Russia » Economics
Author`s name Ольга Савка

Russian Energetic Strategy Is Gift to Oligarchs

Oil will be pushed into the background in 10 or 20 years

On Thursday, the Russian government is to consider the energetic strategy of Russia. The strategy embraces the period till 2020. The document has been developed for three years under the guidance of Prime Minister Mikhail Kasyanov. According to the document, the fuel and energy complex of the country is supposed to become the driving force of the economic development. However, as analysts point out, such an approach to the economic development contradicts to the essence of President Putin's address to the Federal Assembly. In addition to that, it is not ruled out that certain changes are going to occur in the Russian fuel and energy industry soon. It will not be serious to say that the industry will play the role of the driving force as a result of those changes.

The government is going to invest some $680 billion in the modernization of the fuel and energy industry until 2010. It deems that governmental officials are going to discuss this issue at a meeting on Thursday. It is not excluded that they will try to adjust the developed concept to Putin's wishes, although it will be extremely hard to do it.

To put it in a nutshell, the point of the energetic strategy is to provide the country and its economy with fuel and energy regardless of any changes and fluctuations on the world energy market. According to forecasts, the internal demand on fuel and energy resources is to grow by 27-40 percent within coming ten years. The export demand is to gain 35-36 percent. However, oil and gas deposits run out of their reserves rather quickly, whereas there is a strong lack of money for new exploration and development. There can be one conclusion made from this: Russia is supposed to consume less energy and to export more of it.

Indeed, the level of the Russian energy consumption exceeds world indexes by 2,3 times, and even by 3,1 times as opposed to European Union states. Well, the European Union does not have resources of its own - Europe buys energy from other countries. One of the authors of the Russian energetic strategy, Anatoly Yanovsky, believes that energy is supposed to be very expensive in order to reduce the energy consumption. On the one hand, people will have to economize, on the other hand, Russian giant Gazprom will obtain more funds for the development of deposits in East Siberia, Yamal and so on.

Governmental officials reportedly discussed energy tariffs at the meeting with Vice Prime Minister Viktor Khristenko yesterday. More importantly, Russian oil oligarchs have their own plans regarding the development of the fuel and energy industry. It goes without saying that oligarchs' plans do not comply with the ones of the government. Gazprom is a state company, while other companies have private owners. This means that they are free to dispose their property as they wish. To all appearance, Russian oil proprietors want to get rid of their assets in the fuel and energy industry as soon as possible.

PRAVDA.Ru has reported before that the owners of Russian oil companies will most likely sell their business to large foreign enterprises. The only person, who is serious about the development of the oil business is Mikhail Khodorkovsky, the head of the Russian oil giant Yukos.

Mikhail Fridman, the head of the Alpha-Group, has virtually sold the TNK company (Tyumen Oil Company) to the British Petroleum Corporation. It is rumored that a foreign company is about to acquire another large Russian company, Surgutneftegaz. No foreign company wished to buy Sibneft, so the company's real owner, the Chukotka region governor, allowed Yukos to take Sibneft over. Yukos's indexes dropped soon after that. At least, financial experts set out their disappointment after the publication of the company's annual report.

What makes Russian oil oligarchs quit the oil business? Such actions are definitely supposed to have good reasons. As a matter of fact, there are good reasons for that. Oil analysts believe that the world oil conjuncture is going to become absolutely not favorable soon. Oil prices are expected to go down in about a year. A lot of cheap energy resources are needed to overcome problems in the economy of the USA and other developed countries. This means that energy resources will remain cheap, whether exporters want it or not.

Furthermore, George W. Bush has recently approved the allotment of huge money for the alternative energy research. In 10 or 20 years (the period of the Russian energetic strategy),  developed countries (and all others) will start using the hydrogen energy. Therefore, the massive extraction of oil will become absolutely pointless and the oil industry will be pushed into the background. What is going to happen to the oil business then? Experts believe that the profitability of the oil business will be aimed at zero. However, the Russian government is going to modernize the domestic oil and gas industry. Experts say that the Russian oil business will have to go through poverty, desolate towns and enterprises.

It just so happens that the government's energetic industry is a gift to oligarchs. The government will take the fuel and energy complex under its control. Oligarchs will not show any resistance about it and invest their money in more lucrative industries. The state will go straight to the bottom again, together with the fuel and energy complex.

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