Konstantin Ivanov
Whether or not more Government members will be sacked, Igor Sechin's influence continues to grow
In the second half of February, Deputy Prime Minister Igor Sechin lobbied for the appointment of a man close to him as First Deputy Director-General of the company OAO MRSK Holding, which controls power grids, a source close to the Government says. The man in question was Nikolai Shvets, former advisor to the head of Rostekhnologii, Sergei Chemezov. The holding's Director-General, Alexander Kazakov, turned Mr Shvets down three times.
After the 20th of February, Vladimir Putin allegedly called Mr Kazakov and asked him why he was quitting his job. As he was talking, Vladimir Putin had an order on his desk on Mr Kazakov's dismissal ready to be signed. Mr Kazakov replied that he was not planning to quit and that he was a victim of intrigue. The Prime Minister allegedly reassured Mr Kazakov and told him to carry on. On February 26 Mr Kazakov was fired and Nikolai Shvets became the head of OAO MRSK Holding.
For about two weeks the buzz in the government corridors was about more firings at the end of March. The dismissal of Minister of Agriculture Alexei Gordeyev was the first swallow, several members of the Government staff say. More dismissals will follow. What fuels these rumours? In early April Vladimir Putin will, under the new law, report to the Duma on the work of the Government and he intends to renew his team ahead of it. The Prime Minister is annoyed by the daily quarrels in the Government over anti-crisis programmes.
Among those singled out for dismissal are Minister of Natural Resources Yuri Trutnev, Minister of Transport Igor Levitin, and Minister of Industry Viktor Khristenko. On most of the issues within their remit, they report to Igor Sechin. They are known to have never fit into his team. Whether or not they will be sacked is unknown because leaks on impending Government reshuffles can never be fully trusted. The decisions are made by Vladimir Putin and Dmitry Medvedev amongst themselves.
Whether or not there will be a Cabinet reshuffle, observers note that Igor Sechin is rapidly building up clout. One of Mr Sechin's recent initiatives is the formation of a national gas reserve, two well-informed sources say. Russian producers, Gazprom first and foremost, have an excess of gas. Because of the crisis, demand for oil and gas is falling, and the Government already expects demand for and the prices of oil to continue falling, a process that cannot be stopped even by cutting production. Yet oilmen and gasmen will have to cut production and gasmen will have to store the gas or shut down the wells.
Mr Sechin proposes creating an agency that would use budget money to buy out unsold gas and pump it into storage facilities. The wells won't need to be shut down. The thinking behind it is simple: demand will be restored tomorrow, prices will go up and the country will have lost revenue and even some markets: bringing fields back into operation is labour- and time-consuming. Gazprom's press service told Newsweek, however, that they had never heard about this idea.
Small gas producers would benefit from the creation of the gas reserve: for them, shutting down their wells is costly and they don't have large storage reservoirs. Gazprom is likely afraid of losing even part of its monopoly in the gas market because it will then have to deal with the Government, in the person of Mr Sechin, on every issue.
Although he is in charge of the energy sector, Mr Sechin is not directly involved in solving gas issues. Even so, he is known to have been active in the January gas war with Ukraine, and his office handed down to the Government staff the theses used to write speeches for Messrs Putin and Medvedev on that topic. Gas market experts doubt that Mr Sechin's ideas about a state gas reserve are realistic: the state is cash-strapped as it is and it cannot afford to buy extra gas.
In December Mr Sechin, who is already the head of the Board of Directors of the biggest Russian oil company, Rosneft, became the Chairman of the Board of Directors of one more company, OAO Inter RAO UES, which controls the export of electricity from Russia. As the crisis unfolds, Mr Sechin's position grows stronger. He alone has direct access to Putin. A source in the Government Staff says that only he and Chief of Staff Sergey Sobyanin are authorised to make changes to the Prime Minister's work schedule.
Executives of major Russian companies and banks are sure that Vnesheconombank, the main administrator of Government economic aid, does not issue major loans without a go-ahead from Mr Sechin. When a conflict among Nornikel shareholders flared up last summer, Mr Sechin acted as a broker and appointed Vladimir Strzhalkovsky, the head of Rostourism, as its Director-General. In December he vigorously promoted his friend Sergey Chemezov to the post of Chairman of Nornikel Board of Directors, although the job eventually went to Alexander Voloshin.
When Mr Chemezov joined Rostekhnologii he decided to use the assets at his disposal to form a major air company, Rosavia. A Government source says that Mr Sechin joined the project and in January Rostekhnologii received the Government stakes in Dalavia and Vladivostokavia, the last remaining Government-owned airlines apart from Aeroflot, which were not part of Rostekhnologii.
In February the Deputy Premier made a triumphant tour of the Far East. First a gas liquefying plant was opened in Sakhalin, then Mr Sechin officiated at the launching of a modern tanker in South Korea, and then he managed to borrow $25 billion from China for Russian state-owned oil companies.
Since autumn the Government has been trying to help businessman Oleg Deripaska, who is head over ears in debt to Russian and western banks. There is evidence that Mr Sechin helped him to secure a rescheduling of debts to German and British banks. Mr Deripaska is negotiating the sale of minority stakes in his aluminum assets with China. The talks meet with heavy resistance, a Government source says, but there are reasons to believe that Mr Sechin is behind the talks. A member of the Government Staff who knows Sechin well calls him an "economic dictator".
However, the main target of Sechin's expansion appears to be Gazprom. This summer a meeting of Gazprom shareholders is to elect a new Board of Directors, and Minister of Industry and Trade Viktor Khristenko is not on the list of the Government's candidates. Mr Sechin is the last to sign the list before it is signed by Mr Putin, who officially proposes the Government candidates under the law.
