Watching the World

Russias Communist party won 22% of the seats in Moscows 450 member Duma (lower parliament) in elections that took place Dec. 17.

Earliest results from remote eastern regions and Siberia showed Communists had won a dominant position in many areas.

For a short while there was speculation about Communists taking a firm hold on government. But this faded as results came in from western areas, including big cities where free enterprise has taken hold fastest.

My fanciful speculations ran to whether there would be a return to Soviet style saturation drilling methods, with feet drilled per day rather than hydrocarbons discovered as the measurement of success.

I also wondered whether there might be a return to designating fields in the Soviet manner, with names like Glorious October Revolution field and 28th Hussars field reappearing on Russian oil maps.

Talking to people about what might have happened had the Communists returned to power, it appeared I was in a minorityprobably of oneto consider such things.

Fear of uncertainty

Brian Hall, chairman of Aminex plc, London, said he had thought about the potential effects of a strongly Communist Russian government but was not particularly alarmed by the prospect.

Aminex owns half of the Amkomi joint venture in western Siberia, which is producing oil from North Arreskoya and Isakovskoya fields and developing Kirtayel oil field (OGJ, Oct. 30, 1995, p. 12).

Hall said, Aminex has a large Russian shareholder that has operated under the Communist regime as well as free enterprise. We would expect these links to remain unchanged.

Hall was less anxious about there being a Communist government in Russia than about there being no government at all or general political uncertainty.

Uncertainty was our big worry, Hall said. A Communist government would not affect our thinking about being in Russia. There might be some reversal of reforms, but general progress would not be affected by a Communist government, although it might be split into factions.

Reform or rot

Lindsay Horne, executive director of the energy derivatives group at Lehman Bros., London, said industry and oil markets would view a Communist government differently, but neither would be too concerned.

As far as Russian oil industry is concerned, Horne said, absolutely nothing would happen because Communists need money like anybody else.

A Communist government would need western help because the country must either continue down the path it is going or rot. The Communist party winning the election would not alter that.

Horne said the only way Russian government would change is if the right wing party led by Vladimir Zhiranovsky took control in presidential elections this year: Then we might get Russian troops massing on the borders, and there would be changes.

Oil traders did not react much to the election results, Horne said: They thought so what. They have been fighting political shadows in the Middle East and Russia for years. Now they need military movement before they bat an eyelid.