Kremlin Aide Enters Oil Boardroom

The Kremlin has increased its influence over the oil industry with the election of a top presidential administration official to the board of Transnefteprodukt, analysts said Tuesday.

Vladislav Surkov, deputy head of the presidential administration, was elected to the company's new nine-member board at the annual shareholders meeting Friday.

Transnefteprodukt is the state-owned monopoly in the transportation of oil products.

The news comes nearly a month after another deputy head of the presidential administration, Igor Sechin, was voted to chair state oil company Rosneft.

Media speculated Tuesday that Surkov now has a chance to be elected chairman of Transnefteprodukt. The previous chairman was former Energy Minister Igor Yusufov.

The date for the board meeting, at which a new chair will be elected, has not been set, a spokesman for Transnefteprodukt said.

Surkov was appointed deputy head of the presidential administration in 1999. Previously he held various positions in Menatep Bank, established by now-jailed Yukos shareholders Mikhail Khodorkovsky and Platon Lebedev. From March 1996 to February 1997 he served as vice president of Yukos-Rosprom financial group.

Industry analysts said Surkov's new position is unlikely to affect the legal assault on Yukos.


Steven Dashevsky, oil analyst with Aton brokerage, said he does not believe Surkov's position will have any influence on the Yukos affair.

"The fact that he had worked in Menatep does not mean a great deal. The industry in Russia is relatively small" and has a high rotation of people, said Chris Weafer, chief strategist at Alfa Bank. "It does not indicate whether Yukos is going to be in any better or different a situation than it is today."

But Weafer said that having yet another top official from the presidential administration on the board of an oil company is an example of the Kremlin tightening its grip on the industry.

"It is entirely consistent with the appointment of Sechin to Rosneft," he said, "along with [Industry and Energy Minister Viktor] Khristenko's statement that the state plans to have direct involvement in the future development of the oil industry."

Weafer said that with Surkov's election, the Kremlin's control is now reaching out to include oil products.

"People have always focused on Russian crude exports, which is now 4.6 million barrels a day. But there has been a huge growth in export of products, from 260,000 barrels a day in 1999 to 2 million a day now," he said.

HERE