Page 6 - FSUOGM Week 45

FSUOGM COMMENTARY FSUOGM

Novak steps down as Russian energy

minister after eight-year stint

RUSSIA RUSSIA’S long-serving energy minister, Alex- (COVID-19) wave.
ander Novak, is stepping down after eight years Representatives of OPEC+ members will
in the position, as part of the country's second meet formally on November 30 and December 1.
Cabinet reshuffle this year. “Novak will remain in charge of OPEC ties,
Prime Minister Mikhail Mishustin, who took while Shulginov is likely to oversee the power
charge of government only in January in Russia’s sector,” one source told Reuters.
previous Cabinet overhaul, has proposed that Shulginov has worked in the electricity indus-
Novak go on to serve as a deputy prime minister. try since 1975. In addition to his role of chairman
He will be replaced by Nikolai Shulginov, who and general director at RusHydro, he also serves
has chaired the board of Russian hydropower as a board member at national distribution grid
giant RusHydro since 2015. operator Rosseti.
Reports also suggest Novak will continue
A crucial role navigating the varying interests of Russian oil
Novak, 49, has served as energy minister since producers, including state oil giant Rosneft, led
May 2012, and has led Russia’s negotiations by powerful Putin ally Igor Sechin, and lead-
with other OPEC+ members on co-ordinated ing independent Lukoil, controlled by Vagit
output cuts since 2016. This has placed him in Alekperov.
a difficult position, having to fend off calls by “Shulginov doesn’t have an administrative
leading figures in Russia’s oil industry to exit tool (political influence and connections) to
the pact. strike a balance between Sechin and Alekperov,”
Among his other achievements Novak also the Reuters source said.
negotiated a deal with oil companies in 2018 to Rosneft has also engaged in frequent dis-
keep domestic fuel prices low after a series of putes over the years with Russian oil pipeline
spikes. His ministry has also locked horns with monopoly Transneft over transport tariffs, with
the Finance Ministry on several occasions over the Energy Ministry often having to serve as
oil industry tax breaks. an arbitrator. One of their most serious recent
In addition, Novak presided over the start rows has been over the so-called dirty oil crisis
of a major modernisation programme in Rus- last year, when millions of barrels of oil in the
sia’s electricity sector. The government began Druzhba pipeline system were contaminated
drawing up plans in 2018 to modernise some with chemicals.
39 GW of thermal power capacity – equivalent
to around a quarter of the country’s total – at a Broader reshuffle
cost of RUB1.9 trillion ($29.5bn). The tendering Novak’s departure from the energy ministry was
process for projects’ inclusion in the programme part of a broader Cabinet reshuffle. Also leaving
drew criticism, however, with most awards going their posts are Natural Resources Minister Dmi-
to larger state-owned players for what could be try Kobylkin, Transport Minister Yevgeny Diet-
described as running repairs rather than perfor- rich, Construction Minister Vladimir Yakushev
mance enhancements. and Minister for the Development of the Far East
Novak’s move to the prime minister’s office and the Arctic Alexander Kozlov.
would appear to be a demotion. There are cur- Kozlov will go on to lead the Natural
rently nine deputies serving under Mishustin, Resources Ministry, while the Transport Minis-
which would suggest he is unlikely to retain try will be headed by Vitaly Savelyev, currently
anywhere near as much influence as he had as the CEO of Russia’s state airline Aeroflot. Irek
energy minister. Fayzullin will run the Construction Ministry,
However, Novak has said he will work “in where he currently works as a deputy minister,
tandem” with his successor to oversee Russian while RusHydro board member Alexei Chek-
energy strategy until 2035. He will also remain unkov will be appointed Far Eastern and Arctic
Moscow’s main representative at OPEC+ talks, Development Minister.
sources told Reuters. This is a crucial time for The State Duma, Russia’s lower house of
OPEC+, as the cartel is currently debating parliament, is yet to approve the appoint-
whether to drop plans to ease supply cuts in ments. According to Russian news agencies, it is
January, in response to the second coronavirus expected to do so on November 10. ™

P6 www. NEWSBASE .com Week 45 11•November•2020