Russian Energy Minister Novak to Become Deputy Premier

(Bloomberg) -- Russian Energy Minister Alexander Novak is set to be promoted to deputy prime minister amid a government reshuffle, while retaining his role as the oil-rich nation’s OPEC+ negotiator.

Prime Minister Mikhail Mishustin said Monday on state television that he asked the State Duma, the lower house of parliament controlled by the ruling party, to approve Novak as a new deputy. Nikolay Shulginov, the chief executive officer at state-controlled utility RusHydro PJSC, was proposed as the new energy minister.

Novak, 49, has led the Energy Ministry since 2012. He has represented Russia in talks with the Organization of Petroleum Exporting Countries, helping to forge historic links with the cartel, and will continue to be responsible for that relationship, said a government official familiar with the situation. The spokesman for Russia’s government declined to comment when contacted by Bloomberg.

The OPEC+ alliance, with Saudi Arabia and Russia as its de facto leaders, has a significant influence over the world’s most important commodity. It agreed in April to make record curbs on production as the coronavirus pandemic battered oil demand. The group must decide this month whether to loosen its supply constraints next year.

On Monday, Novak’s and Shulginov’s nominations received approval from Duma’s Energy Committee. The Duma itself will hold a vote on the issue on Tuesday.

New Constitution

Under Russia’s new constitution, which has been in force since July, the nation’s deputy prime ministers and ministers must be approved by Duma lawmakers. It’s only afterward that it will be clear how exactly Novak will share responsibilities with both Shulginov and Yury Borisov, currently Russia’s deputy Prime Minister responsible for energy issues. Borisov also oversees the Industry and Trade Ministry as well as state-run nuclear company Rosatom, space state corporation Roscosmos and some watchdogs.

Novak’s purview as deputy prime minister would include the Russian energy sector as well as other industries, RBC reported earlier today.

Novak rose to international prominence as one of the architects of OPEC+, which rescued oil prices from a deep slump in 2016 and again this year. He co-chairs several intergovernmental commissions, including the Russia-Saudi commission focused on wider economic cooperation between the two countries.

Within Russia, he’s responsible for the production and transportation of oil, natural gas, and the development of renewable energy. He’s been involved in major domestic energy projects, such as the expansion of Gazprom PJSC’s gas-pipeline network and modernizing Russian oil-processing capacities. Novak also represented the industry’s interests in the governmental debates about changes in the oil and gas tax system.

Novak began his career in the Russian government in 2008 as a deputy finance minister, a role in which he worked on energy subsidies among other duties.

OPEC Secretary General Mohammad Barkindo, who has worked alongside Novak for the past four years, since the start of the group’s cooperation with Russia, welcomed his nomination. “Alexander Novak has been what I have always called a reliable and dependable bridge between OPEC and non-OPEC,” Barkindo said at an online panel session of the Abu Dhabi International Exhibition & Conference. “He’s a tested and proven leader in the whole meaning of the word.”

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