- The Washington Times - Tuesday, December 20, 2005

MOSCOW (AP) — Even the Kremlin can’t always win the job candidates it wants.

Former U.S. Commerce Secretary Donald L. Evans declined President Vladimir Putin’s offer to head a major state oil company a week after former German Chancellor Gerhard Schroeder accepted a job from Russia’s gas monopoly.

Analysts don’t expect that refusal to deter the Kremlin from headhunting foreign politicians and business leaders for the boardrooms of its thriving energy giants, which are increasingly looking to take on the world’s biggest players.

“We are about to move into a new phase when Russian state-controlled energy companies are opened for investment with cooperative foreign firms,” said Chris Weafer, chief strategist with Moscow’s Alfa Bank. “It makes sense to have someone with international experience — either corporate or political — leading that process at the head of those companies.”

Over the past 12 months the state has taken control of much of the nation’s oil industry, which it largely forfeited during the chaotic privatizations of the 1990s.

Rosneft — the oil company that Mr. Putin invited Mr. Evans to lead — was catapulted into the nation’s top five oil producers a year ago after it bought the biggest production unit of Yukos.

Yukos was stricken by enormous back-tax claims that critics say were part of a Kremlin campaign against its chief, Mikhail Khodorkovsky.

The state also gained control over gas monopoly Gazprom, which itself purchased the privately held Sibneft oil company this autumn.

Now, with control over about 30 percent of the nation’s oil output, the state feels confident enough to open up strategic projects and attract funds for its state companies via foreign stock listings and deals with strategic investors — where the influence of power brokers such as Mr. Schroeder and Mr. Evans could be invaluable, Mr. Weafer said.

Rosneft is planning an initial public offering on a Western exchange next year, while Gazprom is negotiating with foreign partners to develop its giant Shtokman field.

Mr. Evans, who served as commerce secretary during President Bush’s first term, turned down the Rosneft job Monday. He cited a host of business and family commitments. That led some to suggest that the real deterrent was the reputation of Rosneft, which is seen as a direct beneficiary of the back-taxes campaign against Yukos.

Were Mr. Evans to have accepted, he would have replaced Mr. Putin’s deputy chief of staff, Igor Sechin, in the boardroom. Mr. Sechin is widely seen as the architect of the tax probe against Yukos and Khodorkovsky.

“For an ex-top official in the U.S. to take a job with a state-owned Russian oil company, particularly with Rosneft’s recent history, would, I imagine, be very difficult,” said Roland Nash, head of research at the Renaissance Capital investment bank in Moscow.

“It would seem Putin is keen on using his past international acquaintances to improve the cosmetics of Russia’s state industries,” he said.

Mr. Schroeder, who has warm relations with Mr. Putin, has been subject to a barrage of criticism from German politicians since he accepted an offer to be chairman of the shareholders committee — a post roughly comparable to board chairman — of a Gazprom-controlled consortium that will manage a Russian-German gas pipeline.

The project was signed a few months before he left office.

Ironically, Mr. Khodorkovsky brought powerful Western officials into Russian oil companies. He hired leading Western managers at Yukos and former British Foreign Minister David Owen as chairman of the company’s international arm.

After the experience with Mr. Evans, Mr. Weafer suggested that the Kremlin might benefit from being less hands-on in its approaches.

“We have seen a little inexperience in the appointment,” Mr. Weafer said. “The lesson they will learn from this is to employ a headhunter firm to sound out potential candidates first.”

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