Igor Sechin -Excerpts: 'It's a God-Given Good That Should Be Used Effectively'...

Excerpts: 'It's a God-Given Good That Should Be Used Effectively'...

Russia's Deputy Prime Minister Igor Sechin gave his first major interview to a Western media outlet on Mar. 29.   see edited excerpts from the conversation between Mr. Sechin and The Wall Street Journal's Gregory White:

On Russia's oil dependence:

"I don't really understand when our Western partners, certain analysts and experts, talk about Russia's resource dependence. First of all, when did the Soviet economy start to become resource-oriented? In the 1970s. Why? We reacted to the situation in the world. In effect, this happened because Western countries, most of all the U.S., tried to break their link to OPEC."

"Now they tell us, 'you have Dutch disease, you're a resource economy.' But you yourselves asked us to be that way. We provided supplies for you. Now you're telling us, 'that was your mistake.' "

"In general, one should be calm about the presence of resources in Russia. For us, it's a God-given good that should be used effectively. There's nothing terrible in this. No one can tell that we should sit on these resources. Somebody is always wanting to take them away. It's good that we have resources, but we have a difficult climate, I remind you. Somebody else might have less resources but the sun shines and the bananas fall from the trees. They can just roll from side to side in the shade under the palms and wait for them to ripen. So there's no need to envy anyone."

"It was thanks to these resources, to Russian oil companies, that our foreign-currency reserves were accumulated, the safety cushion we talk about that allows us to provide state support (during the crisis)."

On the oil industry:

"If companies don't have access to stable financial resources for the long term, that of course could lead to a shortage and to a sharp increase in prices for oil and oil products. That might not alarm consumers very much now, since demand is falling, but when the recovery begins, and I hope we'll see that, this situation could develop.

You can write about my dream. I think that oil should be refined. Of course we can't do it all at once, but in 10, 15, 20 years, I would really like for Russian crude to be refined on Russian refining assets or those with Russian ownership…. If we're talking about Russian hydrocarbons, the maximum effectiveness will be attained when they're refined on our assets. "

On relations with OPEC:

"We propose closer coordination of our actions with OPEC. But there's a difference between the work of Russia's oil industry and that of OPEC members. It's well known that OPEC members generally have national oil companies…Our entire oil industry is privatized, these are private companies. Even if we talk about (state-controlled oil company) Rosneft, it's an international company whose shares are traded in London….We can't directly regulate these companies."

"(OPEC) says you should join right away….But we think we need to follow the path of coordinating our work….it would be irresponsible for Russia to decide to join OPEC because we can't directly regulate the activity of our companies."

"We're working on the possibility of pumping (crude) into reserves. That would help reduce some of the volume (on the world market). "

On prospects for nationalization of troubled companies:

"We've even become used to working in the situation of crisis, since we've been under pressure for half a year. And if you look at what's happened, nationalization isn't taking place. There is no goal of nationalizing. I remind you that in Western countries, this process is underway and it's much harsher. But not here. We're giving support to companies, but not demanding the obligatory sale of shares or state equity stakes. I don't exclude it, in exceptional cases, when shareholders ask or it would have influence on systemically important companies. But that's theoretical. The possibility is there, but it's not set as a task. I'd put the task the opposite way, it's the responsibility of the shareholders. Let them do something more (to save the company)."

(Referring to proposals from metals tycoons to convert their debts to state banks into equity): "They talked about converting debts into shares for the state, but you should understand and tell them that the state also needs to be effective. If they want to write off some debts, they should explain why that should be interesting for us. So far, no one has explained that to us. 'Take the debts and don't bother us;' No, they should try themselves. We don't need that."

"The foreign (creditors) also come to us and say, 'give us comfort letters or take some of the obligations on yourselves.' We ask them, 'Guys, three years ago, when you made these loans, you didn't come to us, you didn't ask.' 'No, we didn't,' (they say). 'So why are you now asking' and they say, 'Well…' "

"Why are state ownership and private ownership constantly set against each other? That's not the issue. Property is property. "

"The element that can be decisive is the effectiveness of management. … Whether an asset belongs to the state or a private company, it should be managed effectively. There's no big difference. A hired manager in Lukoil or TNK-BP is a hired manager and he could just as well work in Rosneft. "

On liberals and hardliners in the Kremlin:

"I think one should be relaxed about these labels. Life is much richer….One should be objective and judge based on effectiveness. If there are questions about effectiveness, I'm ready to answer. I'm trying. Let the senior comrades make the assessment. I have my management and it regularly corrects me."

"It's already unclear who's a liberal and who's a 'silovik' (hardliner). That's true…I haven't changed my approaches. "

On relations with the rest of the world:

"We work with everyone. We ask that our interests be treated with respect. That's all. There's no alternative, they must be respected."

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