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Boom prompts oil barons to seek respectability

Russia’s post-Soviet oil industry was restructured by robber barons who showed a scant regard for minority shareholders and ran their businesses on a shoestring, salting away funds abroad. Now, though, a harder government line and, above all, high oil prices, have encouraged modernization and a desire to please foreign investors

Most Russian oil companies comprise a jumbled rag
bag of assets

Record high crude oil prices on international markets and a change of mentality following the slap in the face of devaluation have changed the style of Russia's oil barons. Asset stripping and abusing minority shareholders used to be the name of the game: now production, investment and good behaviour are the fashion.

With money to burn on the back of record international prices, for the first time since the fall of the Soviet Union the leading companies are investing upstream and downstream to improve their profitability and efficiency. They are tying up with international experts and even co-operating with each other. And a new phrase can be heard in the boardrooms of the oligarchs, Russia's powerful business elite: "shareholder value".

Many observers reckon that the oligarchs' new look will fade as soon as the oil price drops below $18 a barrel.

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