Igor Sechin: The Kremlin's Oil Man
Vladimir Putin keeps a close eye on Russia's vital oil sector through a man who has proved his loyalty--but also has his own interests at heart.world Updated: Nov 12, 2009 15:55 IST
He's been depicted as Darth Vader in the Russian press and described as "the scariest person on Earth." Igor Sechin's official title is deputy prime minister, but within Russia, many consider him the most powerful individual in the country after Vladimir Putin. (Yes--that means he's more influential than the president.)
Sechin, who oversees the country's abundant natural resources, reigns over the storied Kremlin faction known as the siloviki--roughly, "powerful ones"--which includes the military and intelligence services. These men believe the state should control access to natural resources, and were against the appointment of Dmitry Medvedev to the presidency. An increasingly vocal cadre of pro-Medvedev cabinet ministers, some reform-minded, have made moves to quell the influence of the siloviki. But Sechin has, so far, kept his grip on power.
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There is little solid information about the man. Like many of Putin's cronies, Sechin is a St. Petersburg native. In the 1990s he worked in city government. Before that, it's widely believed he was a spy; Moscow sources confirm that he was a member of the GRU, the KGB's foreign-intelligence arm. His duties may have included working in Angola and Mozambique, probably as a translator. An American who worked directly with Sechin in the 1990s said Sechin showed utter loyalty to Putin--a fact that is key to his current standing.
Sechin's reputation is of a fearsome protector of the interests of the Russian state, particularly in the oil sector--like his chairmanship of $68-billion (2008 sales) state oil concern Rosneft. He is widely assumed to be a secret shareholder--though, like his presumed work in intelligence, this has never been proved. Sechin did not respond to several requests for comment.
"Does he own a stake in Rosneft? It doesn't matter," says Donald Jensen, a former ambassador to Moscow and consultant to the U.S. government on Russia. "It's more about where the money flows. Money and power and the intelligence services are all mixed together."
A notorious example of this cozy intersection was the Yukos affair. In 2003, then-billionaire Mikhail Khodorkovsky, who had built Yukos Oil into a Western-style firm, was convicted of tax fraud and embezzlement and imprisoned for 20 years (he's currently being tried on new charges). Soon after, Rosneft became the owner of Yukos' assets. Khodorkovsky has publicly accused Sechin of orchestrating the Yukos affair.
Sechin's position as leader of the company--and therefore a proxy of the Russian government--gives him unilateral authority to make moves that benefit Rosneft (and possibly himself).
For example, last month, OGK-1, an energy-generation company Sechin heads, announced it would no longer use Gazprom gas. The move could cost the gas monopoly $600 million. "Sechin is central to this," says Paul Saunders, executive director of the Nixon Center in Washington.
Rosneft also drills in Chechnya in cooperation with a Chechen government oil company. As Russia has attempted to increase its access to Chechnya's high-quality crude and its petroleum transportation network, a number of unusual incidents have occurred over the last few years that improve Rosneft's position, including the seizure of ports, the transfer of oil assets and violence. Rosneft has not been directly implicated in these events.
Sechin's sphere of influence has broadened beyond Russia. In China, he is currently negotiating a 20-year, $25 billion oil-for-loans supply deal. In the last few months he has also dropped by Venezuela, Cuba and Turkey to talk oil--and to demonstrate that Russia doesn't need the West's money.
With oil prices below their high of $150 in 2008, Putin has recently suggested that Russia might reopen its markets to foreign capital and restructure its state industries. Political analysis firm Stratfor, based in Austin, Texas, says the move could destabilize Sechin's footing in the Kremlin.
Still, Russia's continuing dependence on oil means Sechin will likely maintain a significant hold on his power base.