Financial Times: Russia’s energy minister pushed latest plan for oil market merger but couldn’t win Putin’s support, despite family connection

Meduza.io

The Financial Times reported on Wednesday that an initiative to merge Russia’s biggest oil producers is part of Energy Minister Sergey Tsivilev’s “revenue-source power struggle.” Though Tsivilev is married to Vladimir Putin’s first cousin once removed (Deputy Defense Minister Anna Tsivileva), the president has not endorsed the merger, which Russian oil company executives oppose.

Bank and brokerage analysts who spoke to the FT questioned the economic rationale of creating a national oil champion, which would require nationalizing Lukoil and tightening control over state-run Rosneft and Gazprom Neft. Additionally, a merger would make it harder to evade Western sanctions and present Russia’s foreign adversaries with an “easy target.”

Last week, The Wall Street Journal revealed that Russian officials were exploring plans to merge the country’s three biggest oil producers. Since that report, spokespeople for Rosneft dismissed the idea of a merger, saying it lacked “any reasonable business logic,” and denounced Western journalists for peddling supposed false rumors.

This isn’t the first time the Kremlin has considered a major restructuring of Russia’s energy industry. As The Bell recently reported, Vladimir Putin even “devised and approved” a plan in 2004 for Gazprom to absorb Rosneft, but Igor Sechin, who then oversaw energy issues as a member of Putin’s presidential staff, reportedly derailed the merger. Rumors of possible mergers have surfaced on the oil market several times since then, but industry experts told The Bell that such gossip generally elicits analysts’ skepticism.