Daily Archives: April 16, 2008

EDITORIAL: Puff, the Magic Cigarette

EDITORIAL

Puff, the Magic Cigarette

The Moscow Times reported on Monday that “State Duma deputies floated radical plans on Friday to cut tobacco use after ratifying a United Nations anti-smoking convention. Potential measures include dramatically increasing the cost of cigarettes and banning their sale in roadside kiosks. The comments come as the Duma finally passed a law on accepting the World Health Organization’s Framework Convention on Tobacco Control.” Russia would also have to ban cigarette advertising within five years.

So, at last, the Kremlin is proposing to do something that a clear majority of the men in the country don’t want done, namely make their cigarettes more expensive. For the first time, if it happens, Russian me would directly feel the consequences of life in an anti-democratic society. (It’s likely that Russian men are also opposed to the indirect consequence of this move, namely prolonging their lives past 60; Russia leads the world in suicides, and many Russians undoubtedly see puffing as a relatively pleasant way to escape the horror of their everyday lives).

Now to be sure, the mere fact that Russia has signed a treaty is no reason to think it will abide by it. Given that Russia is ruled over by a proud KGB spy (and trained liar), it wasn’t the least bit surprising to see Russia unilaterally repudiate the Conventional Forces in Europe treaty, and it wouldn’t be even remotely unusual if Russia simply ignored this treaty as well.

Moreover, even if the Kremlin did get serious, there’s no particular reason to believe it’s competent enough to actually make headway. Here of course Russians would benefit from their hideous level of corruption and laziness, making it quite difficult to cause any bureaucratic mechanism to effectively function. After all, Gorby tried to make Russians give up their beloved vodka when Russia was still formally totalitarian, with no measurable results.

The MT reports: “In recent years, the number of smokers in the country has skyrocketed. According to state statistics, 60 percent of men and 30 percent of women smoke regularly. Forty percent of people under 18 have used tobacco. Russia is the world’s third-largest producer of tobacco products and pumps out as many as 414 billion cigarettes each year. Unlike other leading producers, however, most of the Russian produce is consumed domestically.”

But, at least, Russians must now confront the prospect of feeling actual pain resulting from the dictatorship they have authorized and enabled. So quickly and easily they forgot the suffering they endured in Soviet times, so blithely and childishly the proclaimed that Russia would “never go back.”

Today, Russians, Dictator Putin comes for your cigarettes. Do you dare imagine what he will come for tomorrow?

Your theaters, perhaps. Below we report the horrifying story, also from the pages of the mighty Moscow Times, of a theater production on the Dubrovka hostage crisis being shut down after the first performance because the author dared to humanize the terrorists. Apparently, the Kremlin didn’t care for that, and gave the whole production the hook. What other bits of Russian entertainment will find themselves off limits?

The Iron Curtain is falling. The Fat Lady is about to sing.

Annals of Russian Electoral Fraud

The Moscow Times reports:

There are numerous curiosities to be found in the official returns of the March 2 presidential election. At a polling station in the Dagestani town of Kizilyurt, for example, more than 700 voters cast their ballots, but not a single one voted for President-elect Dmitry Medvedev, who captured more than 90 percent of the vote in the republic and more than 70 percent nationwide. While one could imagine a neighborhood where antipathy toward Medvedev runs aberrantly deep, one blogger has crunched official election results and found strikingly anomalous voter behavior across the country.

Analyzing official returns on the Central Elections Commitee web site, blogger Sergei Shpilkin has concluded that a disproportionate number of polling stations nationwide reported round numbers — that is, numbers ending in zero and five — both for voter turnout and for Medvedev’s percentage of the vote. The statistical anomalies offer mathematical evidence of election fraud in Medvedev’s victory, math-savvy bloggers, election analysts and economists said. “This is an unnatural distribution, and it points to blatant manipulation of numbers,” said Andrei Buzin, who heads the Interregional Association of Voters and has a doctoral degree in math and physics.

In most elections, one would expect turnout and returns to follow a normal, or Gaussian, distribution — meaning that a chart of the number of polling stations reporting a certain turnout or percentage of votes for a candidate would be shaped like a bell curve, with the top of the bell representing the average, median, and most popular value. But according to Shpilkin’s analysis, which he published on his LiveJournal blog, podmoskovnik.livejournal.com, the distribution both for turnout and Medvedev’s percentage looks normal only until it hits 60 percent.

After that, it looks like sharks’ teeth. The spikes on multiples of five indicate a much greater number of polling stations reporting a specific turnout than a normal distribution would predict. A suspicious voter might say polling officials stuffed ballot boxes to achieve a nice, clean percentages like 65, 70, 75, 80 and so on. The analysis and results mirror Shpilkin’s study of the Dec. 2 State Duma elections, in which he found a similar predominance of round numbers both for voter turnout and for the percentage of the vote captured by pro-Kremlin party United Russia. Local election officials were clearly thinking in round numbers while rigging turnout and Medvedev’s percent of the vote, said economist Mikhail Delyagin, head of the Institute of Globalization Problems.

While the spikes on round numbers certainly reveal manipulations, they also demonstrate “an administrative demand” for a specific turnout to be reported to superiors, Shpilkin said in e-mailed comments. Furthermore, according to Shpilkin’s analysis, the higher the turnout, the higher Medvedev’s percentage of the returns — a correlation not seen in the returns of the other three candidates: Liberal Democratic Party leader Vladimir Zhirinovsky; Communist Party leader Gennady Zyuganov; and Andrei Bogdanov, who heads the tiny Democratic Party of Russia. Buzin said this correlation clearly indicated ballot stuffing on a massive scale, though Shpilkin and Delyagin said it was feasible that where turnout was higher — whether due to voter enthusiasm, coercion or herd mentality — voters may have been more inclined to vote for Medvedev.

A written request to the Central Elections Commission for comment on the anomalies was not answered in time for publication. In February the commission would not comment on similar anomalies in the Duma elections. Arkady Lyubarev, a researcher with Independent Institute of Elections, said he had tried on numerous occasions to discuss statistical anomalies in election results with commission officials but was repeatedly snubbed. “They are not mathematicians, they are legal experts,” Lyubarev said. “And from a legal perspective, you cannot use these anomalies to officially challenge the results of an election.”

Given the similar anomalies in both the Duma and presidential elections, officials have either not learned how to manipulate returns to make them more plausible, do not care about public opinion, or both, said Sergei Shulgin, an analyst with the Institute of Open Economics who studies elections. “The repetition of the anomalous spikes after they were reported in the media and widely discussed in the Russian blogosphere [after the Duma elections] confirms that there is no feedback between election officials and the public,” Shulgin said. Shulgin, who has crunched numbers for national elections dating back to the mid-1990s, said statistical distribution for voter turnout in Russian elections was becoming increasingly aberrant.

With each national election, the downward slope for turnout in what should be a bell curve rises higher and higher, Shulgin said. In Medvedev’s victory, it became more or less a straight line peppered with spikes on round numbers. This trend, Shulgin said, indicates that in areas where turnout is traditionally strong — such as rural areas and ethnic republics — more and more voters are showing up at polling stations with each new election. This does not necessarily indicate ballot stuffing, Shulgin said. Intense efforts by officials to lure or coerce voters to polling stations could be an important factor as well, he said. “In this presidential election, it looks like there was an order to get every voter out, and it worked,” Shulgin said. Meanwhile, what happened at Polling Station No. 682 in the Dagestani town of Kizilyurt remains unclear.

According to the Central Elections Commission web site, of the 766 ballots cast at the polling station, not one went to Medvedev. What’s more, Bogdanov received 95 percent of the votes. The numbers stand in stark contrast to those for all of Dagestan, where Bogdanov got 0.15 percent of the vote and Medvedev 91.92 percent. Nationwide, Bogdanov received 1.3 percent compared with 70.28 percent for Medvedev. Buzin suggested that Dagestani election officials may have accidentally swapped Medvedev’s and Bogdanov’s figures as they filed their reports. A spokesman for Dagestan’s elections commission was incredulous when told of the results at the Kizilyurt polling station, despite the fact they are posted on the Central Elections Commission’s web site. “It is a provocation,” he said without elaborating.

Annals of the Neo-Soviet "Art"

The Moscow Times reports:

A British-based playwright has accused Russian authorities of Soviet-style censorship after her play, about a real-life hostage siege in Moscow, was canceled on its opening night. The play was based on events at Moscow’s Dubrovka theater six years ago, when Chechen terrorists stormed in as more than 700 people watched a musical. About 120 theater-goers died in a rescue operation that victims’ relatives say was botched. Playwright Natalia Pelevine said that moments after the curtain came down on the play’s first performance in Russia, in Dagestan, local officials told the director the play’s first night would be its last. Dagestan’s President, Mukhu Aliyev, was in the audience for the performance. He denied that he had ordered its cancellation or that his administration practised censorship.

“The banning of this play is either a provocation by someone or an ill-conceived decision by the republic [of Dagestan’s] minister of culture,” he said in comments on his web site. But he added: “I did not like the production as a whole because, in my view, it romanticizes the image of the terrorists. It made them look heroic.” He hinted Russia’s enemies could be using the play to destabilize the region, an allegation Pelevine described as “absolutely mind-boggling, laughable.” The theater siege was one of the bloodiest attacks by Chechen rebels in a separatist war that lasted over a decade. The attackers stormed the theater during a packed performance with bombs strapped to their bodies.

After a standoff that lasted three days, special forces pumped a gas into the auditorium that rendered most people inside unconscious. They shot the terrorists. Relatives of the theater-goers who died say many were killed by the gas, having suffocated or choked on their vomit while unconscious because they were not given proper medical care. Authorities praised the operation as a success, but a police general has since said medical help was slow in reaching many of the victims. The country’s cultural establishment has shied away from the sensitive subject matter. Pelevine said several theaters she approached turned it down before she received an invitation from a theater company in Dagestan to stage it there. She said her aim was not to romanticize the terrorists, but to explore what compels people to commit violence.

A central character in her play, which is called “In your hands,” is a young Chechen woman who was one of the hostage-takers. She describes how she had wanted a normal life. “All of that fell apart when the war [in Chechnya] happened, and her loved ones were being killed, and her desperation led her to become this monster,” said Pelevine. “This is not trying to find an excuse for her on my part. By no means. This is just trying to have a dialogue about what it is that we are doing, politically, what our government is doing, what we are doing as a people,” she said.

Other Russia reports:

Pskov, April 13th: The opening of an art exhibit titled “Prison, Madness, Equality and Justice” has been cancelled by local police and authorities in Western Russian city of Pskov. As the Sobkor@ru news agency reports, the show’s organizers believe that the reasons given by officials –alleged safety issues—may in fact be manufactured.

“At the present moment, people wishing to attend the exhibit are gathered by the entrance, however they are facing an shut door,” said Natalya Chernova, the artist behind the opening. Before the exhibit began, building personnel told Chernova that the show must be stopped for technical reasons: Simultaneously, the electricity had been cut, the roof had leaked and the sewage pipes had burst. According to Chernova, the building super then began taking down her artwork.

Meanwhile, a van-load of OMON riot police arrived at the scene. Law enforcement officers, led by the militsiya, arrested two people waiting to the show to begin. “They came earlier, and were smoking and standing by the entrance,” Chernova said. The militsiya also took down the names and identifying information of the artist as well as the exhibit’s organizers.

Natalya Chernova created the exhibit’s artwork and poetry while locked away in pre-trial detention over a 2004 stunt organized by the banned National Bolshevik Party. During the Moscow protest, around 40 National Bolshevik activists stormed the presidential information administration building, and denounced reforms to regional elections legislation and state welfare benefits enacted by President Vladimir Putin. Chernova was ultimately sentenced to three years behind bars for her role in the event.

Merkel Challenges Putin on his ECHR Obstruction

25% of all suits pending before the European Court for Human Rights come from Russia. The Financial Times reports that Russia is now seeking to block reforms to help the court adjudicate such claims more quickly, and Germany’s leader is challenging Putin to stop his barbaric obstruction:

Angela Merkel, Germany’s chancellor, urged the Russian parliament on Tuesday to show its commitment to human rights by allowing important reforms to go ahead at the European Court of Human Rights, an organ burdened with a backlog of tens of thousands of cases.

”The court needs to be properly reformed, as that is what the whole human rights protection system in Europe hinges on,” Ms Merkel said in a speech to the Council of Europe, the 47-nation organisation that promotes democracy, human rights and the rule of law around Europe.

Governments and parliaments in all 47 countries have approved the reforms to the Strasbourg-based court, which would help it act more swiftly and efficiently, with the sole exception of the Russian legislature. Some Russian politicians have taken exception to what they see as court intrusions into internal Russian affairs.

”I want to state in no uncertain terms that we must not hold up the reforms to the court, because any country that does so is calling into question our common values,” Ms Merkel said, in a reference to Russia.

She said she had raised the matter with Vladimir Putin, Russia’s outgoing president, as well as the speaker of the Russian parliament, but so far to no avail.

With Dmitry Medvedev due to take over as president and a new Duma [legislature] elected last December, Ms Merkel said she hoped it would be possible for Russia to grant final approval to the reforms. ”After all, this would be in everyone’s interest,” she said.

The Christian Democrat chancellor’s direct appeal to Russia underlined the manner in which Ms Merkel has often taken a more forceful approach to human rights issues than Gerhard Schröder, her Social Democrat predecessor.

Social Democrats in her coalition government criticised her for receiving the Dalai Lama last September, a step that triggered a frosty spell in German-Chinese relations. But last month Ms Merkel called for dialogue between Tibet’s exiled spiritual leader and the Chinese authorities in order to overcome recent unrest in Tibet.

Ms Merkel’s speech to the Council of Europe highlighted the increasing burdens on the European Court of Human Rights, which was founded in 1959 and guarantees individuals all over Europe the right to seek legal protection of freedoms that their governments have signed up to uphold.

The court had almost 80,000 cases pending at the end of last year, compared with 66,500 at the end of 2006 and only a few thousand 10 years ago.

In spite of being granted extra resources in recent years, the court only manages to hand down about 1,500 judgements a year. As a result, it would take the court about 46 years to clear the current backlog, even in the unlikely event that it declined to take on new cases.

One of the reasons for the huge rise in pending cases is that applying for human rights issues to be take up by the court has become increasingly popular in Russia. About 20,000 of the court’s outstanding cases, or almost one-quarter of the total, come from Russia.

Putin: Dictator for Life

First Vladimir Putin remains prime minister after “leaving” the presidency. Then he manipulates the election to foist a hand-picked successor upon the nation. Then he grabs a host of new powers for the prime ministry, including directly control of regional leaders. And finally, for the coup de grace, he takes over the party of power as well. The Christian Science Monitor reports:

Vladimir Putin put the finishing touches to his postretirement formula for retaining power in Russia Tuesday by scooping up the leadership of the country’s dominant political party, a position he will hold in addition to being prime minister.

“I accept the invitation of the party. I am ready to take on myself the additional responsibility and head the party,” Mr. Putin told delegates to the convention of the pro-Kremlin United Russia (UR) party, which controls 70 percent of the parliament’s 450 seats. The 600 delegates, including many of Russia’s top politicians, responded with a lengthy standing ovation.

Russian observers are deeply divided over the consequences of Putin’s move, which will effectively leave Russia with two strong leaders after President-elect Dmitri Medvedev is inaugurated on May 7. Russia’s historical experience with divided power has been an unhappy one, but many experts believe the close personal ties and complementary skills of Putin and Mr. Medvedev may produce a stable political synergy that will enable much-needed economic reforms and anticorruption measures.

Others warn, however, that any future strife between the two men, who represent very different generations and backgrounds, could split Russia’s fractious bureaucracy and paralyze the work of government.

“This strengthens Putin’s political weight as national leader,” Sergei Markov, a United Russia Duma deputy, told journalists. “Dmitry Medvedev is leader of the state and of the Russian Federation, but the political leader of the country remains Putin.”

‘A new and dangerous situation’

Within a month, Putin will move from the Kremlin to Russia’s White House, the gleaming eggshell-like building by the Moscow River that serves as the seat of government, to take up the job of prime minister. Under the country’s Constitution, the prime minister is a presidential appointee, and the job has typically been filled by an unambitious technocrat. Although Putin’s long-term aspirations remain an enigma, experts say he is not likely to settle easily into the role of second fiddle to the new Kremlin chief.

“This is a completely new and very dangerous situation for Russia,” says Alexander Dugin, head of the nationalist Eurasia Movement. “We have two strong politicians, but all of the legitimacy lies with Putin. He has real charisma, huge popular support, his record of substantial achievements as president, and now the leadership of the main political party in the country. He will not be just another prime minister.”

The new president, Medvedev, has no power base of his own and is entirely beholden to Putin’s sponsorship for his ascent to the Kremlin. Yet Russia’s president enjoys supreme powers under the Constitution, written by former President Boris Yeltsin after he crushed a defiant parliament with military force in 1993. Under Putin’s eight-year leadership, the Kremlin greatly strengthened presidential powers by eliminating independently elected regional governors, subordinating the media, sidelining civil society groups, and ushering in a pro-Kremlin parliamentary majority.

“Everything Putin did while in power would seem to exclude the possibility of two power centers emerging now,” says Yury Korgunyuk, an expert with the InDem Foundation, an independent Moscow think tank. “Putin is trying to cling to power by all possible means, but [under Russia’s Constitution] everything will depend on the president’s goodwill. Medvedev can easily fire the prime minister.”

Medvedev and Putin have both publicly protested that problems will never arise between them. “[Putin] is an effective leader and he’s ready and able to continue to work to advance the development of our country, to make sure our development continues in the way set out eight years ago,” Medvedev said in an interview with the Financial Times last month. “I am confident that our tandem will prove to be absolutely effective.”

But Putin’s acquisition of United Russia’s leadership, unexpected by many, may change that outlook. Putin was offered the party’s chairmanship, a special post created by the convention on Monday that does not require him to actually join the party. At the convention, Putin was preceded to the rostrum by Medvedev, attending as a guest, who told the delegates it was a “logical” idea for Putin to take over the party’s reins. That made Putin’s acceptance look almost like an act of obedience to Medvedev’s will.

“I am sure today’s convention was played out according to a carefully written and rehearsed script,” says Masha Lipman, an expert with the Carnegie Center in Moscow. “The main intent was to ensure that no tensions between Putin and Medvedev would be on display.”

Though Putin is still not a member, the job now ties him formally to a party he was instrumental in creating, and whose candidate list he headed in last December’s parliamentary elections.

“Putin is now the hostage of United Russia, which will try to work through him to create a party-dominated government in a country where the president is supposed to form the cabinet,” says Alexei Mukhin, head of the independent Center for Political Information in Moscow. “United Russia was created to support Putin when he ran the Kremlin and it seems he will continue running the party as prime minister. But if Medvedev and Putin disagree, does that mean UR will become an opposition party? I foresee [bureaucratic] war.”

‘A window of opportunity’

Other experts point to the smooth stage management of politics under Putin to suggest the two men may continue to cooperate successfully.

“There is a window of opportunity here, now that Russia has two strong and popular leaders, to pursue major reforms,” such as slashing the bureaucracy and curbing corruption, says Yaroslav Lissovolik, chief economist of Deutsche Bank in Russia. “They both have a great deal of experience and a lot of accumulated political capital. Now is the time to spend it.”

The Turkish Daily News continues the story:

The new head of ideology of Russia’s ruling party Ivan Demidov wants to spread the ideas of Alexander Dugin, Moscow’s notorious apologist of fascism.

In late February 2008, United Russia, Vladimir Putin’s party dominating the Russian parliament, appointed Ivan Ivanovich Demidov (b. 1963) as head of the Directorate for Ideological Work of the Political Department of its Central Executive Committee. Before this promotion, Demidov, a well-known TV host, had been already working for United Russia on a less formal basis as an advisor to the party, and as chairman of the “Young Guard,” a youth group linked to United Russia. He was also the director of the party’s patriotic propaganda Web site “The Russian Project.”

In view of Russia’s recent shift to nationalism, the rise of Demidov – only one of contemporary Russia’s many anti-Western agitators – within Putin’s “vertical of power” would itself call little attention. However, Demidov has, in the past, professed to have been, in his intellectual biography, crucially influenced by the Russian mysticist Alexander Gelyevich Dugin (b. 1962), leader of the so-called International Eurasian Movement.

Dugin and the Nazis

Dugin is a prolific Russian publicist who has caused attention in the West by the virulence of his fanatic anti-Westernism, above all anti-Americanism. There is a lot of paranoia and conspirology flying around today in Moscow, where it has become commonplace to think that the United States is, in one way or another, responsible for most, if not all, of Russia’s (or even the world’s) recent misfortunes.

Dugin is distinct even within this context in that he once claimed that the KGB had been an agency of “Atlanticism” – i.e. of the U.S. government – and in his open praise for certain aspects and figures of the Nazi movement. He presents himself as the chief ideologist of the pan-continental Euro-Asiatic movement of “Eurasianism,” and heir to a mysterious “Eurasian Order” that existed, in secret, for centuries. In 1991-1992, Dugin wrote his programmatic article “The Great War of the Continents,” in which he claimed that the representatives of this order could be found in the Abwehr, the Third Reich’s counter-intelligence service, and especially in the Sicherheitsdienst, the security service of the SS. Dugin called its chief Reinhard Heydrich (1904-1942, an organizer of the Holocaust) a “convinced Eurasianist,” who, allegedly, fell victim to an intrigue by the “Atlanticists.”

In his 1992 article “Left Nationalism,” Dugin defended fascism as not having anything to do with extreme nationalism. It was, according to Dugin, “by no means the racist and chauvinist aspects of National Socialism that determined the nature of its ideology.” The “excesses of this ideology in Germany are a matter exclusively of the Germans,” explains Dugin, “while Russian fascism is a combination of natural national conservatism with a passionate desire for true changes.”

In spite of this and many other statements by Dugin condemning the Third Reich’s atrocities, in his 1992 article “Conservative Revolution,” Dugin called the “Waffen-SS and especially the scientific sector of this organization, Ahnenerbe, ‘an intellectual oasis in the framework of the National Socialist regime.’” He presented himself as a follower of the “Third Way” and called National Socialism “the fullest and most total realization” of the Third Way.

In his 1997 article “Fascism – Borderless and Red,” Dugin hailed the arrival in Russia of a “genuine, true, radically revolutionary and consistent, fascist fascism.” Further affirmative phrases can be found in Dugin’s numerous other writings on Russian and international fascism.

Following in the footsteps of Heydrich?

During the course of his political career, Dugin has been linked to numerous prominent politicians, including former speaker of the State Duma Gennady Seleznev, and current culture minister of Russia Aleksandr Sokolov. One suspects that busy politicians such as these may have entered an alliance with Dugin as they took seriously the “neo-Eurasianist’s” claim to be an advocate of understanding among the peoples of the Euro-Asiatic continent (on the basis of a common anti-Americanism), and as they may not have bothered to engage with Dugin’s numerous books and articles.

Recently, Dugin has adapted his own rhetoric to mainstream Russian discourse and now often presents himself as a “radical centrist” or even ardent “anti-fascist.” One might add though that, as late as 2006, he praised in public the German ultra-nationalist brothers Otto and Gregor Strasser who had helped Hitler build up the NSDAP in the 1920s (before they left the Nazi party because of a personal conflict with the Führer, in the early 1930s). In March 2008, Dugin’s website Evrazia.org confirmed “Dugin’s sympathies for the Strasser [brothers].”

In contrast to high-ranking politicians with, perhaps, only superficial knowledge of Dugin’s ideas, Demidov has admitted to have been formed by them. In a November 2007 interview for Evrazia.org, Demidov stated, among other things, that “doubtlessly, a crucial factor, a certain breaking point, in my life, was the appearance of Alexander Dugin.” Demidov announced that “it is high time to start realizing the ideas, as formulated by Alexander Dugin, of the radical center through projects.” In the interview Demidov calls himself, with reference to Dugin, a “convinced Eurasianist” – oddly, the same phrase that Dugin had used 15 years earlier to describe Heydrich.

A big reason for pause

Demidov’s political rhetoric indicates that he is familiar with Dugin’s writing sufficiently to use his arguments and terminology. This does not yet mean that Demidov should be labeled “fascist.” The popular figure may, in spite of his seeming familiarity with “neo-Eurasian” literature, not be fully aware of Dugin’s multifarious links to fascism.

Yet, as Demidov has publicly declared that he will use his talents as a PR manager to spread Dugin’s ideas, the promotion of Demidov to head of ideology of Russia’s ruling party gives reason for pause. The de facto chief ideologist of a country that has doubtlessly suffered most from Nazism will be a man who has publicly admitted his devotion to one of Russia’s most brazen apologists of fascism.

Signs of the Russian Apocalypse: Oil Production Falls

So much for the idea that Russia is a reliable supplier of crude oil to world markets. So much for the idea that oil production can sustain the Russian economy. So much for the idea that Vladimir Putin is an economic genius. The BBC reports:

The future supply of Russian oil is threatened by a likely decline in production levels, one of the country’s top oil executives has warned. Lukoil’s Leonid Fedun said $1 trillion would have to be spent on developing new reserves if current output levels were to be maintained. Recent figures show Russian output fell 1% in the first quarter of 2008. The possibility of less oil from one of the world’s key suppliers will add more pressure to prices now at record highs.

Russian peak?

The surprise fall in Russian oil output in the first part of the year has raised fears about the ability of global supply to keep pace with demand over the next decade. Russian production averaged 10 million barrels a day in the first three months of 2008, according to the International Energy Agency, down 1% on the same period last year. Blamed on supply problems in western Siberia and weather conditions making it harder to move drilling equipment, the fall contrasts with substantial output rises in recent years. In an interview with the Wall Street Journal, Lukoil vice president Leonid Fedun cast doubt on whether output could continue to increase.

Once highly-productive fields in Siberia are slowly being exhausted and the huge cost of searching for oil in the untapped but remote region of eastern Siberia has deterred firms. “When the well’s productivity falls, you have to keep drilling more and more,” Mr Fedun said, referring to the steady depletion of older fields. “You have seen it in Alaska and the Gulf of Mexico and now you are seeing it in Siberia.”

Analysts at Citigroup recently said annual increases in Russian output could “no longer be taken for granted” but argued that production was expected to rise until 2012. One energy expert said the Russian industry was now acknowledging a crisis which had been evident to independent observers for several years. “We now see production peaked last year,” Mikhail Kroutikhin, editor in chief of the Russian Petroleum Investor told the BBC. “I believe the decline will continue for quite a number of years.”

Knock-on effects

The problems have been caused by high tax levels and a shortage of financial incentives to invest in exploration, he added. Russian worries underline longstanding concerns about whether there is enough oil to meet the needs of the global economy, particularly fast-growing China and India. They are also a particular cause of concern for several of Europe’s largest economies, such as Germany, which buy a large share of their oil from Russia. “Russia is not going to be a very reliable supplier of energy in a few years,” Mr Kroutikhin warned.