Moscow insists the controversy over oil company Yukos is an internal affair. But western countries, including Germany, have vested interests in the matter. Critics say that's clouded judgment of Russia.
Critics say Germany is ignoring Moscow's heavy-handed tactics
While the forced dismantling of Yukos by the Kremlin has shaken many western investors' confidence in Russia as a place to do business, government officials even this month confirmed that Berlin is actively encouraging German energy companies to invest in the Russian energy sector.
German firms are already there. E.on, a German utility, has through its subsidiary Ruhrgas a 6 percent stake in Gazprom, the state natural gas monopoly. In a complex series of behind-the-scenes shuffling since Yukos' main unit, Yuganskneftegaz, went on the auction block on Sunday, Gazprom or another Kremlin-linked firm is thought by many analysts to likely be the future owner of Yukos' prize asset, which is responsible for 10 percent of the country's crude oil output.
"Russia represents a huge opportunity and we Germans have privileged access to the market," Bernd Pfaffenbach, Germany's deputy economics minister, told Financial Times Deutschland last week. "There are signs that we might even be able to play a role in exploration."
E.on, along with RWE, another leading energy group, told the paper they are considering expanding their interests in Russia and would take another look at the assets of Yukos after the auction.
Keen to do business
The German government has shown eagerness to enter into business with Russia. Chancellor Gerhard Schröder has announced a "strategic partnership" with Russia, hoping to secure access for German companies to Russia's market and energy resources.
On a recent two-day visit to Germany by Russian President Vladimir Putin, Schröder and the Russian leader, who have a warm, personal relationship, talked extensively about strengthening business ties between the two countries. Germany energy chiefs regularly accompany Schröder on trips he makes to Russia.
"Trade between Germany and Russia is developing very dynamically," Schröder said on Monday during Putin's visit to Germany. "Russia is an enormously important market in which German companies must be present."
Statements like these made during the controversy over Yukos and the trips with energy executives has led critics, even those in Schröder's own party, to argue that the chancellor has focused on market access at the expense on other issues such as human rights in Chechnya or Putin's one-time backing of Viktor Yanukovych, the Ukrainian prime minister and disputed winner of the presidential election there.
Robert Amsterdam, a Canadian lawyer representing Mikhail Khodorkovsy, the Yukos' founder who is currently in jail on charges of tax evasion, accused Schröder of supporting the "breach of law" on the part of the Russian government regarding the embattled oil giant. He said Schröder was well aware of the machinations on the part of Moscow to gain control of Yukos, but that he had turned a blind eye since criticism would not be in the best interests of German energy concerns.
Amsterdam also levelled criticism against Deutsche Bank and Dresdner Bank, accusing them and other multinationals of a willingness to help finance the forced dismantlement of Yukos. The two German banks, along with ABN Amro, BNP Paribas, Calyon and J.P. Morgan, were to lend Gazprom the billions needed to buy the Yuganskneftegaz unit.
Russia's state-owned oil company Rosneft's headquarters on the Moscow River
In the end, however, the banks backed out of the deal and Russia sold Yuganskneftegaz to a previously unheard-of company, Baikal Finance Group, which days later was bought by the Russian state oil firm Rosneft. Rosneft's chairman, Igor Sechin, is a close associate of Vladimir Putin and doubles as deputy head of the Kremlin administration.