Russia » Economics
Author`s name Michael Simpson

Houston Summit: Big Jabber

The Russian-American oil summit is going on in Houston. Everyone is so much enthusiastic that the summit was opened, and that officials and business magnates are allowed there on equal terms. It is also a great pleasure that the summit is purely of a commercial nature. However, nothing except for declarations has been declared at the summit yet. Both parties pursue their own interests, and the whole fuss overshadows partnership and real co-operation.

Members of the Russian delegation still hope that the summit will bring considerable results. Russia’s Minister of Energy Igor Yusufov describes Russia’s resource abilities: how much oil and gas Russia could export to the USA. It is stressed at that, this year Russia is even ahead of Saudi Arabia in daily oil production. However, the minister omits the fact that Saudi oil industrials can easily leave Russia behind with a single turn of a valve. And this will be once and forever. Moreover, it is an open secret to anyone in the USA who is concerned about oil.
 
Igor Yusufov promises to follow a recommendation from US Secretary of Energy Spencer Abraham and settle all technological problems connected with making a national strategic oil reserve in a volume which is required for the country. At the same time, American analysts mentioned several times already that measures of this kind were senseless, as oil production in Russia is uninterrupted, and the whole amount produced is immediately sold. Making of a national reserve would damage export, and consequently worsen the economic situation in the country.
 
In any case, everything that Russian officials say is focused on one thing: it is necessary to invest about 50 billion dollars in Russia’s oil industry to provide for a predictable oil production growth. Russia’s Minister for Economic Development and Trade German Gref also supports Yusufov’s ideas. He in his turn promised to make Russian laws maximally transparent and convenient for investors. And also said the government would try to interfere the finance sphere minimally not to trouble investors. So, Russia promises any conveniences to investors to attract them in  the country.
 
What do Americans say to it? US Ambassador to Russia Alexander Vershbow told in an interview to Kommersant that Russia should immediately eliminate all restrictions in  the sphere of trade and investments. He says, the measure will help private companies realize projects and cooperation which better suit their interests. Mr. Vershbow surmises this would be an advantage for the world and Russian economies.
 
US Commerce Secretary Donald Evans got amazed at the scale of the Russian fuel and energy complex’ needs. He explained that the USA wanted global energy safety for itself, for this very reason it aimed at diversification of sources from where fuel is imported. That is why special attention is paid to Russia. (Which is quite natural by the way, because the USSR which used to be extremely terrible, has turned into Russia which is terribly poor and obedient. And the Russian bear easily yields to training, unlike the Arab camel). However, as Donald Evans stressed at the end of his summit speech, governments prefer not to run risks and never sign bills, that is why companies are to take decisions themselves. And it is known perfectly well that American companies are extremely cautious about Russia.
 
Website RusEnergy cites opinions of Americans about business in Russia. for instance, the senior consultant with Akin, Gump, Strauss, Hauer & Feld, Tobby Gatti said: “There is one phrase to describe investing in Russia: you never know about your partner as much as you would like to.” The analyst with Carnegie Endowment for International Peace, Martha Brill Olcott comments on Russia’s oil industry: “They are dashing against a glass ceiling; they can’t develop further without access to foreign capital. What they currently need is to create some illusion of reality for world financial markets to believe that Russians behave the same way their western colleagues do.”
 
Foreigners once again recommend Russia to create an illusion of reality, at the time when Russia expected it would be taught to face the truth. And that it would be given money as well. But nothing of this kind happened. So, Russia will have to gain more experience in creating illusions.

A memorandum signed by US’s Eximbank and Russia’s LUKOIL, Yukos and Sibneft oil companies is so far the only result of the summit. The document provides that Eximbank will study the possibility of granting medium- and long-term loans to the sum of 100 million dollars to each of the mentioned oil company. At that, these loans can be spent only on purchase of oil production and refining equipment in the USA. To tell the truth, the bank which focuses on development and support of US’s export and Russia’s largest oil companies could have reached the agreement even without any summit.  
 
Dmitry Slobodanuk
PRAVDA.Ru

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