On Monday, Iraq announced
that it would welcome any Russian oil company other than
LUKoil into the consortium hired to develop its West
Qurna field. Iraq broke its $3.7 billion contract with
Russia's largest crude producer in mid-December. The
announcement was just the latest in LUKoil's long list
of mishaps in Iraq. Saddam Hussein seems to have
realized that Russia is on the brink of a new industrial
war and that the grand prize will be LUKoil. The company
is weak and is in no position to promote Iraq's
interests in Russia.
Everything has been going
wrong for LUKoil.
In July of last year Ryazan
resident Irina Yegorova, the owner of five shares in
LUKoil, an investment currently worth about $75,
successfully filed a petition in a Ryazan court to have
any export-related orders issued by LUKoil president
Vagit Alekperov declared null and void. As a result,
pipeline monopoly Transneft halted LUKoil exports for
two days, costing the company $1 million.
This past summer, LUKoil got
into a fight with Vladimir Butov, governor of the
oil-rich Nenets autonomous district in the Far North.
Butov, obviously with approval from on high, welshed on
commitments he had made to LUKoil, which he may have
already been paid for. At one point the governor was at
the center of six criminal investigations. Butov blamed
everything on LUKoil, and the company found itself cast
as a troublemaker encroaching on the federal
government's turf.
Then LUKoil's chief financial
officer, Sergei Kukura, went missing. The consensus is
that he was kidnapped with the aim of pumping him for
his vast knowledge of the company. This couldn't have
been carried out without permission from the highest
levels.
At the time, LUKoil was
building a new oil-product terminal on Vysotsky Island
near St. Petersburg. Earlier this month construction was
forbidden, ostensibly on ecological grounds, but only
after LUKoil had already sunk huge sums into the
project.
Any Russian industrial war
has three components: a weak target company, deadly
enemies and a blessing from on high.
LUKoil is the worst-run oil
company in Russia. The rest -- Yukos, Sibneft, TNK --
centralized their operations long ago. Oil industry
insiders say that only at LUKoil will you find private
wells drilled by mid-level managers with money stolen
from the company. At Yukos they'd rip your head off for
something like that. Alekperov has no shortage of
enemies, mostly former executives who helped build the
company and were later squeezed out. These people were
useless as managers and therefore harmless as enemies.
But the LUKoil chief does
face more serious opposition in the person of Semyon
Vainshtok, current head of Transneft. Vainshtok was a
founder of LUKoil who was later forced out of the
company. Vainshtok was responsible for boosting LUKoil's
production. He once headed Kogalymneftegaz, and there
were no private wells on his watch. Vainshtok's success
in Kogalym turned out to be so dangerous that he was
summoned to Moscow and charged with unifying LUKoil's
production structure in western Siberia. The task was
practically impossible, but Vainshtok pulled it off. As
a result, he was forced out of LUKoil and quickly found
himself -- thanks to the good graces of oligarch Roman
Abramovich -- in charge of Transneft. In Russia, people
of Vainshtok's caliber don't forgive or forget.
Last but not least --
sanction from on high. Everything that has happened with
LUKoil to this point is just reconnaissance in force.
Will an attack follow? Russia has a system of checks and
balances in business as well as politics. If there's an
attacker -- in the form of the Yeltsin-era "family" --
then defenders are not far behind: the St. Petersburg
chekists. So LUKoil isn't necessarily bound for the
chopping block. But its revenues are sure to be
redistributed -- between the aggressors and the
defenders.
Yulia Latynina is author
and host of "Yest Mneniye" on TVS.