The U.S. Export-Import Bank is prepared to lend up to $1 billion immediately for the redevelopment of the Russian oil and gas industry as part of an overall U.S. effort to help put the old Soviet state-controlled economy on a free-market basis, the bank's vice chairman said here Thursday.
Eugene K. Lawson, emphasizing the Bush Administration's readiness to help underwrite Russia's economic reforms, said the loans could be used to buy U.S. equipment for the thousands of wells not in production, to repair pipelines and expand refineries and to develop new oil fields.
"These loans would be quick injections of capital that could be put to immediate use," Lawson said, describing an initial offer of between $500 million and $1 billion of loans, credits and guarantees as "just a beginning" for the Russian economy's crucial energy sector. "We can put very serious money, big money into this crucial area.
"What we are after is a permanent partnership with Russia," Lawson said after three days of talks with Russian officials, "and the oil and gas industry is the first step."
Lawson announced two loans totaling $82 million to finance the sale of oil-field pumps by the Texas-based Lufkin Industries Inc. to companies here and said that U.S. oil executives saw "a natural fit" with the Russian oil and gas industry, which is seeking the capital and equipment for its modernization and expansion.
"Russia probably has the greatest single potential for oil discoveries in the world," said Lawson, the son of an independent Oklahoma oil producer.
Lawson said that "thousands upon thousands" of oil wells are out of production here with broken-down equipment left unrepaired because there was no cash to buy spare parts, that thousands more wells lack the casings needed to pump the oil out and that others, still in production, need chemicals and equipment to increase their output.
"For a relatively small expenditure of money, Russia can improve its oil production overnight," Lawson said.
Lawson said the bank, which makes loans of about $12.5 billion a year, is ready to make unlimited credits available to finance both the expansion of U.S.-Russian trade and the transformation of the economy, which was based on state ownership and central planning, to one where market forces and entrepreneurship prevail.
The bank is also offering immediate credits of $100 million for environmental protection and a further $100 million for the conversion of some of the troubled atomic energy plants here to thermal power, Lawson said. It is planning similar special programs in agriculture and the conversion of the huge Soviet munitions industry to civilian production.
In addition to the Lufkin sales, the bank has provided $103 million in loans and credits in the past three weeks in seven other deals.
The loans were the first since the bank, originally founded in 1934 to finance U.S. trade with the Soviet Union, broke its ties with Moscow in 1974 as a result of the Jackson-Vanik Amendment restricting trade until the Kremlin permitted free emigration.
Although the Bush Administration lifted those restrictions in late 1990, political upheaval and economic turmoil here last year made it impossible to lend to the Soviet Union, Lawson said.
Pyotr Aven, the Russian foreign trade minister, told a Cabinet meeting Thursday that the country's export earnings, which were down to less than $2.5 billion a month in January, have now risen to $5 billion a month, offering considerable hope that the economy was beginning what will be a slow recovery.
Alexei V. Ulyukayev, the Cabinet spokesman, said the government now hopes that through freeing foreign trade from remaining bureaucratic relations, the country will be able to pay for expanded imports this year, stimulating economic growth, and to make its currency, the ruble, convertible.
The government, in further economic reforms, raised interest rates on savings accounts by up to 50%, freed vodka prices from state controls and allowed the private production of wine and beer.
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