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Texan Takes on Perm, Russia

May 22, 2020

Most trips to Perm began with an early morning departure from the Moscow Aerostar Hotel which was the closest decent place to stay to the airport. A relevant premise in any edgy place is plan your exit and be as close to it as possible. It was at this hotel that the brutality of Russia was evident when a senior Russian government individual’s bodyguard took his body and pushed a surprised westerner against the wall as we walked together down a hall. That is protection at his most basic level.
The first of many two-hour Aeroflot flights from Moscow to Perm was interesting as the ancient aircraft seemed to struggle to lift off on the snowy winter morning. Moreover, the burned-out wreckages of previous failed take-offs and landings which were merely pushed off to the sides of the runway would sober up the most hungover passenger. The plane had no seat belts and no bin covers for the overhead compartments. There were obvious food smells coming from the galley but the meal was for the crew. A flight attendant came along with three plastic cups and waited for you to drink some unknown fruit beverage and return the cup. The local Russian passengers brought their own sausage and vodka to begin the day. We landed in Perm and my Moshvich companions asked what the awful smell was to which I responded “that is the smell of oil that will make us a lot of money.”  
The image above, on the left, shows the Permneft (our potential oil partners) Guest House which was the only place we could stay as Perm had no hotels for visitors at that time. It was a “closed city” of one million people with gulag prison camps and munition manufacturing factories. Therefore, you can imagine how few westerners had ever been to this city. Moreover, life was particularly grim at this time with no food and no money. Fortunately, the Permneft oil company had food and plenty of fuel for heat.

Over the course of many years, the Guest House was the place to stay where you turned the TV sound up to have a private conversation as the walls had ears. Once, after a night of many vodka shooters, this westerner woke up stuck to the bedsheet having bled during the night. It turns out there had been a fall during a late-night bathroom trip due to standing water from the failure of the drains to work. The incident dislodged a number of ceramic tiles on the wall. The good Boy Scout took toothpaste and glued them back to the wall and amazingly they adhered to the wall over the course of a number of trips before they began to dislodge due to the dryness of the next winter. It is one thing to face guns in the jungle but quite another to have to confront the wrath of an oversized babushka char woman. Moreover, the “capitalist” will not be responsible for “communist property” destruction. 

Over several occasions, we made trips to Solikamsk which was in the northern part of the Perm region and not far from the Arctic Circle. Finding a place to sleep in this miserable place was always a challenge. In the dead of winter, the snow on the sides of the road leaving town would be over six feet in height. The drivers always seem to have death wishes but the snow embankments provided a nice buffer from real danger.
On one occasion, my friend and close associate, Boris, and I made our way to the General Director of Permneft’s dacha some distance out of Solikamsk. As part of the signing ceremony, the massive General Director and his equally significant wife were gracious, with snacks and copious pours of vodka. His wife had coated slices of lemon with crystalized sugar to chase the vodka which was the first and only time I have ever experienced it. Another first experience was the burly General Director kept trying to kiss me on the mouth. When asked later, Boris said it was a "hangover" from the Brehznev era. I could have done without the kissing, particularly as when he made his landing approach, I turned my cheek and caught his cheek which was as rough as sandpaper since he had not shaved for some time.

On another occasion, I asked Boris what we should do about a particularly troublesome guy in the General Director’s organization. Boris responded, “Why don’t we kill him?” Recognizing he was deadly serious, I had to clarify our policy on such matters. On the other hand, given that very common off-hand reaction to a problem, I was always cognizant that feeling could run both ways in any business disagreement.

The senior oil official with the bodyguard referenced in the beginning was very helpful with his advice which may have been out of a sense of pity, a recognition that we were doing some good for his country, or just that we were becoming friends as we always hugged-but no kissing. In any event, as he loved hunting and was a clear expert on oil drilling, I invited him to Mongolia to advise the President of Mongolia that it would be foolish to insist we employ Russian rigs to drill there as the Chinese were better equipped to do so. In actual fact, he said the Russians could not organize lunch at that particular time much less move rigs into Mongolia and make them work. In any event, he was quite at home with the rigors of Mongolia.  
Over dinner there, he related a personal experience of his when he was the General Director of a large oil enterprise in Siberia. Russian mafia came to his office and demanded monthly protection payments and he clearly told them where to go. That evening the mafia boys placed phosphorus around the door of his residence which burned and illustrated that they could get to his family.

He, in turn, sent his plane to Italy, loaded up Italian mafia shooters, flew them to Siberia and had them standing behind him when the Russians asked for his final answer. He took a wad of money, handed it to the Italians and told the Russians seeking his response that they were dead if anything happened to him or his family. Their death contracts were purchased. He said that I would have to do something similar some day in Perm and he was correct. Rather than “death contracts” they were tastefully referred to as “Russian life insurance” policies.

The northern territory of the Perm region - “The Zone” - was home to numerous prison camps or gulags. In fact, they had emptied out not long before we entered the scene and, at times, several of our folks had to stay in them to find a place to sleep. Prison camps became a subject of great consternation with our Permneft counterparties as we were trying to finalize our joint venture boundaries. The coordinates given depicted a rectangle and it had been drawn as a triangle, thereby excluding potential oil reserves from the concession. The Russian counterparty continually screamed KGB! 

Therefore, it created a suspicion that somewhere in the region there could be the facility described in Nelson DeMille’s novel, The Charm School, where downed U.S. F-4 fighter pilots were taken to “Americanize” Russian spies to infiltrate into the U.S. As you might suspect, the U.S. intelligence folks were all over it and re-positioned a satellite to have a look from above. Well, there was no “Charm School” and just more huts and tundra and, as it turns out, the Russians had simply made an error with their coordinates. Somehow, we always think the Russians are more clever than they really are.

However, they are quite adept at “honey traps” that can be recorded and saved on videos in Moscow hotel rooms for future blackmail which we can see seems to work very well. Whereas, what happens in Vegas stays in Vegas, what happens in a hotel in Moscow stays in the vaults of the KGB. It is pretty clear that there are no Starbucks and McDonalds in the gulag shown below. 
When we sold our interest in the Permtex joint venture, our accounting firm was amazed that we had made money in the venture as they had never seen that situation before in any previous Russian oil investment. We added some more modern oil field practices and technology to the existing Russian equipment and workforce which combined the best economic strengths and practices of both sides.
The Russian partner who joined me on the first visit to Perm and the other gentleman who joined the trip to Mongolia combined forces to form a very successful oil drilling company, becoming oligarchs in their own right. Therefore, for a Russian story this one had a “Cinderella” ending which might make it one of a kind. By the way, generally kindness in Russia is punished as only power prevails. When asked how it all worked out, my response - “Very well as no one on either side was killed.”

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