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Some Private Barons Investing In Today’s Oil And Gas Industry

An energy website has just put together a list of the top five private billionaires with energy interests.

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The world oil and gas industry has of course been dominated for decades by giant multinational corporations and, as well, in more recent times by massive state owned energy enterprises as well. However there are also a number of key private players still in the game, and energy website has just put together a list of those it considers the top five private billionaires who have derived much of their wealth from energy interests. In this arena, the names of three Russian investors, all born in the Ukraine: Viktor Vekselberg, Mikhail Fridman and German Khan figure prominently.

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And it is a very ecumenical list, too, that has put together, including, in the top two spots, American mid-westerners and sworn Libertarian Koch Brothers, of Dutch immigrant stock, who run Koch Industries and who are worth collectively some $41 billion according to the Forbes billionaires list. In second place is Indian billionaire Mukesh Ambani, whom Forbes indicates is worth almost $23 billion and who runs the giant textile conglomerate Reliance Industries. Then, in third and fourth place, come Viktor Vekselberg and Mikhail Fridman, who are both familiar to readers of Jewish Business News.

Victor Vekselberg, 57, was born in the Western Ukraine, and after graduating from the Moscow Transportation Engineering Institute, in 1979, worked for many years as a research engineer in a state owned concern, until the fall of Communism in 1991. Today he has a net worth of over US$17 billion, according to the Forbes billionaire’s list.

With opportunities abounding in post Communist Russia, in his early thirties Vekselberg jumped onto the bandwagon of free enterprise like many others, and caught the attention of Boris Yeltsin after his re-election to President in 1996. With privatization of state assets firmly underway as state policy, Vekselberg built up the Tyumen Oil (TNK) company, into one of Russia’s most successful oil and gas exploration and marketing concerns, eventually forming a particularly lucrative partnership with BP.

Vekselberg then capitalized on his success with TNK by investing heavily in a diversified marketing company called RUSAL, which enjoyed particular success growing to become the largest aluminum production business in the world. He eventually amalgamated it with a number of other companies under his control to form the Renova Group, where he acts as chairman of the Board of Directors and has furthered developed the company to a status of among Russia’s largest business development enterprises.

Vekselberg has long harbored a keen interest in IT and telecoms as well, and was appointed by Vladimir Putin in 2010 to be director of Skolkovo, a project seeking to build a Russian rival to Silicon Valley.

Mikhail Fridman,  50, comes next on the list, with a personal net worth of over $18 billion, as estimated by Forbes. Much of his wealth came originally from energy interests, before he diversified into banking and insurance.

Mikhail Fridman, was born in the Ukraine. He graduated as an engineer from Moscow’s Institute of Steel and Alloys in 1986. He then started his career in trading and financial services before founding the Alfa Group Consortium in 1989. Fridman sits today as the Chairman of the Supervisory Board of the Alfa Group, now one of Russia’s largest privately owned investment groups.

Fridman has been a Russian representative on the International Advisory Board of the Council of Foreign Relations since 2005. Since 2005 he has also been a member of the Public Chamber of Russia.

As an active supporter of Jewish causes both in Russia and Europe, in 1996 he was one of the founders of the Russian Jewish Congress, and today sits on its governing board. He has made large contributions as well to the European Jewish Fund, a non-profit organization aimed at developing European Jewry and promoting tolerance and reconciliation on the continent.

Fridman is member of numerous public representative bodies, including the Board of Directors of the Russian Union of Industrialists and Entrepreneurs, and the National Council on Corporate Governance.

Fifth in the list comes Vagit Alekperov, CEO of LUKoil, Russia’s second largest oil company, whose personal net worth comes to nearly $15 billion according to Forbes.

Even though not in the top five, nevertheless German Khan, 52, comes pretty close, with a personal net worth of over $12 billion, according to the latest Forbes billionaire’s list. Khan was also born in the Ukraine, in Kiev, and he first met Fridman when they studied together to be engineers at the Moscow Institute of Steel and Alloys, graduating in 1986. To help finance their studies, the duo made some money trading in theatre tickets.

After graduating, Fridman and Khan went into business, in partnership with another fellow student, Alexei Kuzmichov, together establishing the Alfa Group Consortium in 1989. The company prospered in post Communist Russia, diversifying into banking, retailing, and telecommunications as well as the oil and gas company that they formed in eventual partnership with British Petroleum.

When the Alfa Group first took over oil company TNK, Khan ran the operation. When it became a joint venture with BP, he remained as its Executive Director.
Khan is married with five children and today lives in the outskirts of Moscow. He enjoys hunting and has a large collection of sporting guns and rifles.

Also like Fridman, Khan has been an active supporter of Jewish causes, including making large contributions to the work of the European Jewish Fund. He is also a leading member of the Russian Jewish Congress.

It is, perhaps, just a small coincidence that Fridman and Khan named their company the Alfa Group after the “Special Group A”, also known as the “Alpha Group, ” of elite special forces that was part of the former Soviet Union, and indeed likely at the very top of its command structure. The Alfa Group todays also controls the international mobile telecommunications company VimpelCom Ltd. By another apparent coincidence, another Soviet era strategic special forces group was called “Directorate B” or “Vympel.” Allusions to such historical entities may not mean much today in the West, but within Russia itself it could possibly be a subtle symbolic indicator of strength even today, and despite the complex, and sometimes controversial, histories of both of the two groups.



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