The Russian State and Russian Energy Companies in the Post-Soviet Region, 1992–2012

Mutually supportive? The Russian State and Russian Energy Companies in the Post-Soviet Region, 1992–2012 By Ingerid Maria Opdahl A thesis submitted to The University of Birmingham For the degree of DOCTOR OF PHILOSOPHY Centre for Russian, European and Eurasian Studies Department of Political Science and International Studies School of Government and Society College of Social Sciences University of Birmingham May 2015 University of Birmingham Research Archive e-theses repository This unpublished thesis/dissertation is copyright of the author and/or third parties. The intellectual property rights of the author or third parties in respect of this work are as defined by The Copyright Designs and Patents Act 1988 or as modified by any successor legislation. Any use made of information contained in this thesis/dissertation must be in accordance with that legislation and must be properly acknowledged. Further distribution or reproduction in any format is prohibited without the permission of the copyright holder. Abstract This thesis investigates relations between five Russian energy companies – RAO UES/Inter RAO (electricity), Minatom/Rosatom (nuclear energy), Lukoil (oil), Transneft (oil pipelines) and Gazprom (gas) – and the Russian state from 1992 to 2012, with particular regard to state–company interaction over Russian foreign policy and companies’ activities in the post-Soviet region. The argument is that, due to the institutional legacies of the Soviet system, state–company interaction over foreign policy and energy operations abroad was part of their interaction over the Russian state’s institutional development. The study is based on the conceptual framework of social orders developed by North, Wallis and Weingast (NWW). State–company relations are seen to vary according to their informality and formality, and how closely the companies, and their rent streams, are tied to the state and the ruling coalition, or regime. The thesis concludes that the institutions that structure companies’ relations with the Russian state at home make them more or less available as foreign policy tools. In particular, domestic state–company relations influence the companies’ role in maintaining post-Soviet energy dependence on Russia. The thesis highlights the energy companies’ importance for state infrastructural power, and for the durability of Russia’s authoritarian regime. Acknowledgements My heartfelt thanks go first, and above all, to my first supervisor at the Centre for Russian, European and Eurasian Studies at the University of Birmingham, Julian Cooper. Patiently and with enthusiasm, Julian supervised the research and most of the writing of this thesis, for which I am really grateful. When Julian retired from his formal university duties, I was again fortunate that Richard Connolly joined the supervision team, first as co-supervisor and then lead supervisor. Richard brought his own enthusiasm, support and analytical perspectives to the project’s final two years. Thank you both for having me as respectively the final and the first PhD student! Even after returning to Norway, I have benefited from the vibrant academic environment of CREES. My sincere thanks go to everyone at CREES and the wider community of CREESniki. In Birmingham and beyond, special thanks to Aglaya Snetkov, Stephen Aris, Jelena Obradovic-Wochnik, Alexandra Prodromidou, Tatiana Gladkikh, Nino Kemoklidze, Victoria Hudson, Karolina Medwecka-Piasecka, Rene and Vanessa Seifert, Leihlyn Tinio, and Siren Røst Veflingstad, for your help and support at different stages of this project. From the very beginning, I had the full support of my employer, the Norwegian Institute for Defence Studies, for the PhD project and the topic. All obstacles to research have found their solution quickly and efficiently, leaving me to concentrate on the thesis as much as possible. I am really happy to have been supported and encouraged by my colleagues at IFS. Thank you all! And Magnus Petersson, Rolf Tamnes, Therese Klingstedt and Sven Holtsmark in particular. Special thanks go to Kåre Dahl Martinsen. Without your encouragement, advice, humour and critical eye, writing up would have been far less of a positive experience. You set an example I hope I can follow. The Library of the Norwegian Defence University College, with Head Librarians Hege Undem Store and later Nina Eskild Riege, has provided me with the best imaginable support in locating and obtaining books and articles from libraries in Norway and across Europe. I am indebted to the Norwegian Military Geographic Service for solid support in the final stages of this process. Thank you Marte Blystad for technical support at various points and for friendship over many years. In Oslo, I have benefited from participating in an engaged and open-minded research community among specialists on Russia and Eurasia, which attracts also students, civil servants, businesspeople and an engaged public. My sincere thanks go to Arild Moe, Indra Øverland and Heidi Kjærnet for including me and offering input and discussion at various stages of the project, and to everyone else for being part of the community. The first round of fieldwork for this thesis was hosted by the Higher School of Economics in Moscow, which provided a stimulating environment for developing the research further. I am very grateful to everyone who had the time to meet me for formal interviews as well as informal discussion and advice on both rounds of fieldwork. In Moscow, a big thank you also to Christoph Neuberg and to the editorial team at Neft’ i Kapital. Along the way from beginning to end, I have been all the happier to discuss and learn in an international environment. Thank you Hanna Smith, Veli-Pekka Tynkkynen and Pami Aalto, Jonas Grätz and Katharina Hoffmann, Margarita Balmaceda, Caroline Kuzemko, and Elena Shadrina for your questions, advice and discussion at different stages of research. Through the years of researching and writing this thesis, I have been fortunate in having the support of family, colleagues and friends in a way that has enriched my life both in research and outside it. Thank you Nils and Inger Lavik Opdahl for your interest, encouragement and babysitting over the years. Thank you Magnar, Knut and Synneva for being such a great, loving family. Finally, thanks to Chris Saunders, who efficiently and with humour copy edited the text for conventions of language, spelling and grammar. I take full responsibility for any remaining errors and mistakes. List of Contents List of maps, tables and graphs ........................................................................................................ 10 1. INTRODUCTION .......................................................................................................................... 1 1.1 Aim and scope ......................................................................................................................... 1 1.2 Research questions and analytical aims .................................................................................. 2 1.3 Levels of analysis ..................................................................................................................... 5 1.4 Approaches to state–company relations ................................................................................ 5 1.5 The development of the state and state–company relations ................................................. 7 1.6 The Soviet institutional legacy .............................................................................................. 13 1.7 A gap in our understanding of Russian foreign policy ........................................................... 17 1.8 Energy and Russia’s political development in the literature ................................................. 20 1.9 State–company relations and institutional development in Russia ...................................... 22 1.10 Aims, objectives, and research design ................................................................................ 23 1.10.1 The cases in this study .................................................................................................. 25 1.10.2 Case selection ............................................................................................................... 27 1.10.3 Formality and informality ............................................................................................. 28 2. THEORY ..................................................................................................................................... 30 2.1 Institutions, organisations and their place in political change .............................................. 30 2.2 Institutional formality and informality in Russia ................................................................... 35 2.3 Formality and informality in institutional development ....................................................... 38 2.4 Institutional development in a limited access order ............................................................. 41 2.5 Resource rents and the Russian economy ............................................................................ 43 2.6 The shape of elite interaction across the politics-economy divide ....................................... 47 2.7 Energy companies as concessions ......................................................................................... 49 2.8 Towards a definition of the state .........................................................................................

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