Putin Meets Yankee Oilmen

Here's Kommersant's account of their tete-a-tete at Washington, DC's Madison Hotel:

Ten minutes after the press conference ended, Putin was meeting with oilmen in the Madison Hotel. He announced that meeting while still at the press conference. “We will speak about projects for American participation in the Russian economy, mainly in the energy sphere,” he said.

It was already known that there was only one project, the development of Shtokmanovskoe deposit. ExxonMobil chairman of the board Lee Raymond, president of that company Rex Tillerson, ConocoPhillips president James Malva, Chevron chairman of the board David O'Reilly and LUKOIL head Vagit Alekperov were waiting for the Russian president at the Madison. Alekperov was sitting in the center of the group and center of the conversation. They probably weren't asking how to cozy up to Putin. (It is unclear that Alekperov know the answer to that question.) I overheard that they were asking about how Alekperov found the U.S. market. (LUKOIL has 1400 gas stations in the United States.)

Putin was included in the conversation.

“Welcome to the United States!” Malva greeted him.

It would have been more logical to wish him a safe trip home, since he was leaving the country in an hour and a half, after three days there.

Putin began by mentioning that the U.S. receives only an insignificant portion of Russia's energy resources. “According to various estimates, oil is just over 2 percent. That means that petroleum products are 0.3 percent, and there has just been the first delivery of natural gas. Our potential is huge.”

He went talking about that potential as they moved to another room and left the journalists behind. The conversation lasted ten minutes, and was completely unnecessary. More interesting was that Putin then spoke with each oil executive one-on-one.

Malva and Alekperov went in together to see him. There was ten minutes scheduled for each of three meetings. That first meeting went according to schedule.

Malva recounted, “I told the Russian president about our investment projects in Russia. He approved.”

Malva has learned the rules of the Russian market well. We can be sure that, with an approach like that, ConocoPhillips has a bright future in Russia.

I asked Alekperov if they talked about the Shtokmanovskoe deposit.

“We are not involved with that project,” he said with a shrug. That meant no, obviously.

Tillerson from ExxonMobil spoke with Putin for no less than half an hour. He looked gloomy and refused to comment afterwards, but he might always look like that.

Chevron head O'Reilly, on the other hand, was jubilant on his way out of the meeting. He told Putin, and subsequently everyone else, how much his company suffered from the hurricane, which was practically not at all.

The second topic of their discussion was, finally, the Shtokmanovskoe deposit. “Mr. Putin made it clear that he knows that the Chevron Co. has passed the second stage of the competition, and is one of the five companies still in the running for the development of the deposit,” O'Reilly said.

Then they talked about energy security at the Big 8 summit coming up in St. Petersburg.

“We spoke in general terms about the general topic,” O'Reilly said.

He tried to get away after that, but he was asked if he thought Chevron was closer to developing the Shtokmanovskoe deposit after his conversation with Putin.

“Gazprom should answer that question,” he said, caught short. “Their management will make the decision. I only told the president that we are glad to have been chosen at the second stage.”

The only American journalists there asked who asked for the meetings, the executives or Putin.

“I don't know,” he said heavily. “But the fact that Mr. Putin wanted to meet speaks of his interested in the development of Russia as a country that can become a supplier of both natural gas and oil.”

He made a halfhearted attempt to leave again and was asked about Shtokmanovskoe again.

“It seems to me that you… that is, people, don't understand,” he said, beginning to show his annoyance. “That question will be decided by Gazprom.”

If he really thinks so, he, unlike his colleague from ConocoPhillips, has little future on the Russian market. But he probably isn't as uninformed as that.

I heard from sources in the Russian delegation that the discussion of the Shtokmanovskoe deposit with both O'Reilly and Tillerson was limited to only a few phrases. Putin made believe that he was more interested in how American strategic oil reserves were doing after the hurricane. And they gave him detailed descriptions of the technical specifications that allowed them to weather the hurricane.

That is, Putin is satisfied just to meet those people so far. The intrigue is just beginning.