Petrostate: Putin, Power, and the New Russia

by Marshall I. Goldman

In the aftermath of the financial collapse of August 1998, it looked as if Russia's day as a superpower had come and gone. That it should recover and reassert itself after less than a decade is nothing short of an economic and political miracle.

Based on extensive research, including several interviews with Vladimir Putin, this revealing book chronicles Russia's dramatic reemergence on the world stage, illuminating the key reason for its the use of its ever-expanding energy wealth to reassert its traditional great power ambitions. In his deft, informative narrative, Marshall Goldman traces how this has come to be, and how Russia is using its oil-based power as a lever in world politics. The book provides an informative overview of oil in Russia, traces Vladimir Putin's determined effort to reign in the upstart oil oligarchs who had risen to power in the post-Soviet era, and describes Putin's efforts to renationalize and refashion Russia's industries into state companies and his vaunted "national champions" corporations like Gazprom, largely owned by the state, who do the bidding of the state. Goldman shows how Russia paid off its international debt and has gone on to accumulate the world's third largest holdings of
foreign currency reserves--all by becoming the world's largest producer of petroleum and the world's second largest exporter. Today, Vladimir Putin and his cohort have stabilized the Russian economy and recentralized power in Moscow, and fossil fuels (oil and natural gas) have made it all possible.

The story of oil and gas in Russia is a tale of discovery, intrigue, corruption, wealth, misguidance, greed, patronage, nepotism, and power. Marshall Goldman tells this story with panache, as only one of the world's leading authorities on Russia could.

Genres: Russia, Politics, Nonfiction, History, Economics, International Affairs, Business

244 pages, Paperback

First published April 30, 2008

About the author

Marshall Goldman was Professor of Economics Emeritus at Wellesley College and Senior Scholar at the Davis Center for Russian Studies at Harvard University. An internationally recognized authority on Russian history, politics, and economics, he met with Mikhail Gorbachev and interviewed Vladimir Putin, and advised former President George H.W. Bush and President George W. Bush on Russia. Goldman wrote for publications like Foreign Affairs, The New York Times, The Washington Post, The New Yorker, and The Atlantic Monthly; and appeared on numerous television programs, including The News Hour, Crossfire, Face the Nation, The Today Show, and Nightline.

Reviews

[Natalie K · Rating 4 out of 5]

Overall, this was a REALLY good book. I appreciated how fair and balanced it was towards Russia. Usually, books written by Westerners are so anti-Russian that they ignore facts. (See: Edward Lucas' work and Masha Gessen's work, among others.) This book was overall very fair and balanced.

In particular, I wish I could force every Russia-watcher to read Chapter 5, titled "Putin Takes Over: The Return of the Czar." Specifically, the section starting at "The Attack on Yukos" is very, very informative and important. This section makes some important points, namely: 1) Pretty much everyone who got rich in Russia in the 1990s did so illegally, so in this sense Putin's prosecution of Yukos head Mikhail Khodorkovsky was unfair, and 2) Khodorkovsky certainly was not the angel he's been portrayed as in Western literature. He stole people's money in the 1990s when his Menatep Bank folded (I've had Russia watchers tell me this never happened, but it did. The author of this book, who is definitely not pro-Putin, agrees with me and cites actual sources.) He was probably involved in some contract killings—if not directly, then by turning a blind eye to his subordinates who perpetrated them.

The author also dis-spells the myth that Khodorkovsky wanted to reform Russian business and make it transparent and "normal," for lack of a better term, as it is in the United States. Westerners think this means he was a good businessman, crusading against corruption. Not so, according to the author. Instead, he says Khodorkovsky embraced rule of law so that no one could do to his business empire what he did to acquire it (i.e. steal it). For reference, this passage is at location 2136 in my Kindle edition of the book. I don't have actual page numbers, unfortunately. In a somewhat delicious irony, this didn't help, and Khodorkovsky was arrested and his business broken up and sold.

Anyway, that's just one example of many from this book that's so fascinating. The author really does a good job of keeping balanced. To continue the Yukos example, he criticizes the Russian government for jailing Yukos lawyer Svetlana Bakhmina, which I don't fully agree with either.

The only criticism I could mount is the author's position about the 1999 apartment bombings that let to a re-ignition of the Chechen War. He gives more credence to the theory that the FSB planted the bombs in order to blame them on the Chechens than is warranted. I am familiar with the theory and think it's completely wrong. I suppose the author and I would have to agree to disagree on this. It is because of this that I downgraded the book by one star—otherwise, I probably would have given it five stars.

[Kw Estes · Rating 2 out of 5]

One-dimensional and chock-full of Russophobia. Though it may serve as a decent primer on Russia's history and present status as a leading energy producer and exporter, little positive can be said outside of this. Goldman straddles that uncomfortable line between popular current events writing and academia--not enough depth to be a scholarly resource, and too much wonk to appeal to the lay reader. Again, a primer at best, a xenophobic and paranoid diatribe at worst.

[Thomas · Rating 4 out of 5]

I really enjoyed this book on the "Russian oil wars" between Putin, the Yeltsin-era oligarchs, and Western energy companies. The situation is terrifying not because Putin is some sort of Darth Vader, but because it becomes agonizingly clear how little international resource development generates any real benefit for the average person; it's all a battle among the super-rich, be it in Russia, the U.S., the C.I.S., China, India, Africa or elsewhere.

I suspect Petrostate would be a bit dry for the average reader, but I found it fascinating. I've read elsewhere that the author may have misunderstood or misconstrued some of the technical details of petroleum and natural gas extraction and production. However, on the political stuff his details and references seem spot-on. I disagree with other reviewers who accuse Goldman of Russophobia; I think he praises Putin repeatedly for many of the things that Putin is good at. And given the nation that Putin inherited (following the incredibly corrupt Yeltsin years), I think there is much to admire about the man. But that doesn't change the fact that in international business terms Russia is now a de facto gangster state, or that Putin has essentially created a corrupt nationalized industry for the benefit of the few. There are huge ramifications for the balance of power not just in Central Asia and Eastern Europe, but across the globe. To be frank, this is some scary shit, even if you loooooooooooove Russia. I wouldn't be thrilled if U.S. business was exhibiting this kind of unchecked power...except, oh wait, it has tried, hasn't it? Mind-bogglingly scary stuff in this book. Looking ahead 20 years, I am not thrilled about the world that the next few generations of Americans *or* Russians is likely to inherit.

[Mauricio Ocampo · Rating 3 out of 5]

Well.... quite an informative book. Particularly the transition period between the USSR and Rusia and the differences between Yeltzin and Putin. The fight for the energy national resources between Putin and the oligarchs that benefited from the fall of the Soviet Union is another highlight. How Gazprom and Rosneft (the 'national champions' as Putin likes to call them among other state-companies) became what they are now is very interesting. Moreover, it strike me the case of what happened to Yukos and his former CEO and Abramovich's role on what it is now Gazprom.

However I only give 3 stars to this book because at some point it was VERY redundant and it's quite outdated.

[Kristjan · Rating 2 out of 5]

"Asked whether he agreed with former German Chancellor Gerhard Schroeder's description of him as an "impeccable democrat", Putin replied laughing: "Of course I am an absolute, pure democrat. But you know the problem? It's not even a problem, it's a real tragedy. The thing is that I am the only one, there just aren't any others in the world.

"After the death of Mahatma Gandhi there's nobody to talk to," he concluded."

[Emma · Rating 4 out of 5]

surprisingly interesting.

[Kevin · Rating 5 out of 5]

Goldman masterfully weaves the history of the Russian energy sector in this fascinating book. The most notable elements that seem to reoccur throughout Russian history, from Tsarist Russia through the Soviet period and still manifesting themselves today, are the need to import expertise and infrastructure to build up production capacity, followed by government seizure of the facilities through legal and illegal means and, finally, the expulsion of foreign workers and companies for a time until the whole cycle starts over again. Goldman's account of today's Russia and its oil and gas giants, Rosneft and Gazprom, provides a lot of food for thought about national security interests, both for the United States and for the European Union.

[Christopher · Rating 5 out of 5]

To be honest, my experience with economics begins and ends with the Econ 101 class I took in college. Therefore, I was surprised when I found myself unable to put this book down. I started this book hoping to gain insight into what Russia has been under Putin and where it is going, and this book did not disappoint. Though the author is an economist and tells his story through that lens, he explains the history of the Russian energy sector in the 20th and 21st Century in an engaging way with stories of corruption and scandal. He was right when he stated early on that the story of the rise of Russian energy has all the elements of a great movie or novel. Best of all, he explains it all in a way that engages those of us who are not economics experts. Pleasantly surprised!

[Christian · Rating 4 out of 5]

I wish I had time for fiction!! There's a lot of interesting non-fiction out there right now, and this book is no exception. It presents an insider's look at Russia's energy industry and how it has been manipulated by Russia's leaders, Putin in particular. There are some scary insights here - for instance, did you know that 40% of Europe's gas supply comes straight from Russia's GazProm fields? Imagine what kind of political power that gives to the Russian government. Anyway, this book is worth a look if you're into the machinations of global politics and the evolving outlook for energy supply and demand.

[Santanu · Rating 2 out of 5]

Although this book has a lot of facts, events, numbers it fails to generate insights from those facts. Sometimes it is easy to get lost in details of characters and dates. It is disappointing that there is short telling aspect to be found. Organization of the book and the writing style can be far more meaningful. For example, a bit of background of President Putin would have helped a lot in understanding the context. Also some organization chart off the main oligarchs and their relationship with various Russian Enterprises would have been really useful in pictorial diagram.

[Roman Schuster · Rating 3 out of 5]

This book is more about Gazprom than the 'New Russia', however indistinguishable the two have become. Very interesting read, though it seemed the author (or editor) got lazy towards the end. The last two chapters provide virtually no new information, and grammar/syntax mistakes became more prevalent. By far the most informative chapter was Chapter 3: Pirates Unleashed. The flow chart showing the consolidation of the gas industry after Soviet privatization measures in 1989 and beyond was a truly beautiful presentation of information.

[Vivien Chin · Rating 4 out of 5]

Russian politics is bad-ass, and the exposition was rather well-done. Learnt much about Russia and its oil politics, which is so bad-ass (which I've already mentioned, so never mind). Did previously read some reviews on Amazon that panned the accuracy of some of the facts Goldman put down in his book though, so read with a pinch of salt...

[Alexandra · Rating 4 out of 5]

Russian politics truly do read like a mystery novel. Fascinating, suspenseful, and very relevant. While Petrostate is pretty textbook-dry on a whole, Goldman does his best to make it into a who-done-it saga. Appreciated the maps and tables. Someone needs to write an original screenplay with Petrostate as a guide.

[Harmeet · Rating 3 out of 5]

Describes Russia as an energy superpower. Explores Oil and Gas industries in Russia, the breakup, rise of Putin, emergence as a stronger energy superpower. I liked the book, though facts and central arguments were repeated a few times.

[AC · Rating 5 out of 5]

Gazprom is one of the great emerging powers in the globe -- it is Putin's vehicle. Fascinating and essential reading.

[Marika · Rating 5 out of 5]

AMAZING. This book was published in May 2007, and it's about the potential for Russia to turn off gas reserves and freeze Europe. And guess what? It's happening NOW.

[Sarah · Rating 5 out of 5]

I read this when it first came out. A page-turner. I liked it so much that now I'm thinking of reading it again.

[Ok Montreal · Rating 4 out of 5]

This is a great book if you want learn how the oil industry works in Russia. Many shocking stories and really interesting.

[Macka · Rating 3 out of 5]

I have read this book at the same time as 'The Great Gamble' about Russia's invasion of Afghanistan and also 'The Oligarchs' about the later attempt at privatisation, both are good books and obviously complimentary, but the underlying thread in all of these is the dog eat dog world of Russia.

You are either stealing, or your stuff is getting stolen and the Russian energy market is a prime example of this.

The book goes into detail about the history of oil exploration and exploitation in Russia, giving great detail into local capabilities and the prevalent record of contract cancellations or takeovers once western companies are seen to have served their purpose in providing technology and expertise.

But I think the most important takeaways are towards the end of the book where a light is focused on Putins efforts at nurturing 'State Champions' such as Gazprom.

This company is like a giant octopus spreading its tentacles through all aspects of the oil market, which is then used to apply political pressure and it is made obvious here that recent attempts by other countries to limit their influence is entirely justified.

In some ways it is also a wakeup call to what might become of Chinese state champions, because while the Chinese push is slow and subtle but relentless (like getting beaten to death with a sponge), the Russian's are as subtle as a baseball bat to the face.

This lack of subtlety is surprising in itself because what is made evident in the book is the coupling of oil and state has made even obvious subversion by this company irresistible.

A good and somewhat timely read, that gives a foundational understanding of what gives Russia its heavy political influence, but also a idea of what Authoritarian 'State Champions' have in store for us all.

[Henry · Rating 3 out of 5]

Interesting topic, and the author clearly knows his stuff. I suspect this was written with college students in mind, given the organization, and it's clear that the author wrote this in many separate chunks and stitched the thing together afterwards. That's fine, in terms of providing facts, but there are multiple instances in the book where the same anecdotes are presented as if it was their first time. The author probably wrote those sections months apart and didn't realize that they were repeated. Not a huge problem, but it makes some parts of the book a little clunky

[Dmitry]

Поверхностная и скучная книга об истории российского бизнеса связанного с нефтью и с политикой.

(It's) a superficial and boring book about the history of Russian business related to oil and politics.

[Cherry · Rating 5 out of 5]

Yes, it is a little bit dated. But for its time, day-am it got stuff pretty dang right.

[flwrp0wr · Rating 4 out of 5]

Thorough, well researched, enjoyable to read, and extremely informative without insufferable western righteousness. A rarity in literature about Russia

[Nicki · Rating 3 out of 5]

Very intriguing and relevant to understanding modern Russian politics.