by Santanu Saikia Basically, we've been had by the Russians. That's it -- not so fairly as so squarely! And -- no prizes for guessing -- it's the Chinese flirtation (oh no, not again!) which seems to have enticed the Ruskis, opting for the svelte Chinis, in place of its stodgy, past-its-prime romance with dowager India. If reports in London's Financial Times are to be believed, Vladimir Putin has hinted -- at a press conference at Gottendorf, Germany on Tuesday -- that Chinese state oil company CNPC may have a role to play in the operations of the auctioned Yuko's subsidiary, Yuganskneftegaz. That's pretty chilling news for India, which had gone all rah-rah after petroleum minister Mani Shankar Aiyar returned from Moscow last month -- with Russian dreams and Indian schemes. Putin's statement in Germany assumes greater significance, specially if viewed in the context of discussions -- held this weekend, in Moscow --
between Gazprom CEO Alexei Miller and CNPC boss Chen Geng. Though it isn't clear what exactly transpired at this meeting, it would be interesting to watch out for the role CNPC -- or Gazprom for that matter-- plays in the sordid affairs of Yuganskneftegaz. This will be all the more fascinating, especially since the Russian subsidiary was bought for $9.35 billion at last Sunday's auction by an anonymous outfit going by the style of Baikal Finance Group (BFG). Little is known about BFG, but many suspect it of being a front company for the Russian state. It wouldn't be far-fetched to link Putin's statement and these recent developments but what's clear is that CNPC can ultimately ride piggyback on Gazprom -- which acts on behalf of Moscow -- to access the assets of Yugansknefregaz (consisting of 26 fields with proved reserves of 11.63 billion barrels). The true identity of the Baikal Finance Group is likely to be known only when it makes the cash-down payment for the Yukos subsidiary within the next 10 days. Even if it's all in the realm of speculation till then, India -- for all practical purposes -- seems to be pretty much out in the cold. It's all the more biting and bitter as the initial euphoria at a Russian breakthrough turned out to be far too short-lived for comfort. In retrospect, despite assertions to the contrary, the Russians didn't quite play ball with India on the sale of Yuganskneftegaz. According to reliable information available with this website, when petroleum minister Mani Shankar Aiyar met Russian energy minister V. Khristenko and Alexei Miller in Moscow on October 25 -- on a strategic alliance -- the duo as much as refused to even acknowledge that the troubled Yuko's subsidiary was up for sale -- despite the fact that it was splashed all over the media. To compound matters, the Russian representatives refused to comment on the issue when officials from ONGC broached the subject at the Indo-Russian Working Group meeting in New Delhi on November 16. The Russians, on the contrary, vacillated -- bordering on being disinterested -- when it came to putting together an MoU between ONGC and Gazprom for cooperation in the upstream sector.
An MoU between the two was finally hammered together but, for reasons best known to the Russians, both the Gazprom chief and ONGC chairman Subir Raha failed to sign the agreement during the official ceremony on December 3 -- when Putin was in Delhi. According to sources, while Putin appeared to be solicitous enough when Aiyar met him to discuss an alliance to bid for Yuganskneftegaz -- the Russian president reportedly welcomed the participation of Indian companies at the auction either directly or along with Russian companies -- the Gazprom boss was believed to have been less forthcoming. After a slippery Miller was finally pinned down at his Maurya Sheraton suite by ONGC officials, he admitted that Gazprom would like to go it alone when bidding for Yuganskneftegaz. ONGC did put forward a deal to Miller which suggested that it would not participate directly in the bidding process only on the condition that it would get a share of the spoils in the event of Gazprom succeeding in the bid. Miller, it is understood, fobbed off the issue then but promised to get back to the ONGC -- a promise he failed to keep. Subir Raha, with all his bags packed and ready to go, didn't eventually make that trip to Moscow.
Did Miller deliberately play truant in an attempt to shake-off ONGC from participating in the auction? Or did the change of heart happen later? For all practical purposes for India, waiting in vain meant that by the time the ONGC Videsh Ltd (OVL) board met on December 9, it was far too late to stick to the December 19 deadline for putting in a bid for Yuganskneftegaz. Just the paper work -- including RBI clearances for paying a qualifying $1.73 billion to bid and translating voluminous bid documents into Russian -- was too tedious and voluminous a task to be undertaken before the deadline. Then again, OVL didn't have a clue on what the valuation of Yuganskneftegaz was, and bidding blind when the reserve price was $8.65 billion would have been a distinctly bad idea. The only viable option left for India was to tie down Gazprom into a post-acquisition agreement but, clearly, the Russian major had other plans in mind. By all accounts, it's quite apparent that, behind the scenes, the Chinese were attentively active. With military precision, they walked into the show just in time to grab the front seats. While Subir Raha waited for an invitation to Moscow, CNPC chief Chen Geng was busy being feted in Moscow.
Sure, the wheels within wheels that exist in Moscow would outdo our very own desi payyahs, and revelations of what actually transpired to change the hawa will only be known when the details of the deal come out in the open. However, what is patently clear and unambiguous is that, once again, we seem to have been outsmarted by the Chinese. Russia -- the one country we were confident of -- turned out to be a playground for the Chinese in which we have been clearly outwitted. The dragon has raised its head and roared once again. We've been taken for a solid ride, as it were and, perhaps, we need to change our strategies before we actually start enjoying the roller-coaster!
between Gazprom CEO Alexei Miller and CNPC boss Chen Geng. Though it isn't clear what exactly transpired at this meeting, it would be interesting to watch out for the role CNPC -- or Gazprom for that matter-- plays in the sordid affairs of Yuganskneftegaz. This will be all the more fascinating, especially since the Russian subsidiary was bought for $9.35 billion at last Sunday's auction by an anonymous outfit going by the style of Baikal Finance Group (BFG). Little is known about BFG, but many suspect it of being a front company for the Russian state. It wouldn't be far-fetched to link Putin's statement and these recent developments but what's clear is that CNPC can ultimately ride piggyback on Gazprom -- which acts on behalf of Moscow -- to access the assets of Yugansknefregaz (consisting of 26 fields with proved reserves of 11.63 billion barrels). The true identity of the Baikal Finance Group is likely to be known only when it makes the cash-down payment for the Yukos subsidiary within the next 10 days. Even if it's all in the realm of speculation till then, India -- for all practical purposes -- seems to be pretty much out in the cold. It's all the more biting and bitter as the initial euphoria at a Russian breakthrough turned out to be far too short-lived for comfort. In retrospect, despite assertions to the contrary, the Russians didn't quite play ball with India on the sale of Yuganskneftegaz. According to reliable information available with this website, when petroleum minister Mani Shankar Aiyar met Russian energy minister V. Khristenko and Alexei Miller in Moscow on October 25 -- on a strategic alliance -- the duo as much as refused to even acknowledge that the troubled Yuko's subsidiary was up for sale -- despite the fact that it was splashed all over the media. To compound matters, the Russian representatives refused to comment on the issue when officials from ONGC broached the subject at the Indo-Russian Working Group meeting in New Delhi on November 16. The Russians, on the contrary, vacillated -- bordering on being disinterested -- when it came to putting together an MoU between ONGC and Gazprom for cooperation in the upstream sector.
An MoU between the two was finally hammered together but, for reasons best known to the Russians, both the Gazprom chief and ONGC chairman Subir Raha failed to sign the agreement during the official ceremony on December 3 -- when Putin was in Delhi. According to sources, while Putin appeared to be solicitous enough when Aiyar met him to discuss an alliance to bid for Yuganskneftegaz -- the Russian president reportedly welcomed the participation of Indian companies at the auction either directly or along with Russian companies -- the Gazprom boss was believed to have been less forthcoming. After a slippery Miller was finally pinned down at his Maurya Sheraton suite by ONGC officials, he admitted that Gazprom would like to go it alone when bidding for Yuganskneftegaz. ONGC did put forward a deal to Miller which suggested that it would not participate directly in the bidding process only on the condition that it would get a share of the spoils in the event of Gazprom succeeding in the bid. Miller, it is understood, fobbed off the issue then but promised to get back to the ONGC -- a promise he failed to keep. Subir Raha, with all his bags packed and ready to go, didn't eventually make that trip to Moscow.
Did Miller deliberately play truant in an attempt to shake-off ONGC from participating in the auction? Or did the change of heart happen later? For all practical purposes for India, waiting in vain meant that by the time the ONGC Videsh Ltd (OVL) board met on December 9, it was far too late to stick to the December 19 deadline for putting in a bid for Yuganskneftegaz. Just the paper work -- including RBI clearances for paying a qualifying $1.73 billion to bid and translating voluminous bid documents into Russian -- was too tedious and voluminous a task to be undertaken before the deadline. Then again, OVL didn't have a clue on what the valuation of Yuganskneftegaz was, and bidding blind when the reserve price was $8.65 billion would have been a distinctly bad idea. The only viable option left for India was to tie down Gazprom into a post-acquisition agreement but, clearly, the Russian major had other plans in mind. By all accounts, it's quite apparent that, behind the scenes, the Chinese were attentively active. With military precision, they walked into the show just in time to grab the front seats. While Subir Raha waited for an invitation to Moscow, CNPC chief Chen Geng was busy being feted in Moscow.
Sure, the wheels within wheels that exist in Moscow would outdo our very own desi payyahs, and revelations of what actually transpired to change the hawa will only be known when the details of the deal come out in the open. However, what is patently clear and unambiguous is that, once again, we seem to have been outsmarted by the Chinese. Russia -- the one country we were confident of -- turned out to be a playground for the Chinese in which we have been clearly outwitted. The dragon has raised its head and roared once again. We've been taken for a solid ride, as it were and, perhaps, we need to change our strategies before we actually start enjoying the roller-coaster!
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