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Interview

with Vladimir Bagreev, Head of the Russian Representation, NRCC (Norwegian-Russian Chamber of Commerce)

14.01.2010 / Energyboardroom

In your role as the head of the Russian Representation of the NRCC, what role do you play in advancing the interests of Norwegian businesses in Russia?

I worked with Norway for around twenty years, and during this period of time, the idea of organising a Norwegian-Russian business forum or chamber was in the air. However, due to different reasons, but mainly because of the Russian political and economic situation, this idea was postponed. But in 2003, twenty founders came together and established the Norwegian Russian Chamber of Commerce (NRCC), which was registered in Norway. These founders comprised of eighteen Norwegian and two Russian organisations, which worked at that time in the territory of Norway. The idea of this organisation was to address the lack of knowledge in the Norwegian business community about Russian realities, and to increase the knowledge in Russia about Norway and the possibilities for business there. On the whole, Norway for Russians is terra incognita. The situation is the same in Norway about Russia.

What would you say are the membership advantages of the NRCC?

The number of members of the NRCC speaks the most about its membership advantages: it has increased almost eight times. More than 85% of the companies are Norwegian, and have very diverse profiles. The NRCC membership rules states that private persons can become members, and so our members range from individuals, all the way up the scale to the leading Norwegian businesses and organisations, which are not only influential in Norway but across the globe: companies such as Statoil, Telenor, Aker Solutions, and Acergy, amongst others. The chamber has a core of financial credit organisations amongst its members: DnB, and Sparebank 1, one of the biggest bank holding companies in Norway; the Norwegian part of the Nordea Bank, Export Finance, and Innovation Norway, amongst others. The chamber is lucky to have such big companies on board, like Statoil, which is one of the chamber’s main sponsors. As well as StatoilHydro, the NRCC has a large share of other Norwegian oil and gas organisations of different sizes. The majority of the NRCC’s members are medium to small enterprises.

The Chamber’s members are generally companies that are already involved in cooperation with Russian partners, or which are well placed to develop their activity in Russia. That’s quite understandable, and moreover reflects in the NRCC’s board members, three of whom are former trade councillors of the Kingdom of Norway to Russia, and who are thus well-acquainted with the situation in Russia, and the realities of doing business there.

The chamber was founded by business and for business. In order to fulfil our main tasks, we firstly organise networking meetings. These have been organised in Norway since 2003, and in 2005, we came to the conclusion that to be a truly bilateral chamber, and to become even more effective and helpful we should have a representative office in the territory of Russia. The decision was taken to organise the representative office in Russia, and we successfully completed this task, and since that time I have been the head of the NRCC representative office in Russia. The chamber started to organise networking meetings in Russia too, in Moscow, but also since 2008 in St Petersburg, and since last year in Murmansk and Archangelsk.

Networking meetings usually consist of two parts. The first is more formal, where we invite leading specialists to lecture on their chosen fields, for both Russian and Norwegian members. These normally address concerns such as taxation, accountancy, customer legislation and so forth. The chamber tries to keep the finger on the pulse of Norwegian Russian relations, and that is why for example on May 15th we had a network meeting in Moscow with Knut Hauge, the Norwegian ambassador to Russia. At our September meeting, the chief of the Registration Department of the Moscow Registration Chamber was our main lecturer, and so on.

During the official part of networking meetings, the chamber also gives effective opportunities for our members to represent their activities to our colleagues, to explain their aspirations about Russia.

The second part of the networking meeting is more informal, and from time to time it is just as useful as the first official part, because it gives opportunities for our colleagues to meet and discuss, and organise activities informally.

The second activity that the chamber organises is seminars. They are divided into two parts – initiative seminars, which are organised by the Norwegian Russian Chamber of Commerce, and the seminars ordered by our members or other companies. The common themes are topics such as how to live and work in Russia, and usually include all the questions covering the daily realities of doing business in Russia: accountancy, legislation, visa and consultancy services, customer and labour problems. A lot of attention is paid to the questions of mentality and cross-culture collaboration. In spite of the fact that Russians and Norwegians are very close to each other (we have a common border and even language), there are major differences in mentality. These differences from time to time are the obstacles in the way of Russian-Norwegian business development. As a result, it’s very important to increase the information and the knowledge of both sides.

One of the biggest events in Norwegian-Russian relations in the recent past has been the dispute between Telenor and the Alfa Group. How difficult has that made it to do your job on a daily basis?

Big Norwegian players like Telenor and Statoil are the country’s equivalent of Gazprom in Russia. They are big players, and the NRCC is happy that the leaders of not only Norwegian but also world business can see that it is beneficial for them to support the Norwegian-Russian Chamber of Commerce. Of course, the chamber tries to help them in any way it can. For example, with Telenor, the chamber took meetings with different Russian authorities and organisations in order to try and ease the situation. I cannot say that the NRCC influenced the solving of the problem, but it may just have contributed a little.

Statoil is another company that the NRCC is very glad to have numbered amongst its members and main sponsors. Being Russian, I have seen their influence on Russia, and in my opinion they have been doing a very good job for many years. For a long time, they have been trying to plough the soil in order to prepare for friendly and fruitful development of Norwegian Russian relations, and not only in oil and gas fields, which is their main focus. They have organised a very effective collaboration with the Moscow State Institute of International Relations (MGIMO), preparing specialists for oil and gas fields. This institution has been working successfully since 2004.

Is Statoil leading the way for other Norwegian oil and gas companies to enter the Russian market?

They are doing a lot in the northwest part of Russia, in Arkhangelsk and in Murmansk, where they took part in the Shtokman development, and where the regional suppliers organisation was created. With the assistance of this organisation, they are collecting the best prospective suppliers for the oil and gas sector. They moved ahead in a very good manner. Last year a quadrilateral agreement was signed with the University of Murmansk, the University of Arkhangelsk, the University of St Petersburg and Statoil as the fourth party. This agreement is about preparation of specialists for the oil and gas industry, on the basis of Norwegian standards and in collaboration with Russian standards, focusing on their innovation technique, and modern technology.

What are the main challenges and opportunities for Norwegian companies looking to come into these developments? What stands in their way?

The Russian situation is changing in my opinion, and in a positive direction. Although there are those who might complain that the situation is not changing quickly enough, they should keep in mind that Norway started their national oil and gas project in the 1960s. Russia first made steps into capitalism only fifteen years ago.

The situation can be likened to trying to turn around a huge ship. It requires a lot of effort, but also a lot of time, if you want to turn the ship without breaking it. In spite of all our ambitions and shared desires, it’s impossible to achieve everything in a day. This is mainly due to the fact that the main problems in Russia do not lie in the material world, but in the mentality.

Do you have specific projects for these small oil and gas companies that want to come to Russia?

As well as the seminars, which help to teach Norwegian businesses about operating in Russia, another aspect of the NRCC’s work takes the form of business missions. So far, the chamber has organised four of these missions, across Russia, with around thirty Norwegian companies from different fields including oil and gas. These business missions were organised over two days. The first day was dedicated to investigating the social and economic investment climate in the regions, starting with the specific investment legislation in the chosen territories. The second day, in cooperation with regional chambers of commerce, ‘business to business’ meetings were organised, in order to put Norwegian businesses in touch with their local counterparts in the community. There have been some very positive results from this activity. In our business mission to Krasnodar, two agreements were signed, each worth €10 million.

Last year the NRCC started a special Match-Making Programme (MMP) for its members. The main idea of it is to find Russian partners for Norwegian companies. I am glad to inform you that already for seven Norwegian SMEs, the MMP search has been successfully fulfilled.

Where would like relations to be between the two countries in five years time? Specifically with oil and gas, do you see the relationships developing?

One of the advantages of the NRCC for its members and for the development of international relations it is not specifically focused on one sector. From time to time in Russia it is necessary to have broader contacts, and a broader mindset. In the Russian mentality, these connections are very important. In my opinion, the problem today is that Norwegian businesses are mainly focused on the northwest part of Russia. Historically, this is quite understandable. However, it is worth bearing in mind that this is not the only part of Russia. There are serious reasons for this. One of the results of the Second World War was that industry was deliberately spread all over the Soviet Union, away from the country’s border with the West. One development I would like to see is Norwegian oil and gas companies beginning to explore other regions throughout Russia, where there are a lot of interesting prospective places for cooperation, such as Tyumen, the Far East, and Siberia. Statoil has a very clear understanding of this, and I hope other companies will follow them.

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