The presidential election may be over, but a battle for influence is still raging within the walls of the Kremlin and White House. At the heart of the drama is Russia's energy policy director and President Vladimir Putin's close ally, Igor Sechin. And at stake is a planned billion-dollar privatization campaign in the energy sector.

file photo
Sechin has been painted up until recently as an invincible force out to quash Prime Minister Dmitry Medvedev's privatization plans, but the tide seems to be turning.

Speculation is rife that Sechin suffered a defeat last week in a rivalry with Deputy Prime Minister Arkady Dvorkovich, a young, reform-minded liberal in Medvedev's Cabinet in charge of the energy sector. In a June 15 decree, Putin appointed Sechin, the new chief executive of the state-owned Rosneft oil company, as the powerful secretary of a new energy commission ­ a move initially seen as a blow to the Cabinet.

But in a newer version of the decree published on the official Kremlin site last Thursday, a detailed list of Sechin's extraordinary powers in the commission was missing.

Putin's spokesman, Dmitry Peskov, attributed the incident to a technical misunderstanding.

"There was a mix-up in our department, which publishes documents," Peskov was quoted by Moskovsky Komsomolets as saying Thursday. "A working version of the decree was published. Right now the final version of the document is accessible on the official Kremlin website."

Yet sources close to the government say politics were behind the "mix-up."

The list of Sechin's powers was taken out to avoid upsetting Dvorkovich, who heads a similar energy commission in the Cabinet, Vedomosti cited a source close to Sechin as saying. Another Cabinet source cited by Kommersant said that Putin had signed the decree on June 15 but did not distribute it, because a number of top ministers, including Medvedev, were opposed to potential interference from Sechin.

Insiders were at odds on whether the new document would actually wind up curbing Sechin's powers ­ since Putin, as chairman of the commission, will still have the final say. The absence of a list of Sechin's powers "doesn't change anything," Kommersant quoted a source close to the commission as saying.

But oil executives suspected the incident may indicate Sechin is losing influence. "They are still dividing up influence between the presidential commission and the government commission, and not everyone wants to see Igor Sechin as the one overseeing things," Kommersant quoted an unnamed top manager at an oil company as saying.

Conflict with Dvorkovich?

Sechin stepped down from his post as deputy prime minister after Putin's inauguration in May, when Medvedev became prime minister. Tensions are said to be rife between Sechin and Dvorkovich, Medvedev's former top aide. Earlier last month, Sechin raised eyebrows when he suddenly called a meeting of oil executives just hours after Dvorkovich called a similar meeting, with managers unsure which meeting carried top priority.

The question of Sechin's influence goes far beyond personal rivalries. At the heart of the issue is a $100 billion privatization campaign announced by Medvedev during his presidency in 2010. A big chunk of those planned privatizations would have involved the government's stake in the oil and gas sector.

By May, the plans were under threat from two fronts. Economic uncertainty and falling stock prices meant it was a bad time to sell shares. Meanwhile, Putin's inauguration for a third presidential term meant more influence for Sechin ­ who has long been a proponent of keeping energy assets in state hands. Shortly after his inauguration, Putin warned against energy assets being "privatized for kopeks."

"Sechin is a proponent of privatizing [only a few single assets], and he wants the government to strengthen its positions in the energy sector, to accumulate oil and gas assets, perhaps selling them off later for a bigger profit," Dmitry Abzalov, an expert with the Center for Political Trends, told The Moscow News. "Dvorkovich's position is that everything must be sold off.

"There should be some middle ground. The two commissions were destined to go against each other. Now it's a matter of a battle."

Sechin has been gradually losing his positions for years, Vladimir Milov, a former deputy energy minister and president of the Institute for Energy Policy, wrote in Vedomosti last month. Last week's "mix-up" confirmed that such a forecast was "coming true," Milov told The Moscow News in an e-mail.

Experts agree that this infighting will continue for a while.

National interests at stake

"It's a battle for authority between the new guard and the old," Mikhail Subbotin, an energy expert who heads the CRP consulting group, told The Moscow News.

According to Subbotin, even the privatization debate is not about policy, but about control over resources. "Whoever planned this privatization campaign weren't planning it in the interests of the budget or the country, but to make a profit," he said. "Now the question is, is this the right time for a profitable sell-off, or not.

"One camp thinks that this government is here to stay, so now's not the time to sell. The other camp thinks that reform and change is inevitable, that the future's uncertain, and so they need to sell now."

Keywords: Russia, Economy, Business - Russia, Oil, Gas, Energy - Russian News - Russia

The presidential election may be over, but a battle for influence is still raging within the walls of the Kremlin and White House. At the heart of the drama is Russia's energy policy director and President Vladimir Putin's close ally, Igor Sechin. And at stake is a planned billion-dollar privatization campaign in the energy sector.

file photo
Sechin has been painted up until recently as an invincible force out to quash Prime Minister Dmitry Medvedev's privatization plans, but the tide seems to be turning.

Speculation is rife that Sechin suffered a defeat last week in a rivalry with Deputy Prime Minister Arkady Dvorkovich, a young, reform-minded liberal in Medvedev's Cabinet in charge of the energy sector. In a June 15 decree, Putin appointed Sechin, the new chief executive of the state-owned Rosneft oil company, as the powerful secretary of a new energy commission ­ a move initially seen as a blow to the Cabinet.

But in a newer version of the decree published on the official Kremlin site last Thursday, a detailed list of Sechin's extraordinary powers in the commission was missing.

Putin's spokesman, Dmitry Peskov, attributed the incident to a technical misunderstanding.

"There was a mix-up in our department, which publishes documents," Peskov was quoted by Moskovsky Komsomolets as saying Thursday. "A working version of the decree was published. Right now the final version of the document is accessible on the official Kremlin website."

Yet sources close to the government say politics were behind the "mix-up."

The list of Sechin's powers was taken out to avoid upsetting Dvorkovich, who heads a similar energy commission in the Cabinet, Vedomosti cited a source close to Sechin as saying. Another Cabinet source cited by Kommersant said that Putin had signed the decree on June 15 but did not distribute it, because a number of top ministers, including Medvedev, were opposed to potential interference from Sechin.

Insiders were at odds on whether the new document would actually wind up curbing Sechin's powers ­ since Putin, as chairman of the commission, will still have the final say. The absence of a list of Sechin's powers "doesn't change anything," Kommersant quoted a source close to the commission as saying.

But oil executives suspected the incident may indicate Sechin is losing influence. "They are still dividing up influence between the presidential commission and the government commission, and not everyone wants to see Igor Sechin as the one overseeing things," Kommersant quoted an unnamed top manager at an oil company as saying.

Conflict with Dvorkovich?

Sechin stepped down from his post as deputy prime minister after Putin's inauguration in May, when Medvedev became prime minister. Tensions are said to be rife between Sechin and Dvorkovich, Medvedev's former top aide. Earlier last month, Sechin raised eyebrows when he suddenly called a meeting of oil executives just hours after Dvorkovich called a similar meeting, with managers unsure which meeting carried top priority.

The question of Sechin's influence goes far beyond personal rivalries. At the heart of the issue is a $100 billion privatization campaign announced by Medvedev during his presidency in 2010. A big chunk of those planned privatizations would have involved the government's stake in the oil and gas sector.

By May, the plans were under threat from two fronts. Economic uncertainty and falling stock prices meant it was a bad time to sell shares. Meanwhile, Putin's inauguration for a third presidential term meant more influence for Sechin ­ who has long been a proponent of keeping energy assets in state hands. Shortly after his inauguration, Putin warned against energy assets being "privatized for kopeks."

"Sechin is a proponent of privatizing [only a few single assets], and he wants the government to strengthen its positions in the energy sector, to accumulate oil and gas assets, perhaps selling them off later for a bigger profit," Dmitry Abzalov, an expert with the Center for Political Trends, told The Moscow News. "Dvorkovich's position is that everything must be sold off.

"There should be some middle ground. The two commissions were destined to go against each other. Now it's a matter of a battle."

Sechin has been gradually losing his positions for years, Vladimir Milov, a former deputy energy minister and president of the Institute for Energy Policy, wrote in Vedomosti last month. Last week's "mix-up" confirmed that such a forecast was "coming true," Milov told The Moscow News in an e-mail.

Experts agree that this infighting will continue for a while.

National interests at stake

"It's a battle for authority between the new guard and the old," Mikhail Subbotin, an energy expert who heads the CRP consulting group, told The Moscow News.

According to Subbotin, even the privatization debate is not about policy, but about control over resources. "Whoever planned this privatization campaign weren't planning it in the interests of the budget or the country, but to make a profit," he said. "Now the question is, is this the right time for a profitable sell-off, or not.

"One camp thinks that this government is here to stay, so now's not the time to sell. The other camp thinks that reform and change is inevitable, that the future's uncertain, and so they need to sell now."