Date: 29 May 2018
Timchenko vs. Sechin. Conflict between Putin’s Friends
Russia’s private gas producer Novatek and state-owned oil giant Rosneft have recently been united by the struggle with Gazprom’s monopoly. However, it is only a tactical alliance, as evidenced by contradictory interests of Gennady Timchenko and Igor Sechin in the field of petrochemistry. Rosneft plans to increase chemical production, which threatens the dominating position of Sibur where the main role is played by Timchenko and his long-time business partner Leonid Mikhelson. The conflict in the chemical sector confirms the rising tension in the Russian elite connected with fewer and fewer opportunities that could be grasped thanks to their good relations with the Kremlin.
Gennady Timchenko is known as “Putin’s cashier”. Both men got to know each other at the beginning of the 90’s in St. Petersburg. Timchenko owns shares in many strategic businesses; moreover, he has been blacklisted by the Western sanctions. On May 24, he indirectly insulted Rosneft by saying that Sechin’s company could not compete with Sibur, a petrochemical giant controlled by Timchenko and Mikhelson (as the latter is his old, good partner from Novatek). 34.08 percent of Sibur’s shares are owned by a company possessed by Mikhelson while 17 percent is owned by Timchenko.
Sibur is Russia’s largest petrochemical company, a giant in the field of chemical production based on gas and oil. It gathers several dozens of concerns which jointly employ over 50 thousand people. It produces rubbers, plastics, mineral fertilisers and rubber products. Rosneft is one of the raw material suppliers for Sibur; nevertheless, it has the ambition to become an independent player in this sector. Earlier, it was said that Rosneft had planned to build two petrochemical plants in the Eastern Siberia and in the Volga Region with a joint annual production power of 4.8 million tonnes of polyolefins. Sechin announced that the company had sought to reach the level of 20 percent of its gas and oil processing that would be devoted to chemical products. Timchenko has claimed that these are only declarations that will not be realised. In order to avoid such a situation in the future, Timchenko has argued that a ministry of the oil-gas industry shall be created. The next day, on May 25, Rosneft replied that his assessments had been wrong and that he had had no knowledge about the real situation. Sechin’s company expressed hope that Timchenko’s words were not the stance of the whole Sibur, which is currently carrying out effective cooperation with Rosneft. The company suggested that Timchenko’s dismissive approach to Rosneft’s petrochemical plans indicated his real fear of the competition.
All texts (except images) published by the Warsaw Institute Foundation may be disseminated on condition that their origin is stated.