As
such, you won’t be surprised to learn that the largest energy companies in the world are
owned and operated by governments, and they include: Saudi Aramco, Russian
Gazprom, China National Petroleum Corp. (CNPC), National Iranian Oil Co.,
Petroleos de Venezuela, Brazil’s Petrobras and Malaysia’s Petronas. How they’re
run varies wildly—as does where their wealth goes.
While
we’ve all been inundated with the massive amount of press on the scandals
engulfing Brazil’s Petrobras, there are a few that stand out for creating and
maintaining some of the world’s most interesting and colorful political
leaders, who have grown their wealth through holdings in state-run oil and gas
in some cases, and through more direct means in other cases.
Five state-run oil wealth stories
stand out in today’s world: Russia, Azerbaijan, Kazakhstan, Angola and Brunei.
Vladimir
Putin, Russia
Estimates of Russian President
Vladimir Putin’s wealth only comes in ranges because most of his wealth is hidden
through offshore companies or under clandestine financial devices.
The lower end of the range sits at
US$40 billion – a 2007 figure based on research by mid-level
Kremlin advisor Stanislav Belkovsky, which he later said had grown to US$70
billion. At this level, Putin already stands among Forbes’ Top 10 rankings of
the world’s richest billionaires, though the magazine commented in 2015 that it
could not verify enough of his assets to put him on the list.
Earlier this week, the International Business Times said Putin’s
fortune could be as much as $200 billion.
The majority of Putin’s wealth comes
from his stakes in the oil sector. He is said to own 37 percent of
Surgutneftegaz, 4.5 percent of Gazprom.
“At least $40 billion,” Belkovsy
told the Guardian in 2007. “Maximum we cannot know.
I suspect there are some businesses I know nothing about.”
Putin’s trophies of wealth are far
from subtle. His $1 billion palace on the Black Sea features “a magnificent
columned façade reminiscent of the country palaces Russian tsars built in the
18th century,” according to the BBC, which also procured evidence that a secret
slush fund had been created by a group of oligarchs to build the estate for
Putin, personally.
It’s definitely not a lifestyle one
can afford on a declared annual salary of around
US$140,000.
In a 2012 dossier, Former Deputy
Prime Minister Boris Nemtsov (later murdered) claimed that the Russian
president owns a total of 20 palaces, four yachts and 58 aircraft.
“In a country where 20 million
people can barely make ends meet, the luxurious life of the president is a
brazen and cynical challenge to society from a high-handed potentate,” he said,
according to the Telegraph.
But according to Putin himself, his
wealth is not measured in money. In Steven Lee Myers’ book The New Tsar, Putin
is quoted as saying: “I am the wealthiest man
not just in Europe but in the whole world: I collect emotions.”
“I am wealthy in that the people of
Russia have twice entrusted me with the leadership of a great nation such as
Russia. I believe that is my greatest wealth.”
Azerbaijan
In 2003, Ilham Aliyev became the
newly elected president of Azerbaijan. Thirteen years later, his name appeared in the Panama Papers – a massive
leak of financial documents from the Panama-based law firm Mossack Fonseca,
which revealed the shady financial dealings of some of the world’s most
powerful political figures.
Months before the October 2003
presidential elections in Azerbaijan, Fazil Mammadov, Azerbaijan’s tax
minister, began paperwork to form AtaHolding – a company that has become one of
the nation’s largest conglomerates. It holds interests in telecommunications,
construction, mining, and oil and gas for a total value of $490 million,
according to the last filings in 2014.
A second entity – this time a
foundation – called UF Universe holds more assets, but Panamanian laws
regarding the confidentiality of foundations are strict, which makes uncovering
dollar amounts difficult.
Aliyev’s two daughters and wife also
have links to offshore companies managed by Mossack Fonsenca. Incidentally,
Aliyev just named his wife Vice-President of Azerbaijan.
How much is the First Oil Family
worth these days? No one really knows, but enough to make it onto this list.
Kazakhstan
Kazakh President-for-life Nursultan
Nazarbayev was also named in the Panama Papers as a tax haven owner. He had two
companies registered in the British Virgin Islands, which he used to operate a
bank account with an unknown amount of funds, and a luxury yacht.
The revelations were particularly
loaded with hypocrisy because of Nazarbayev’s push to encourage his country’s
wealthy to repatriate funds from abroad in order to make them taxable.
“We’ve raised many rich people:
billionaires, millionaires,” he said, when oil prices tanked in 2014 and the
government began using sovereign wealth funds to fund operations. “They are
showing off; (their) pictures in Forbes… They look good, with makeup,
well-groomed, well-dressed. But it is Kazakhstan that enabled you to earn all
this money… Bring the money here. We’ll forgive you.”
Angola
Things here may be about to change,
because President Jose Eduardo dos Santos has said he plans to step down after
decades in power, and won’t be running in August’s presidential elections, but
still plans to control the ruling party. Here, wealth is all about Sonangol,
which has been marred in controversy since the president last year named his
daughter as the head of the state-run oil company.
Angola has massive oil wealth, yet
the bulk of the country’s 22 million people live in poverty, and
critics say he’s mismanaged the country’s oil wealth and created an elite that
largely consists of his massively rich family. But this scheme is being hit
hard by the fall in oil prices that began in mid-2014, and the people are no
longer complacent in their poverty.
The president’s
daughter, worth an estimated US$3.4 billion before she took over the
state-run oil company, has been described by Forbes as Africa’s richest woman.
Brunei
And here’s one that’s probably not
even on your radar, but it will be—sooner rather than later.
Vast reserves of oil and natural gas
have made Sultan Hassanal Bolkiah of Brunei one of the richest leaders in the world. The Sultan is believed to
be worth US$40 billion at the low end, and while ‘his’ holdings officially
belong to Brunei, in reality they belong to the royal family.
Brunei is the third-largest oil
producer in Southeast Asia, and pumps out, on average, 180,000 barrels per day.
The royal family has controlled everything to do with oil and gas since the
1970s, and the line here between royal family assets and national assets is
exceedingly blurry.
Vulnerable
or Not?
The thing about these political oil
leaders is that they’re not really vulnerable—yet. It would take an event such
as that which brought down Gaddafi (said to secretly be worth US$200 billion) in Libya to change this.
In Brunei, things may be about to
change, and the Sultan may find his wealth considerably downsized. Oil
production is down 40 percent since 2006, and what’s left has lost a great deal
of value due to low oil prices. Nearly 96 percent of Brunei’s exports are oil,
gas and related products—that tops even Saudi Arabia, Kuwait and the UAE.
Brunei could run out of oil in just over 20 years, but then again, the Sultan
is said to have massive real estate holdings to tide him over.
Angola’s president is stepping down
and the oil price crisis has hit him hard, but he’ll still control the ruling
party and a new president will defer to him (and his daughter).
In Kazakhstan, Nazarbayev is president
for life. In Azerbaijan, the family elite is as strong as ever and will
continue to be so through any means necessary. In Russia, sanctions simply
haven’t worked because they are designed to target those around Putin, and
Putin appears to have designed it so they are always vulnerable to him first
and foremost.
As Russian businessman and former
Putin friend Sergei Pugachev notes to the Guardian, and as reported by U.S. News and World Report: “Everything
that belongs to the territory of the Russian Federation Putin considers to be
his. Everything – Gazprom, Rosneft, private companies. Any attempt to calculate
it won’t succeed. … He’s the richest person in the world until he leaves
power.”
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