Posted on 12/14/2006 2:14:34 PM PST by Tailgunner Joe
President Vladimir Putin insists he wants Russia to be a respected member of the community of nations. Why, then, does he keep doing things that remind us of the bad old days of the USSR?
Russia talks a good game about wanting more trade and investment with the West. But then it goes and does something crazy: seizing the assets of Shell Oil off Sakhalin Island. ...
Russia never had the technology to fully exploit its oil and gas reserves; it needed outside expertise. Which explains why Shell was in Sakhalin, one of Russia's most promising offshore oil sites.
But now, the Anglo-Dutch company is being elbowed out of the way by the state-owned energy group Gazprom. Shell has about 55% of the Sakhalin gas field; Japan's Mitsui and Mitsubishi have the rest. After Gazprom's move, Shell will have just 25%, Mitsui and Mitsubishi even less.
In effect, the Russian government is taking over, after Shell, Mitsui and Mitsubishi spent billions and did all the heavy lifting.
This is not an isolated incident. Russia is threatening British Petroleum's Siberian unit with the same bogus — and vague — claims of "environmental violations" it used to steal Shell's investment. ...
Shell and the others invested in Sakhalin based on the idea it would be a permanent investment — not that it would be grabbed just as it became productive. And what about the next bunch of investors you want to attract?
In this, Russia is acting more like the Soviet bully it once was than the respected member of the community of nations it claims to be.
(Excerpt) Read more at investors.com ...
"In this, Russia is acting more like the Soviet bully it once was than the respected member of the community of nations it claims to be."
How naive can you get?
It is sort of like the US democrats where, you risk money and develope an oil field and the govt. slaps a "windfall" profits tax on you.
It is also similar to "mandating lower drug prices".
The democrats and Putin are birds of a feather.
Russia is nationalizing its most vital infrastructure. China never freed up its oil companies, and both contries are taking over areas vital for defense. Very omnius indeed.
As corrupt as Russia is, I'm not sure why anyone would have wanted to invest their even before Putin's maneuver.
The thing is that Putin is still a hardline Soviet. Sometimes he slips up and says so.
Despite the corruption, Russia's real growth rate is 6.4%, nearly double that of the U.S. Plus, the ING Russia-A Fund is up 61% this year. (A China mutual fund leads all with over 105%.)
Actually, Russia is growing even faster. Now with the nationalization of its oil infrastructure, Russia will grow much faster than before.
When Russia is on the rise, we would be stupid to turn a blind eye. It seems to me the eyes have been foggy enough lately. Time to open them up.
Ah, thanks for making me feel better. Not.
Thanks for the data. I'll restate my point. I wouldn't put assets into Russia without some kind of business loss insurance covering the assets. I remember hearing from a friend who worked on a joint science venture with the Russians. He was a network engineer working for NASA at the time. One of the issues they had was the $100,000+ Cisco router they sent over went down. He called his Russian counterpart to see what the problem was, and the guy said "what router?".
When Yeltsin was in power he negotiated some PSA's Sakhalin 1-3 and Kharyaga which were very favorable terms for the operators and not the Russian government.
Exxon has Sakhalin 1 and lost 3, Shell 2, and Total Khargaya.
Those projects are really big and profitable and the Russians want a bigger share or more attrative terms than what Yeltsin gave them away for in the 80's.
While I dont condone what they have done, it is no worse than Chavez and Morales who kicked alot of companies right out of the country and nationalized their assets.
It is a sign of the times in the oil industry these days.
After living in Norway for 17 years, I can understand it as the Norwegian state felt that they should have control of their natural resources. Gullfaks they have 50% of and the other owners were only Norwegian.
Russia just "seized" Shell oil investment in the Sakhalin Island project. I presume Shell did most of the serious exploration and initial infrastructure. So Russia decided their investment should be reduced from 50% to 25% now that it all looks good. Shell will get some BS compensation after taking so much risk and hard work
they're sounding the alarm. A few years too late, but hey...
they're sounding the alarm. A few years too late, but hey...
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