Petrostate: Putin, Power, and the New Russia

Introduction

1. SKEIN News, November 30, 2005.

2. Financial Times, April 24, 2006, 2.

3. David Johnson’s Russia List, no. 26 (March 3, 2007).

4. Eurasia Daily Monitor, Jamestown Foundation, September 21, 2006; Moscow Times, March 23, 2007.

5. John D. Grace, Russian Oil Supply: Performance and Prospects (Oxford: Oxford University Press, 2005), 16.

6. Marshall I. Goldman, “The Russian Disease,” International Economy (Summer 2005), 27.

Chapter 1

1. Robert W. Tolf, The Russian Rockefellers (Stanford: Hoover Institution Press, 1976), 40.

2. G. Segal, “The Oil and Petrochemical Industry in the Soviet Union” (London: mimeo., undated), 1.

3. Tolf, 41–42.

4. Iain F. Elliot, The Soviet Energy Balance (New York: Praeger, 1974), 70.

5. Elliot, 70.

6. Daniel Yergin, The Prize (New York: Simon & Schuster, 1991), 57.

7. Segal, 2; V. I. Pokrovskii, Sbornik Svedenii Po Istorii I Statistike Vneshnei Torgovli Rossii (St. Petersburg: Department tamozhennykh sbor’, 1902), Vol. I, 217.

8. Pokrovskii, 217.

9. Elliot, 70; Tolf, 44.

10. Tolf, 40. This is an excellent study of Nobel’s life and work. Much of the description of Nobel’s activities in the remainder of this chapter is taken from this book and the study by Pokrovskii. See also Steve Le Vine, The Oil and the Glory (New York: Random House, 2007), chapters 1–3.

11. Pokrovskii, 218.

12. Tolf, 55.

13. Pokrovskii, 219.

14. Segal, 3.

15. Pokrovskii, 220.

16. Tolf, 97.

17. Tolf, 95.

18. Pokrovskii, 221.

19. Tolf, 48, 71–72, 99.

20. Pokrovskii, 221.

21. U.S. Bureau of the Census, Historical Statistics of the United States, Colonial Times to 1970, bicentennial ed., Pt. I (Washington, D.C., 1975), 597.

22. Pokrovskii, 215.

23. Pokrovskii, 142.

24. Pokrovskii, 215; Peter Lyashchenko, History of the National Economy of Russia to the 1917 Revolution (New York: Macmillan, 1949), 689.

25. Zbynek Zeman and Jan Zoubek, Comecon Oil and Gas (London: Financial Times, 1977), 9; Tolf, 188–92.

26. Tolf, 192–93.

27. Pokrovskii, 217; Segal, 2.

28. Yergin, 131.

29. Yergin, 133.

30. Lyashchenko, 632.

31. Exports in 1913, however, did slightly exceed those in 1905 by 3,000 tons.

32. Trudy statisticheskogo otdeleniie, Departament tamozhenny sbor’, Obzor’ Vneshnei torgovli Rossii za 1901 (St. Petersburg: Department tamozhenny sbor’, 1903), 9 (hereafter Vneshnei torgovli Rossii and the appropriate year); Vneshnei torgovli Rossii 1915, 8.

33. A. V. Venediktov, Organizatsiia gosudarstvennoi promyshlennosti v SSS R (Leningrad: Izdatel’stvo Leningradskogo Universiteta, 1957), 185.

34. Tolf, 215.

35. Tolf, 217.

36. Segal, 5.

37. Anthony C. Sutton, Western Technology and Soviet Economic Development, Vol. I, 1917 to 1930 (Stanford: Hoover Institution Press, 1968), 41; Tolf, 222.

38. Sutton, Vol. I, 18.

39. Sutton, Vol. I, 19, 30, 122; the Japanese did not come in until 1925.

40. Sutton, Vol. I, 37.

41. Sutton, Vol. I, 10, 23.

42. Sutton, Vol. I, 82.

43. Venediktov, Vol. I, 185.

44. Segal, Vol. I, 16.

45. Foreign Trade, September 1967, 18.

46. Sutton, Vol. I, 41.

47. Foreign Trade, September 1967, 17.

48. Some of that might not have gone to the United States directly but to Standard Oil for reshipment to the Middle and Far East.

49. Ministersvo vneshnei torgovli SSSR (hereafter MVT SSSR), Vneshniaia torgovlia SSSR za 1918–1940 (Moscow: Vneshtorgizdat, 1960), 657 (hereafter VT SSSR with the appropriate year).

50. VT SSSR, 1918–1940, 528.

51. Sutton, Vol. I, 16, 40. Later on Sutton refers specifically to 1928 when he says petroleum amounted to 19.1 percent of all earnings. His assertions are then repeated by Tolf and Segal.

52. VT SSSR, 1914–1940, 94.

53. Segal, 12.

54. Elliot, 72; Grace, 14.

55. Elliot, 74–75, 89; Robert Campbell, The Economics of Soviet Oil and Gas (Baltimore: Johns Hopkins University Press, 1968), 124–25.

Chapter 2

1. Pravda, December 10, 1963, 1; VT SSSR, 1913–1940, 58, 144.

2. See Table 1.2; Elliot, 74; Anthony C. Sutton, Western Technology and Soviet Development, Vol. II, 1930 to 1945 (Stanford: Hoover Institution Press, 1971), 90.

3. Sutton, Vol. II, 89; Anthony C. Sutton, Western Technology and Soviet Development, Vol. III, 1945 to 1965 (Stanford: Hoover Institution Press, 1973), 38–39, 135–36.

4. Campbell, Economics, 126.

5. Campbell, Economics,127–28.

6. Campbell, Economics,125; Robert W. Campbell, Trends in the Soviet Oil and Gas Industry (Baltimore: Johns Hopkins University Press, 1976), 27.

7. Elliot, 96; “Europe-Sibir,” Ekonomika i organizatsiia promyshlennogo proizvodstva (hereafter EKO), no. 4, 1976, 160–67.

8. Total Information, no. 68, 1976, Geneva, Switzerland, 2.

9. Total Information, 4; Elliot, 97; The Review of Sino-Soviet Oil, April 1979, 50.

10. Sutton, Vol. I, 24; Tolf, 65, 182.

11. Campbell, Economics, 102–20, 126–28; Joseph S. Berliner, The Innovation Decision in Soviet Industry (Cambridge: MIT Press, 1976).

12. Campbell, Economics, 93.

13. Campbell, Economics, 109.

14. Campbell, Economics, 93.

15. Pravda, February 28, 1978, 2.

16. Review of Sino-Soviet Oil, November 1977, 10.

17. Current Digest of the Soviet Press, February 14, 1973, 6.

18. Pravda, November 20, 1962, 4.

19. Izvestia, October 15, 1984, 47.

20. Pravda, January 27, 1978, 2; Daniel Park, Oil and Gas in COMECON Countries (London: Kogan Page, 1979), 67.

21. Turkmenskaia iskra, December 6, 1977, 2; Literaturnaia gazeta, January 18, 1978, 10.

22. CIA Gas, July 1978, 2.

23. Marshall I. Goldman, USSR in Crisis (New York: W. W. Norton, 1983), 66.

24. Marshall I. Goldman, The Enigma of Soviet Petroleum, Half Full or Half Empty (London: George Allen & Unwin, 1980).

25. Goldman, USSR in Crisis, 136–38.

26. Goldman, USSR in Crisis, 144.

27. Yergin, 503.

28. MIG Soviet Foreign Aid (New York: Praeger, 1967), 97.

29. Moscow Narodny Bank Bulletin, February 4, 1971, 2.

30. Yergin, 50; Richard Matzke, “Russia and the USA: No Longer Rivals, Not Yet Partners,” Demokratizatsiya, 15, no. 4 (Fall 2007), 371.

31. Financial Times, November 27, 2006, 4.

32. Peter Schweizer, Victory (New York: Atlantic Monthly Press, 1994).

33. Schweizer, 219.

34. Schweizer, 242.

35. Yegor Gaidar, Gibel’ Imperii (Moscow: Rosspen, 2006), 224–31; Yegor Gaidar, “The Collapse of the Soviet Union: Lessons for Contemporary Russia,” seminar, American Enterprise Institute, Washington, D.C., November 13, 2006.

36. Gaidar, Gibel, 227.

37. Gaidar, Gibel, 286, 287, 328.

38. Graham Allison and Robert Blackwell, “America’s Stake in the Soviet Future,” Foreign Affairs, 70, no. 3 (Summer, 1991), 77–97.

39. Gaidar, Gibel, 270, 315, 337.

40. Gaidar, Gibel, 337.

41. Gaidar, Gibel, 244.

42. Schweizer, xii.

43. Gaidar, Gibel, 223, 310.

44. Gaidar, Gibel, 204, 213, 337.

Chapter 3

1. “The Unofficial Economy in Transition,” Brookings Papers on Economic Activity, no. 2, 1997, 159.

2. The Moscow Times, May 8, 2001.

3. Marshall Goldman, The Piratization of Russia: Russian Reform Goes Awry (New York: Routledge, 2003), 106.

4. Goldman, The Piratization of Russia, 117.

5. Nina Poussenkova, “Rosneft as a Mirror of Russia’s Evolution,” Pro et Contra Journal, 10, no. 2 (June 2006), 11.

6. Washington Post, August 22, 2001; Chrystia Freeland, Sale of the Century (Toronto: Doubleday, 2000), 175.

7. Goldman, The Piratization of Russia, 150; Moscow Times, April 4, 2000; Moscow News, June 28, 1999, 2.

8. Moscow Times, April 11, 2000; Goldman, The Piratization of Russia, 151.

9. Moscow Times, April 25, 2006.

10. Goldman, The Piratization of Russia, p.143.

11. Interview, December 8, 2000.

12. Goldman, The Piratization of Russia, 126.

13. Goldman, The Piratization of Russia, 119.

14. New York Times, November 21, 2006, C11.

15. Observer, January 8, 2006, Business section, 1.

16. U.S. Court of Appeals for the Second Circuit, August Term, 2004, Docket No. 04–1357-cv, 8–9.

17. Goldman, The Piratization of Russia, 144.

18. Wall Street Journal, March 24, 2007, A3; Business Week, April 19, 2007; Financial Times, March 24, 2007, 9.

19. Wall Street Journal, September 15, 2006; Russian Analytical Digest, August 2006, 11.

20. New York Times, November, 24, 2002, F1.

Chapter 4

1. Marshall Goldman, “Russia’s Bleeding Heartland,” Central European Economic Review, September 1997, 6.

2. Anders Aslund, How Russia Became a Market Economy (Washington: Brookings, 1995); Richard Layard and John Parker, The Coming Russian Boom (New York: Free Press, 1996).

3. Boston Globe, October 28, 1998, A8.

4. Financial Times, July 17, 2003, 14.

5. Wall Street Journal, October 23, 1998, A3.

6. Grace, 80, 83.

7. Wall Street Journal, May 24, 2006, A6.

8. Zhou Dadi, “Sustainable Energy Development in China: Challenge and Opportunities,” March 21, 2007, mimeograph, 1.

9. Financial Times, May 2, 2007, 10.

10. Dadi, 1.

11. Financial Times, July 4, 2006, 3

12. Dadi, 2: ITAR TASS, December 6, 2006.

13. China Daily, September 18, 2007, 1; Financial Times, November 30, 2007, 4.

14. Financial Times, July 19, 2007, 7.

15. Wall Street Journal, October 7, 2006.

16. Grace, 166; Mikhail Khodorkovsky, Presentation to German Electricity Association Congress, 2000, at www.yukos.com/exclusive/exclusive.asp?ID=6085.

17. David Johnson’s Russia List, January 2, 2007, No. 1, Items 6, 7.

18. Moscow Times, September 7, 2006, 7; Prime-TASS, September 1, 2006.

19. Moscow Times, August 26, 2006; Financial Times, June 17, 2006, 1.

20. Rodnaya Gazeta, no. 38, October 5, 2006; Moscow Times, September 7, 2006; August 25, 2006.

21. “The Russian Economy,” World Bank, April, 2006, Moscow Office, 9.

22. Financial Times, July 26, 2006, 21.

23. Wall Street Journal, January 22, 2007, A1.

24. Gazprom in Questions and Answers (Moscow: Gazprom, 2006), 6.

25. David Johnson’s Russia List, January 2, 2003, 11.

26. Moscow Times, December 5, 2000; New York Times, November 24, 2002, 4; Moscow News, June 8, 2005, 9.

27. International Herald Tribune, July 24, 2004.

28. New York Times, November 24, 2002, F1; Moscow Times, September 24, 1997; Financial Times, September 1, 1994, 2.

29. Russian Journal, November 29, 1999.

30. Wall Street Journal, September 1, 1994, A6.

31. Annual Arden House Seminar, Liz Williamson, Conoco, March 18, 1995.

32. Moscow Times, December 5, 2000; Houston Chronicle, December 30, 2004.

33. Discussion with senior ConocoPhillips executives, September 10, 2003.

34. Initially, in September 2004 it bid $2 billion to buy the 7.5 percent of LUKoil’s share held by the government. By March 2005 it had acquired 11.3 percent; three months later, 12.6 percent; and by December 3, 2005, it owned 16.1 percent. It purchased the remaining 3.9 percent in 2006 for $3 billion, for combined expenditures of over $7.5 billion. New York Times, June 3, 2005, C4; Prime-TASS, October 3, 2006.

35. Moscow Times, August 30, 2004, 5.

36. New York Times, October 28, 2004, C8.

37. David Johnson’s Russia List, June 5, 2007, no. 127, 135.

38. New York Times, December 1, 2005, C1, 8.

39. Moscow Times, October 4, 2006; Vedomosti, October 24, 2005; David Johnson’s Russia List, October 25, 2005, 9277, item #9.

40. FC Novosti, Ia, October 10, 2007, 12:22; Financial Times, October 11, 2007, 2.

41. Wall Street Journal, January 30, 2007, A3.

42. Asian Wall Street Journal, November 8, 2006, 4.

43. Insight TNK-BP International News Letter, Autumn 2006, 2.

44. Financial Times, July 4, 2006, 3.

45. Financial Times, September 12, 2006, 15; October 12, 2006, 8.

46. Wall Street Journal, January 25, 2007, A12; International Energy Agency Outlook, 2006.

47. Financial Times, October 16, 2006, 13.

48. Bernard A. Gelb, “Russian Oil and Gas Challenges,” CRS Report for Congress, Library of Congress, Washington, January 3, 2006, CRS 2; Taken from BP Statistical Review of World Energy, 2005 and 2006, 6; Oil and Gas Journal, December 2004. John Grace estimates the Russians have proven reserves of 68.2 billion barrels. Grace, 179.

49. Wall Street Journal, September 30, 2004, A1; New York Times, October 28, 2004, C8.

50. New York Times, October 28, 2004, C8.

51. The careful geologist John Grace tends to be considerably more skeptical. Grace, 216.

52. Prime-TASS Business Newswire, April 26, 2007; Financial Times, April 25, 2007, 176 Moscow Times, August 13, 2007.

53. Jonathan P. Stern, The Future of Russian Gas and Gazprom (Oxford: Oxford University Press, 2005), 144.

Chapter 5

1. For a more thorough discussion as well as a translation of an article Putin wrote on this theme, see Harley Balzer, “Vladimir Putin’s Academic Writings and Russian Natural Resource Policy,” Problems of Post-Communism (January/February 2006), 48–54. See also Robert Price, “Putin’s National Champions: Domestic and International Implications,” Master’s Thesis, Harvard University, August 2007, 6–8.

2. Balzer, 51.

3. Balzer, 52.

4. Balzer, 53.

5. Balzer, 54.

6. Washington Times, March 31, 2006; Pittsburgh Tribune Review, March 28, 2006.

7. Kommersant, April 6, 2006.

8. Financial Times, May 4, 2007, 18.

9. Stern, 170.

10. Stern, 170.

11. Stern, 170.

12. Interview with Boris Berezovsky, October 22, 2003, London.

13. Grace, 171.

14. Grace, 120; Moscow News, March 24, 2004, 9.

15. Financial Times, December 20, 1999, 11. Not by any means unique to Yukos, transfer pricing was a widely used practice among Russian oil companies, including Rosneft, the state-owned company that was to be the main beneficiary of Yukos’s collapse. Kommersant, February 6, 2007, 1.

16. Prime-TASS, March 6, 2006.

17. Moscow Times, April 25, 2006; July 24, 2004; August 7, 2007; BBC, July 26, 1998; Financial Times, July 27, 2004, 1, 9; Times of London, August 9, 2004; Independent, July 27, 2004, 22.

18. Moscow Times, April 25, 2006.

19. Moscow Times, April 25, 2006.

20. Wall Street Journal, August 26, 1999, A1; September 3, 1999, 2; Moskovskaia Pravda, December 17, 1994, 5.

21. Moscow Times, January 21, 2002.

22. Grace, 121.

23. Seminar, John Pappalardo, lawyer for Khodorkovsky, October 25, 2005; Wall Street Journal, April 27, 2004, A1.

24. Moscow Times, October 25, 2006.

25. Wall Street Journal, April 27, 2004, A12.

26. Wall Street Journal, April 27, 2004, A12.

27. Wall Street Journal, April 12, 2004, A12.

28. New York Times, February 11, 2007, A4.

29. Nina Poussenkova, Pro et Contra Journal, 10, no. 2 (June 2006).

30. Bruce Bean, “Russia’s Yukos Affair: The Use and Abuse of Law,” photocopied 2005, 5.

31. Financial Times, November 9, 2005, 16.

32. Financial Times, November 9, 2005, 16; Vedomosti, February 20, 2003.

33. Interview at Davis Center, Harvard University, December 6, 2004.

34. Kompromat.ru, July 4, 2003.

35. Moscow News, March 3, 2004, 3; March 24, 2004, 9.

36. Moscow Times, July 15, 2003.

37. Seminar, Davis Center, October 25, 2005.

38. Moscow Times, February 27, 2007.

39. Kommersant, April 25, 2006.

40. Mikhail Khordorkovsky, “What Is the Morality Tale?” Panel Discussion at the University of Pennsylvania Law School, December 7, 2006.

41. Seminar, Davis Center, Harvard University, October 25, 2005; Panel Discussion, University of Pennsylvania Law School, December 7, 2006.

42. Moscow Times, February 27, 2007.

43. Financial Times, March 26, 2007, 16; Kommersant, February 6, 2007, 1.

44. New York Times, March 17, 2007, A3.

45. Moscow Times, April 5, 2007.

46. Prime-TASS, February 15, 2007.

47. Moscow Times, February 15, 2007; Wall Street Journal, February 22, 2007, A4.

48. Wall Street Journal, February 22, 2007, A4.

49. Financial Times, March 26, 2007, 16; August 20, 2007; Moscow Times, July 23, 2007, A4.

50. Moscow Times, March 28, 2007; New York Times, March 28, 2007, C3.

51. New York Times, March 27, 2007, A3; March 28, 2007, C3; Wall Street Journal, March 28, 2007, A10.

52. Moscow Times, March 28, 2007.

53. Moscow Times, March 28, 2007.

54. Wall Street Journal July 12, 2007, A7; Financial Times, January 29, 2008, 18.

55. Moscow Times, February 27, 2007.

56. Financial Times, March 12, 2004.

57. Financial Times, October, 11, 2005, 5; Washington Post, March 4, 2004.

58. Financial Times, October 11, 2005, 5.

59. Independent, June 18, 2004, 1.

60. Wall Street Journal, July 31, 2007, A2.

61. Moscow Times, August 1, 2007.

62. Moscow Times, March 7, 2006.

63. Financial Times, November 4, 1998, 2; Moscow Times, April 30, 2004; July 21, 2006; Grace, 136.

64. New York Times, July 3, 2004, B1.

65. Phone conversation with Jeff Larson of Sowood Capital, agent for the Harvard Management Company, February 28, 2007.

66. Business Week, October 23, 2006, 52.

67. Grace, 142.

68. Financial Times, March 22, 2007, 18.

69. Wall Street Journal, March 24, 2007, A3; Financial Times, March 24, 2007, 1.

70. Moscow Times, October 16, 2006; February 27, 2007. They have also been accused of pollution and the alleged cutting of trees while building pipelines.

71. Financial Times, February 28, 2007, 21; Moscow Times, March 1, 2007.

72. New York Times, October 6, 2006, C4.

73. Wall Street Journal, September 22, 2006, A6; Financial Times, September 22, 2006, 2.

74. Financial Times, April 20, 2007, 4: Moscow Times, June 9, 2007, 6.

75. Financial Times, September 22, 2006, 2; Fiona Hill and Florence Fee, “Fueling the Future: The Prospects for Russian Oil and Gas,” Demokratizatsiya (Fall 2002), 481.

76. Prime-TASS, March 1, 2007; Moscow Times, June 22, 2007.

77. Moscow Times, March 1, 2007; February 27, 2002.

78. Financial Times, February 28, 2007, 21; March 22, 2007, 18.

79. Forbes.com, August 23, 2007, 11:50 a.m.

80. Grace, 194.

81. Moscow Times, February 27, 2007.

82. Moscow Times, March 23, 2007.

83. Financial Times, September 22, 2004, 21; August 5, 2005, 14.

84. Yergin, 456, 583.

Chapter 6

1. Yergin, 742–43.

2. Yergin, 742–43; Stern, 215.

3. Yergin, 743.

4. Yergin, 743.

5. Balzer, 48.

6. Bernard A. Gelb, “Russian Oil and Gas Challenges,” Congressional Research Service Report for Congress, Library of Congress, January 3, 2006; Sunday Times, July 9, 2006, 24; BP Statistical Review of World Energy, 2006, 22; Gazprom in Questions and Answers, 20.

7. BP Statistical Review.

8. Financial Times, May 16, 1997, 3; May 22, 1997, 18; May 27, 1997, 1; Russia Review, July 2, 1997, 23.

9. See Introduction.

10. Moscow Times, May 29, 2001.

11. Interview, June 21, 2001.

12. Moscow Times, March 13, 2007; New York Times, July 13, 2006, 10; Stern, 106.

13. Moscow Times, March 13, 2007.

14. Moscow Times, May 26, 2006.

15. President Putin’s State of the Nation Speech to Duma, May 10, 2006.

16. Valdai Hills Discussion Group, September 4, 2006.

17. Gazpromistan was coined by Edward Lucas, a writer for The Economist.

18. Prime-TASS, March 1, 2007.

19. Financial Times, July 14, 2006, 9.

20. Financial Times, April 28, 2006, 2.

21. Financial Times, July 14, 2006, 9.

22. Novaia Gazeta, August 21, 2006; Kompromat.ru, “Samikh Bogatikh na Gaze”; Financial Times, April 27, 2006, 2; April 28, 2006, 2.

23. Financial Times, April 28, 2006, 2.

24. Wall Street Journal, April 21, 2006, A6; September 22, 2006, 4.

25. Wall Street Journal, September 22, 2006, A4.

26. Wall Street Journal, September 22, 2006, A4.

27. Moscow Times, April 24, 2007.

28. Moscow Times, October 4, 2006.

29. Moscow Times, October 4, 2006.

30. Wall Street Journal, December 23, 2006, A4; Financial Times, December 23, 2006, 2.

31. Moscow Times, March 1, 2007. Seminar, Davis Center, December 8, 2006, Zurab Noghaideli, Prime Minister of Georgia.

32. Moscow Times, March 20, 2007; Eurasia Daily Monitor, Jamestown Foundation 4, no. 97 (May 17, 2007), 2.

33. Financial Times, February 28, 2007, 8.

34. Financial Times, December 14, 2006, 1.

35. BBC Monitoring, January 4, 2007, 13:00–1.

36. New York Times, January 13, 2007, A4.

37. Financial Times, August 3, 2007, 1.

38. Financial Times, December 14, 2006, 1; Rossiiskaia gazeta, May 21, 2007, 1.

39. Eurasia Daily Monitor, Jamestown Foundation 3, no. 57 (March 23, 2006), 4; Eurasia Daily Monitor, Jamestown Foundation 3, no. 190 (October 16, 2006), 1.

40. Financial Times, May 4, 2006.

41. New Europe, August 2, 2006.

42. New Europe, April 25, 2007.

43. Financial Times, December 14, 2006, 3.

44. Wall Street Journal, December 4, 2006, A6.

45. Eurasia Daily Monitor, Jamestown Foundation 4, no. 140 (July 19, 2007).

46. Eurasia Daily Monitor, Jamestown Foundation 4, no. 51 (March 14, 2007).

47. Eurasia Daily Monitor, Jamestown Foundation 3, no. 174 (September 21, 2006); 4, no. 51 (March 14, 2007).

48. Agence France-Presse, March 14, 2007.

49. Moscow Times, March 23, 2007.

50. Vedomosti, June 25, 2007, B3.

51. Eurasia Daily Monitor, Jamestown Foundation 4, no. 144 (July 25, 2007), 4; Financial Times, August 20, 2007, 14.

52. Moscow Times, February 15, 2007. To broaden the base, both German companies also agreed to transfer 4.5 percent of their holdings to Dutch Gasunie.

53. Russia Profile 4, no. 2 (March 2007), 48.

54. Wall Street Journal, March 31, 2006, A15.

55. Financial Times, April 3, 2006, 2.

56. Moscow Times, April 3, 2006.

57. Financial Times, April 3, 2006, 2.

58. Financial Times, April 15, 2006.

59. Stern, 144.

60. Eurasia Daily Monitor, Jamestown Foundation 4, no. 160 (August 16, 2007), 2.

61. Moscow Times, March 31, 2006.

62. Financial Times, April 22, 2005, 14.

63. Mosnews.com, February 24, 2005; Financial Times, December 22, 2005, 14.

64. New Europe, February 28, 2007.

65. Business Wire, Prime-TASS, April 10, 2007; Eurasia Daily Monitor, Jamestown Foundation 4 (April 23, 2007); Financial Times, September 21, 2007, 3.

66. Financial Times, December 12, 2007, 6.

67. The Economist, February 22, 2007.

68. Kennan Institute Meeting Report 24, no. 3 (2006).

69. http://HRRP;/SVT.SE/SVT/JSP/CROSSLINK.JSP?D=53332&A=717462.119=SENASTENYTT_613854&1POS=RUBRIK_717462E

70. Eurasia Daily Monitor, Jamestown Foundation 4, no. 68 (April 6, 2007).

71. Eurasia Daily Monitor, Jamestown Foundation 4, no. 53 (March 16, 2007); New Europe, January 24, 2007.

72. Eurasia Daily Monitor, Jamestown Foundation 4, no. 53 (March 16, 2007).

73. A study prepared jointly by the Council on Foreign and Defense Policy and the State University, Higher School of Economics in Moscow argued that the geopolitical-energy situation “in the Caspian region is generally developing in favor of the West.” Meeting with criticism, the authors decided to revise their findings to show a greater likelihood of Russian progress and they dropped the conclusion that “Russia’s influence in the Caspian region will be minimized.” The Council on Foreign and Defense Policy, State University, Higher School of Economics, RIO-Center, The World around Russia: 2017: An Outlook for the Midterm Future, Moscow, 2007, 236; Vremya Novosti, January 11, 2007, 2; Current Digest of the Post-Soviet Press, January 31, 2007, 5.

74. Asia Times Online, May 27, 2006.

75. Financial Times, January 23, 2007, 19; August 20, 2007, 6.

76. Stern, 144.

77. This is not unique to Russia. The U.S. government among others has used similar tactics as when it imposed an economic blockade against Cuba and earlier against China.

78. Financial Times, May 30, 2006, 4.

79. Financial Times, November 27, 2006.

80. Rossiyskaia Gazeta, November 29, 2006.

81. Kremlin, Russia, February 1, 2007.

82. Stern, 144.

83. Stern, 103.

84. Vremya Novostei, January 30, 2007, 1.

85. Financial Times, November 15, 2006, 3; December 19, 2006, 3; March 26, 2007, 16; Oreanda RIA, December 20, 2000; Prime-TASS, March 26, 2007 (20:48).

86. Financial Times, November 1, 2007, 3.

87. Gazprom Web site, March 15, 2007. Just to fill in the other pieces of this matrix, E.ON equity’s ownership in Gazprom comes from a direct investment by E.ON when it bought up 3.5 percent of Gazprom stock and from an investment by Gerosgaz, a company that bought another 3 percent of Gazprom. To make it all the more confusing, Gerosgaz is a joint venture that E.ON owns with, believe it or not, Gazprom. In other words, Gazprom owns part of itself. That is why this part of what should be the main text is in a footnote.

88. Goldman, The Piratization of Russia, 163; Marshall I. Goldman, Détente and Dollars (New York: Basic Books, 1975), 134–36, 163.

89. Ria Novosti, March 20, 2007; Eurasia Daily Monitor, Jamestown Foundation (February 21, 2007). For a more complete list see Stern, 113.

90. Financial Times, February 4, 2006, 6; Eurasia Daily Monitor, Jamestown Foundation 4 (August 16, 2007).

91. ITAR TASS, June 22, 2006.

92. Financial Times, April 20, 2006, 4.

Chapter 7

1. David Johnson’s Russia List 4, no. 127 (June 5, 2007).

2. Financial Times, May 29, 2007, 2.

3. Argumenty i Fakty, March 12, 2001, 3.

4. Washington Post, October 17, 2006, A1.

5. New York Times, October 18, 2006, A15; Washington Post, October 18, 2006, A8.

6. Kommersant, October 18, 2006.

7. New York Times, January 4, 2007, A1; Kommersant, October 18, 2006; Washington Post, December 31, 2005, A1.

8. Washington Post, October 17, 2006, 4.

9. Since these raids were conducted less than a month before the mid-term November national elections, Congressman Weldon charged it was a political attack designed to support his Democratic opponent. Given that the Republican Party controlled the Justice Department at the time, this seemed far-fetched. Yet it does add another layer of complexity to the charges that the Department of Justice under Attorney General Alberto Gonzales had at the time drawn up a list of local U.S. attorneys who were to be fired for failure to investigate corruption and election fraud by Democrats. The U.S. attorney in the Weldon case did, at least, seem resolute given that the target was a ten-term Republican who, in the wake of all these scandals, went down to defeat.

10. Financial Times, April 9, 2007, 2; New York Times, March 5, 2007, A11.

11. Wall Street Journal, April 5, 2007, A2; BP Statistical Review, 30.

12. Financial Times, April 9, 2007, 2; New York Times, March 5, 2007, A11; BP Statistical Review, June 2007, 24, 27, 30.

13. Financial Times, April 9, 2007, 1.

14. Eurasia Daily Monitor, Jamestown Foundation 4, no. 30 (February 12, 2007), 4.

15. Financial Times, January 5, 2008, 1, 4.

16. Moscow Times, March 5, 2007, International Herald Tribune, December 27, 2007, 3.

17. David Johnson’s Russia List, March 7, 2007, no. 55, item 35; Financial Times, March 12, 2007, 11.

18. Financial Times, November 29, 2007, Special Section, 3.

19. Financial Times, July 6, 2007, 6.

20. Leslie Dienes, “Natural Gas in the Context of Russia’s Energy System,” Demokratizatsiia, 15, no. 4 (Fall 2007), 408.

21. Moscow Times, March 5, 2007.

22. Kommersant, December 25, 2006, 8.

23. Moscow Times, March 5, 2007; Stern, 24.

24. Financial Times, June 1, 2007, 16; Eurasia Daily Monitor, Jamestown Foundation 4, no. 114 (June 19, 2007), 1.

25. Moscow Times, February 27, 2007.

26. Moscow Times, February 27, 2007.

27. Financial Times, August 31, 2007, 3.

28. Meeting of the Valdai Hills Discussion Group, Moscow, September 7, 2006; Moscow Times, February 27, 2006.

29. Grace, 194.

30. Financial Times, March 21, 2007, 21.

31. New York Times, July 13, 2006, A10.

32. Moscow Times, March 1, 2007.

33. Kommersant, December 25, 2006, 8.

34. FC Novosti, Russian Financial Central Monitoring, August 24, 2007.

35. Kommersant Russia Daily Online, August 31, 2007; Kremlin.ru, April 26, 2007.

36. Moscow Times, July 18, 2007.

37. Judy Dempsey, “In Russian energy plan, coal is a question mark,” International Herald Tribune, December 27, 2007, 3.

38. Marshall I. Goldman, “The Russian Disease,” International Economy (Summer 2005), 27.

39. Moscow Times, March 3, 2005; March 4, 2005.

40. Moscow Times, March 3, 2005.

41. Moscow Times, March 4, 2005.

42. Moscow Times, March 4, 2005.

43. Olga Kryshtanovskaia and Stephen White, “Putin’s Militocracy,” Post-Soviet Affairs 19, no. 4 (2003), 294.

44. Kommersant, November 30, 2007.

45. New York Times, December 12, 2007, C10.

46. Kremlin.ru, September 9, 2006, Transcript of meeting with participants in the third meeting of the Valdai Hills Discussion Club; Putin referred to Andrei Shleifer and Jonathan Hay.

47. V. Kleiner, “Korporativenoe upravlenie i effek”tivnost deliatel’nost kompani,” Voprosy ekonomikii, no. 3 (2006), 98.

48. Michael D. Cohen, “Russia and the European Union: An Outlook for Collaboration and Competition in European Natural Gas Markets,” Demokratizatsiya, 15, no. 4 (Fall 2007), 381.

49. Vremya novosti, August 31, 2007, 7; Moscow Times, October 4, 2007.

50. Novaya Gazeta, January 18, 2007, 2; Noviye Izvestiai, February 1, 2007, 5.

51. Financial Times, December 1, 2006, 4; Rossiiskaia Gazeta, October 3, 2005.

52. Chicago Tribune, September 27, 2006, 17.

53. Financial Times, December 12, 2007, 9.

54. Wall Street Journal Asia, November 9, 2007, 11.

55. Izvestia, November 27, 2007.

56. Businessweek.com, March 6, 2007; David Johnson’s Russia List 55, no. 33 (March 7, 2007).

57. Financial Times, February 4, 2006, 6.

58. Other purchases include Severstall’s acquisition of Rouge Industries in Dearborn, Michigan, and Lucchine Steel in Italy. Other recent purchases or green field construction include the Magnitigorsk Iron and Steel company’s decision to build a cold rolled steel mill in Ohio; the EVRAZ purchase of Oregon Steel, Highveld Steel, and Vanadium; Norilsk Nickel’s purchase of the Stillwater Mining Co. in Montana; the LionOre Canadian nickel mining company as well as the OM Mining Company; and Gazprom’s purchase of the British gas marketing company, Pennine Natural Gas along with its affiliate, Natural Gas Shipping Services and what someday is expected to be the purchase of the much larger Centrica, which in turn owns British Gas. Wall Street Journal, July 17, 2007, A2; Financial Times, July 19, 2007, 1; Moscow Times, July 17, 2007; New York Times, September 6, 2007, C4.

59. Financial Times, September 21, 2007, 10; Eurasia Daily Monitor, Jamestown Foundation 4, no. 189 (October 12, 2007).

60. Financial Times, September 20, 1997, 4.

61. Financial Times, November 22, 2006, 2.

62. China Daily, September 17, 2007, 6; Financial Times, September 21, 2007, 3.

63. Kremlin.ru, February 10, 2007; New York Times, February 11, 2007, 4.