Putin leads BRIC (Brazil, Russia, China, India), takes control of oil assets in Russia, associates with Western Europe – what’s next!
Pam Bhandari, Special Correspondent
December 24, 2004

Year 2005 can be interesting for the world economies. While America is busy in Iraq, Vladimir Putin is positioned to take control of the world as another superpower. He has created this proud coalition of four - Brazil, Russia, India and China with large population bases, large natural resources and unending technical talents as well as large consumer bases.

With Russia’s official take over of Yukos, Russia has strategically positioned it self as another major superpower. Russian oil will determine the direction of world economies including that of United States. American budget and trade deficits need lower oil price and steady flow of oil from all over the world. With Al-Queda threatening the middle-easy oil, Russia becomes the savior for the world. Even if America decides to tap the Alaska wild refuge, it will not have any effect in 2005. 

With recent understandings with Germany and France, Putin has positioned Russia in a very strategic position. No matter what the outcome of Ukraine election is, Russia will be in the driver’s seat in 2005 and beyond. 

The way Putin took control of the Yukos oil company was very interesting. 

Russian President Vladimir Putin on Thursday defended the effective renationalisation of the core assets of Yukos oil group, arguing that the state had every right to make amends for the flawed privatisations of the early 1990s.

According to Arkady Ostrovsky of Financial Times in Moscow, Speaking at a three-hour press conference in the Kremlin, Mr Putin said: “You all know very well how privatisation took place here in the early 1990s and how, using various tricks, and sometimes violating the laws, many market participants got hold of state property worth many billions [of dollars].

“Today the state, using absolutely legal market mechanism, is securing its interest. I consider this to be quite normal.”

Mr Putin has previously insisted that Yukos was pursued because of its failure to pay its taxes. But Thurday's statement provided a new justification for the Yukos saga one that could equally apply to other companies created by the privatisations of the 1990s.

Late on Wednesday night Rosneft, the state oil company chaired by the deputy chief of Mr Putin's administration, took control of Yuganskneftegas, Yukos's main production asset accounting for 11 per cent of all Russian oil production. Yuganskneftegas had earlier been bought at auction by Baikal Finance Group, a mysterious bidder.

Rosneft, which paid $9.35bn for the oil producer, far less than its market value, is merging with Gazprom to create a giant national company. Mr Putin insisted the auction was in keeping with a Russian law, but many observers said the deal was as murky as the privatisation of the early 1990s.
The US on Thursday voiced dismay at the takeover. “We certainly don't think [the case] has been disposed of in a transparent or open way,” said a State Department spokesman.

A combative Mr Putin also ridiculed the decision of the Houston court that issued an injunction last week against the sale of any of Yukos's assets, after the company had filed for bankruptcy protection in the US.

Mr Putin said the ruling issued by a US judge, “who probably does not know where Russia is”, raised questions about the competence of the Texas court. He said the judgment was an example of the US's attempt to dominate the world and typified its double-standards towards Russia.
He also lashed out at criticism of Russia's role in Ukraine. “An intention to limit Russia's opportunities for developing relations with its neighbours . . . amounts to a wish to isolate the Russian Federation,” he said.

Mr Putin rejected US criticism of the state of democracy and the rule of law in Russia, accusing Washington of intimidating voters. “We are not exactly thrilled by what is happening in the US. Do you think that the electoral system in the US is without flaws? Need I remind you of how elections were held in the US?”

Signalling Russia's determination to be counted as an equal partner to the US, Mr Putin said: “With the United States, we are the biggest nuclear power in the world and have a special responsibility in terms of arms control and [the] non-proliferation of weapons of mass destruction”.