smashes it to pieces. This weighty, arduously researched book of just under 700 pages split by 13 chapters does justice to the art of scrutiny when it comes to examining this complex oil and gas exporting jurisdiction; a rival of Saudi Arabia for the position of the world’s largest producer and exporter of oil.
 
It is about power, it is about money, it is about politics but turning page after page, you would realise Gustafson is subtly pointing out that it is a battle for Russia’s ‘crude’ soul. In order to substantiate his arguments, the book is full of views of commentators, maps, charts and tables and over 100 pages of footnotes. The narrative switches seamlessly from discussing historical facts to the choices Russia’s political classes and the country’s oil industry face in this day and age.
 
The complex relationship between state and industry, from the Yeltsin era to Putin’s rise is well documented and in some detail along with an analysis of what it means and where it could lead. In a book that the Oilholic perceives as the complete package on the subject, it is hard to pick favourite passages – but two chapters stood out in particular.
 
Early on in the narrative, Gustafson charts the birth of Russian oil majors Lukoil, Surgutneftegaz and Yukos (and the latter’s dismembering too). Late on in the book, the author examines Russia’s (current) accidental oil champion Rosneft. Both passages not only sum up the fortunes of Russian companies and how they have evolved (or in Yukos’ case faced corporate extinction) but also sum up prevailing attitudes within the Kremlin.
 
What’s more, as crude oil becomes harder and more expensive to extract and Russian production dwindles, Gustafson warns that the country’s current level of dependence on revenue from oil is unsustainable and that it simply must diversify.
 
Overall, the Oilholic is inclined to feel that this book is one of the most authoritative work on Russia and its oil industry, a well balanced critique with substantiated arguments and one which someone interested in geopolitics would appreciate as much as an enthusiast of energy economics.
 
This blogger is happy to recommend Wheel of Fortune to readers interested in Russia, the oil and gas business, geopolitics, economics, current affairs and last but certainly not the least – those seeking a general interest non-fiction book on a subject they haven’t visited before. As for the story seekers, given that it’s Russia, Gustafson has more that few tales to narrate all right, but fiction they aren’t. Fascinating and brilliantly written they most certainly are!
 
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To email: gaurav.sharma@oilholicssynonymous.com

© Gaurav Sharma 2013. Photo: Front cover - Wheel of Fortune: The Battle for Oil and Power in Russia © Belknap Press of Harvard University Press.