The two weeks I spent in Houston following this year's Offshore Technology Conference (OTC) were a real eye opener. While doing "sales follow- up" I was literally chased for meetings by U.S. oilfield equipment and technology companies who all seem to have suddenly woken up to the fact that Russia is more stable than the Middle East or Venezuela. (To find out what they think about West Africa, you'll have to read further on.)
That's great for U.S.-Russian business relations, right? Well, for the most part - "yes." But that's not to say that a few of these conversations did not leave me talking to myself in the bathroom mirror. Two meetings stood out in particular:
Wannabe U.S. exporter to Russia: "We want to get into Russia but we're worried about getting paid."
Me: "What do you mean? My Russian clients always pay and if you open a rep office you can even repatriate hard currency."
Wannabe U.S. exporter to Russia: "No, I know they pay. The problem is they pay you in "boots", or is it "galoshas" that they call it?
Me: "Huh? Boots? Galoshas (a word last spoken to me by my Polish grandmother in Chicago in 1963). Today? In 2004? "
Wannabe U.S. exporter to Russia: "Well that's what they offered when my brother-in-law Jake went there in 1992 and had one too many vodkas with some Russian guy in Moscow."
Me: "Why didn't you take the galoshas and send the drunk in Moscow a pair of rattle snake skin cowboy boots? "
What about this one?
Wannabe U.S. exporter: "I know I need to sell to Russia but I'm afraid of the corruption."
Me: "That's a reasonable concern. I assume you're not doing business internationally yet."
Wannabe U.S. exporter: "Oh yes, we are very active in Nigeria."
Washing Money at Swindler Bank
'Nuf said? (Readers who do not understand my inability to respond to the Nigeria comment should write me and ask for a copy of one of the "spam-o-grams" I get daily from various distant relatives of far too many recently deceased Grand Pubah, Excellency Plenipotentiary of Nigeria who leave $50 mln in a safety deposit box. They offer you a commission for helping to move the money out of the country. Maybe one of these days I'll write a column about the fun that my Russian lawyer had when he answered such an email with a joke proposal to transfer the money to "Zhulik Bank" in Moscow. ("zhulik" is a Russian word for "swindler" and believe it or not, the spammer took the bait and replied with a request for "Zhulik Bank"'s SWIFT code).
So what's my point?
Just that the reasons that many foreigners give for shunning the Russian market are not the real reasons at all. The problem - if you ask me - is language! In the country of Russia, people speak Russian. So if you're worried about navigating a business environment that might be corrupt, you may prefer Nigeria. At least there, you can be corrupted in the English language.
Now, allow me to pick a bit on the British (who started the whole thing with their English speaking empire). A friend in Moscow who advises foreign businesses in market entry told me recently she had received an inquiry from a U.K. company asking, "What is the second business language in Russia after English?" Answer: Russian is the business language, full stop; English comes in second - but for the most part among young people. At least middle-aged Russians have an excuse - they weren't allowed to study foreign languages in Soviet times. Fraternizing with foreigners (unless you were KGB) got you a one-way trip to Siberia (and it wasn't to look for business opportunities in the oil sector). It's troubling how what we used to call the "Free World" uses its freedoms. We don't study foreign languages and then we make up silly excuses as to why don't do business abroad.
When the United States declared war on terror, I recall a feeding frenzy of news articles about the military and U.S. security agencies' urgent need to hire translators, interpreters and interrogators who could speak Dari and Pushtu (the languages of Afghanistan) and any number of other languages and dialects of today's battlefields. Enrollment in Russian language studies in the United States had taken a nosedive with the fall of the Berlin Wall for understandable (so to say) reasons: We no longer needed to "know thine enemy." The Soviet enemy had been vanquished and now, 10 years later, we had new enemies and bright students with vision were signing up to study Arabic and Chinese.
Choose Your Friends Wisely
So, I guess the message is, we don't need to "know thy friends". Or much worse, that we befriend anyone who speaks English (and is not our enemy) and we ignore everyone else. Not wise, I say. Thou must know those who can "keep thee warm in winter and fill thy car with gasoline." (And it is especially prudent to know those who can do this unimpeded by suicide bombers.) If you read my column in April (and if you didn't, you can find it at www.oilandgaseurasia.com) you remember that I spoke of Russia's future as a provider of liquefied natural gas (LNG) to the United States. I quoted a friend in Washington who observed that while the economics of such a relationship made sense, there were still too many Cold War era bureaucrats with entrenched "anti-Russian" policy interests.
Sorry, but Washington isn't alone. I was really surprised by the runaround in Houston at OTC 2004 which gave LNG a high profile as a conference topic but whose organizers turned a deaf ear to the idea of getting a speaker from Russia on the experts' panel. I tried and, among other things, was asked how we would handle the "language problem." (For the record, the candidates we had in mind speak "English" with less of an accent than some Texans I know.) But, we weren't the only ones to get the cold shoulder. Officials at Russia's new Consul General's office in Houston told me they were refused a list of Russian participants - the organizers told the Consulate that they didn't know.
Not to worry. Not only did Oil&Gas Eurasia's Bojan Soc find and interview OTC's Russia delegation (read all about it on pages 44-49). But this week, U.S. Deputy Energy Secretary Kyle McSlarrow spoke at the Moscow University for International Relations about the U.S. commitment to build facilities to receive LNG from Russia. "McSlarrow's visit comes 10 days after U.S. Energy Secretary Spencer Abraham came to Moscow to call for an increase of Russia's energy exports and for the acceleration of Gazprom's projects to liquefy gas in the Arctic for sale to the United States," The Moscow Times reported on June 8.
At OGE, we're on the right track. And we'll tell you straight while also bridging the language gap by delivering the story in your language - Russian or English. We'd hate for any of you to end up like that poor Nigerian con artist who is probably still trying to find the SWIFT code for Moscow's "Zhulik Bank." (Write me at: [email protected]).