VZCZCXRO4284
PP RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHMO #2632/01 2471313
ZNY CCCCC ZZH
P 031313Z SEP 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 9810
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RHMFISS/DEPT OF ENERGY WASHINGTON DC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 002632 

SIPDIS 

DEPT FOR EUR/RUS, FOR EEB/ESC/IEC GALLOGLY AND WRIGHT 
EUR/CARC, SCA (GALLAGHER, SUMAR) 
DOE FOR FREDRIKSEN, HEGBORG, EKIMOFF 

EO 12958 DECL: 09/02/2018 
TAGS EPET, ENRG, ECON, PGOV, PHUM, RS 

SUBJECT: XXXXXXXXXXX 
TRANSPARENCY

Classified By: DCM Eric S. Rubin for Reasons 1.4 (b/d)
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SUMMARY
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¶1. (C) XXXXXXXXXXX is seeking information about the companies’ relations with shadowy and reportedly Kremlin-connected oil trader Gunvor. XXXXXXXXXXX he just wants to shed light on the fundamental need for transparency in Russia, where no one seems to care about “massive corruption.” XXXXXXXXXXX End summary

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“TOTALLY NON-TRANSPARENT”
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¶2. (C) A primary and very large hurdle for those who analyze Russia’s oil and gas sector is the dearth of reliable information. News reports abound of large business transactions related to little-known companies and involving undisclosed sums. This lack of transparency is often discussed, but is seldom officially challenged. XXXXXXXXXXX

¶3. (C) XXXXXXXXXXX. Both XXXXXXXXXXX told us that the rising and reportedly massive volumes of trade through secretive Swiss-based oil trading firm Gunvor were the genesis of the cases against Rosneft, Gazpromneft, and Surgutneftegaz. This trade was resulting in reportedly very large profits for Gunvor and its secretive ownership, which is rumored to include Prime Minister Putin.

¶4. (C) XXXXXXXXXXX said he believes that XXXXXXXXXXXX and he is frustrated that nobody in Russia seems to care. According to XXXXXXXXXXX and XXXXXXXXXXX, Gunvor has risen quickly to become the top trader of Russian oil exports, now responsible for up to 50% of the total. He is seeking information from the companies about their relationships with Gunvor: trading volumes, the general terms of the contracts, and how this particular trading company was selected by the oil companies.  The companies, have stonewalled -- their relations with Gunvor are &totally non-transparent,” XXXXXXXXXXX complained.

¶5. (C) XXXXXXXXXXX XXXXXXXXXXX Transneft, the primarily government-owned oil transportation monopoly. XXXXXXXXXXX information related to 13 billion rubles ($530 million) that the company reportedly donated to “charity” in the last two years. According to XXXXXXXXXXX, the company gave more to charity than it spent on pipeline repair and maintenance or paid out in dividends. However, the company has refused to disclose any information related to its charitable contributions, including the names of the beneficiaries.

¶6. (C) XXXXXXXXXXX

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WHO OWNS RUSSIA’S FOURTH LARGEST OIL COMPANY?
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¶7. (C) Of the companies XXXXXXXXXXX one stands out for its secrecy -- Surgutneftegaz. As with Gunvor, the company is rumored to be one of Putin’s sources of undisclosed wealth. No one knows who the ultimate beneficiaries are of the company, XXXXXXXXXXX “Can you believe,” he told us, “that no one knows who owns Russia’s fourth largest oil company?” XXXXXXXXXXX told us that he personally does not believe Putin owns either Surgutneftegaz or Gunvor since the Prime Minister does not really need to have a direct link to an asset to benefit from it.

¶8. (C) XXXXXXXXXXX added that all requests for information from Surgutneftegaz are routinely denied. After numerous requests and many instances of “not our department” responses, sometimes someone in the company provides some vague information that is “totally unverifiable.” XXXXXXXXXXX said that unfortunately little can be done but to sue, and those suits are clearly going nowhere.

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NO ILLUSIONS OF WINNING, BUT SUITS TO CONTINUE
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¶9. (C) XXXXXXXXXXX------- 

COMMENT
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¶10. (C) Opacity is commonplace in Russian business, especially in the sensitive oil sector, and it is a major hindrance to modernization. Without a steady flow of verifiable information, efficient capitalism is impossible. XXXXXXXXXXX End comment. BEYRLE