“The Wall Street Journal” learned that the Kremlin is discussing a scenario in which the state-backed giant Rosneft Oil would absorb another state producer Gazprom Neft – a subsidiary of the natural gas exporter Gazprom – and the independent Lukoil. Each of these entities is subject to sanctions. This way Russia would like to create a state-owned oil giant that would be fully controlled by the state.
Russia wants to create an oil giant. It will take over the market immediately
Talks have already taken place between management and government officials over the past few months, The Wall Street Journal reports. However, representatives of Russian companies denied that such a takeover was to be considered. However, if it did happen, new the company would instantly be the world's second-largest oil producer, after Saudi Aramco, and would pump almost three times as much oil as Exxon Mobil, the largest U.S. producer.
In this way, Russia could force, among other things, on China and India higher prices. This is especially important in the context of decreasing interest in crude oil, which is being replaced by renewable energy sources. The oil and gas sector is contributing less and less to the Russian budget. “Republic” calculates that revenues in October 2024 amounted to PLN 1.212 trillion rubles (PLN 50 billion), while in October 2023 this amount was higher and amounted to 1.635 trillion rubles (approx. PLN 68 billion). However, these data are impossible to verify.
Russia has big plans, but are they realistic? There are doubts
However, there are a few problems with this “cunning” plan. First – money. Funds are needed to pay Lukoil shareholders an equivalent for their shares in the company. Secondly, the appointment of a new president of the concern. The current directors would be reluctant to resign from their positions, and the president of such a large champion would have to be subordinated to Vladimir Putin. The power that would come into the hands of the president of the new company would be too great to fall to someone who was not committed to the president of Russia.
“The Wall Street Journal” indicates that Igor Ivanovich Sechin would be the favorite to take up such a position. He is a Russian oligarch, CEO of the state-owned oil company Rosneft and (even more importantly) one of Vladimir Putin's most trusted and closest advisors and his friend. Another candidate is Aleksandr Dyukov, president of Gazprom Neft. If a giant were to emerge, there would probably be internal competition for the presidency.