Novak to continue dealing with OPEC as deputy prime minister
Although Alexander Novak is now formally not responsible for Russia’s energy industry, he is expected to continue acting as the country’s main delegate to OPEC or at least to help his successor with negotiations. OPEC+ is expected to announce its new policy decision on output cuts at the beginning of December.
Alexander Novak is likely to remain Moscow’s main representative at the Organization of the Petroleum Exporting Countries (OPEC) and provide stability during oil market volatility, says Reuters citing industry sources. Earlier this week, the former minister of energy was promoted to deputy prime minister. Novak has headed the Ministry of Energy since 2012 and led Russia’s negotiations with OPEC. He has developed a personal rapport with many OPEC leaders and played an important role in a deal to cut global oil output. The first agreement was signed in 2016, while this year, a deep fall in fuel demand and unprecedentedly low oil prices due to the COVID-19 pandemic have pushed OPEC+ to deepen output cuts.
CEO of hydropower company RusHydro Nikolai Shulginov has been appointed as Russia’s new minister of energy. Shulginov, who is now 69, has worked in the electric power industry since 1975 and headed RusHydro since 2015.
In his first public comments after the appointment, Novak said he would oversee Russian energy strategy “in tandem” with Shulginov. “Novak will remain in charge of OPEC ties, while Shulginov is likely to oversee the power sector,” considers an anonymous industry source. He also believes that Shulginov doesn’t have administrative tools, such as political influence and connections, to strike a balance between head of Rosneft Igor Sechin and CEO of Lukoil Vagit Alekperov, while Novak has successfully managed to navigate the different interests of Russian oil producers.
Another source close to Novak assumes that Novak will at first help Shulginov in dealing with OPEC, while the third industry considers that Novak’s promotion will bring him more respect of OPEC officials. Next formal OPEC meeting concerning future output is scheduled for 30 November and 1 December.
On 9 November, President Vladimir Putin announced a new government overhaul involving five Russian ministries. According to Kremlin Spokesperson Dmitry Peskov, the reshuffle was the result of a normal ministerial rotation and not tied to the ministers’ performance.