[parsifal]

Russia needs a strong Ruble if the country hopes to survive. As you all know, Russia has a population decline that is alarming. Putin has to do what is necessary to save his nation. But will it work?

Betting on currency is a risky enterprise.

[max_power29]

$this->bbcode_second_pass_quote('parsifal', 'R')ussia needs a strong Ruble if the country hopes to survive. As you all know, Russia has a population decline that is alarming. Putin has to do what is necessary to save his nation. But will it work?

Betting on currency is a risky enterprise.

[DantesPeak]

And you were worried about Venezuela.

$this->bbcode_second_pass_quote('', 'R')ussia calls to review foreign oil deals

By Arkady Ostrovsky in Mosocw
Published: May 25 2006 13:34 | Last updated: May 25 2006 19:13

Russia’s natural resources ministry called on Thursday for a review of the two largest foreign oil projects in the country, even as senior Russian officials sought to assure EU leaders that Russia was a reliable energy partner.

The ministry said the legal agreements underpinning oil and gas developments on Sakhalin island, on Russia’s eastern flank, were ineffective and should be reviewed.

It said it planned to ask the Duma, Russia’s lower house of parliament, to review production-sharing agreements signed in the 1990s, saying they were damaging Russia’s national interests.

[DantesPeak]

$this->bbcode_second_pass_quote('', 'R')ussia seeks to seize control of Sakhalin
By Andrew Osborn in Moscow
Published: 26 May 2006

Royal Dutch Shell's flagship investment in Russia was facing uncertainty last night after the Natural Resources Ministry threatened to scale back the company's stake in a huge liquefied natural gas project to allow the Kremlin greater control.

The threat concerns the Sakhalin-2 project, the largest direct foreign investment in Russia, and a venture that will result in the world's biggest liquefied natural gas plant in the far east of Russia. Shell has a 55 per cent stake in the $10bn (£5.3bn) project while two Japanese firms own the other two stakes. The Russian government has a revenue-sharing arrangement with the consortium but is known to be keen to get a direct stake in the project as Moscow seeks to bring more strategic energy reserves under the Kremlin's control.

President Vladimir Putin has already urged Shell to honour a promise it apparently made to surrender a 25 per cent stake in the project in exchange for a share of a Siberian gas field.

[mekrob]

Ha, wow. Ok, I have to go now and brush up on my Russian. Can't let my masters think I'm some dope.

[Colorado-Valley]

Japan should probably see the light now and absorb itself into the greater Asian prosperity zone while there's still time.

[lutherquick]

Russia can change it's mind, the contracts have a clause...
Like the ABM treaty, America exsersized her options, so too will Russia...

keep pumping the NGO money into Russia...

idiot Americans...

[MrBill]

$this->bbcode_second_pass_quote('parsifal', 'R')ussia needs a strong Ruble if the country hopes to survive. As you all know, Russia has a population decline that is alarming. Putin has to do what is necessary to save his nation. But will it work?

Betting on currency is a risky enterprise.

[MrBill]

Not so long ago tax collectors in CIS countries were able to blackmail companies into paying under the table bribes to go away as they were aware that 100% compliance with the Russian/Ukraine tax code which was riddled with errors, duplicity and other problems and would ensure that any profitable company that paid all of her taxes would in effect go bankrupt as marginal tax rates exceeded 100%!

So is it with production sharing agreements written back when certain legal rights did not exists or as laws have changed since then and have been back dated.

It is quite easy to re-visit these contracts and tell a company they are in violation of the production sharing agreement because after X number of years they have only brought Y number of leases into production instead of Y + 1. Then the beleaguered company will reply, 'yes, that is true, but because the responsible ministry did not issue us a development permit, so we cannot be held responsible for any delays in bringing leases on line.' 'Not our problem,' will respond the government. 'You are responsible for securing all permits and sticking to the time schedule.'

That is life in emerging markets. Canadian oil sands look better already, eh?

So, it is well known that Gazprom is trying to weedle in on the Sakhalin II project, and the only way they can do that is to take someone's share away. Anyone who wants to play, has to play by the Kremlin's rules, and they are not written down anywhere.

You may remember that BP sued TNK not so many years ago about erasing their name from the company's share registry, stripping BP of their ownership rights? It happened. Now, BP-TNK are partners. Strange bedfellows indeed, but the price of admission to the only game in town. Where else can multi-nationals go? Most countries are now off-limits to them, and they are forced to do the heavy lifting for national oil companies for the crumbs that are left-over. No wonder they cannot replace their reserves? Where?

Only when companies like Pemex fall apart from neglect do governments then invite the multis back in to repair the damage and help them explore for new fields (deepwater in this case). The same will happen with PDVSA, as their output declines even more than Chavez can hide. Maybe Bolivia will even invite Petrobras back once they find out it is easier to expropriate assets than to run them and create value? I know Iran could not find a hole in the desert without help from outsiders, much less get anything out of it? ; - )

[DantesPeak]

Well put Mr. Bill. So when are they going start asking for rubles at my local Lukoil gasoline station?


Sakhalin-2 oil project, Molikpaq offshore platform

$this->bbcode_second_pass_quote('', 'R')ussia’s natural resources ministry called for a review of the two largest foreign oil projects in the country, even as senior officials sought to assure EU leaders that Russia was a reliable energy partner, The Financial Times reported Friday.

The ministry said the legal agreements underpinning oil and gas developments on Sakhalin Island, on Russia’s eastern flank, were ineffective and should be reviewed. It said it planned to ask the State Duma, Russia’s lower house of parliament, to review production-sharing agreements signed in the 1990s, saying they were damaging Russia’s national interests.

[MrBill]

Nevermind what it costs or in which currency you pay for it, so long as it is available and you can afford it! ; - )

Seeing the ruble lost +81% of its value since 1998, and has recently clawed back +/-15% on the back of a massive debt default (+$200 billion) and rising commodity prices (how's that for timing?), I guess I would sooner pay for gasoline in rubles than dollars or euros if I can buy it outside of Russia for the same price as in Russia?

Interesting enough next week I will attend the launch of the information campaign to sell the euro to Cypriots by the Minister of Finance and the Governor of the Central Bank of Cyprus at an event in Nicosia hosted by the President of the Republic of Cyprus.

Too be honest the Cypriot pound is very strong, $2.2250 against the dollar versus $1.8700 for Sterling, and I think it is a mistake to lock-in such a high rate against the euro, approx. 1.7370 euros to the pound. I have not seen much integration of the real economy with that of euroland, and most of the growth seems to be coming from inward investment into real-estate and property development from Russia, the ME, Europe and the UK, and not home grown industry. Since they joined the EU, French and Italian wines are coming in and are very competitively priced, cutting into local sales, for example. All in all, I do not find Cyprus undervalued at all, and really compared to Germany expensive? Maybe 25% over-valued (back of the envelop, I have no data)?

You certainly cannot argue that the central bank is pursuing an inflationary policy. If they join the EMU with a very strong pound it will force industry to become more competitive, and it will be more disinflationary than inflationary for consumers. However, I will be interested to hear what the Directors from the ECB and European Commission have to say next week?

But on one point I am sure, gasoline is still too inexpensive in Cyprus, as all the young guns can still afford to cruise in their 'sports cars' and 'super bikes' up and down the main sea front, and race one another until 04.00 in the morning. And there are no noise laws in Cyprus, which are enforced, so that plus the noise from two stroke 'scooters' is enough to make me wish for the end of oil, so I can get some sleep at night and peace & quiet during the day! ; - )

Cyprus decides to follow Portugal's lead and get its act together after Mr.Bill complains.

[DeadEndDance]

I am not sure how significant this is, but this morning on Russian news there was a piece about Krishtenko's (Russia's Energy Minister) speach at the World Gas Conference in Amsterdam. They had footage of him saying the era of cheap hydrocarbons was over. Having been following Peak Oil for about a year now, it just threw me off that this was being reported in the Russian news. However, it doesn't seem lanybody wants to pick up this story, as the Google News search only brought back 4 stories about this. And they are really weak, as nothing particularly informative is being reported in any of them. Other than the quotes by the Minister.

$this->bbcode_second_pass_quote('', '�')��Forecasting is a thankless task in hydrocarbons, but one can say with certainty that the era of cheap hydrocarbons is over,” Viktor Khristenko told the British Daily Telegraph.

[seahorse2]

DED,

Thanks for the good find. Confirms what appears now to be what is obvious to everyone except the optimist ostriches.

[DantesPeak]

I also noted that Gazprom seeks a stake in some Eurpoean energy companies in exchange for some of its business within Russia.

Also Russia and China announced today a $3 billion deal on Urals oil.


$this->bbcode_second_pass_quote('', 'D')aily Telegraph (UK)
Copyright 2006 The Telegraph Group Limited, London
June 6, 2006

No more cheap fuel, says Russia

By Christopher Hope in Amsterdam

RUSSIA has served a double warning over the price of oil and intervention to block attempts by its energy firms to move into EU markets.

Viktor Khristenko, Russia's energy minister and guardian of 5pc of the world's oil reserves, declared motorists and business would have to learn to live with expensive fuel because "the era of cheap hydrocarbons is over''.

He also made it clear that any intervention by EU states if Russian firms sought to buy their European rivals would be regarded as unfriendly.

He was speaking shortly after the Chancellor, Gordon Brown, indicated that any bid by Gazprom, the Russian gas giant, for Centrica, the British Gas parent, would be treated as a political rather than commercial move.

Russia, with its huge oil and gas reserves, has been one of the main beneficiaries of soaring oil prices and shares the industry consensus that there is little prospect of relief.

Mr Khristenko said: "Forecasting is a thankless task in hydrocarbons, but one can say with certainty that the era of cheap hydrocarbons is over.''

Mr Khristenko, appointed energy minister by President Putin in 2004, said EU governments should stand back from the merger and acquisition activity in the energy sector which is sweeping Europe.

Speaking to The Daily Telegraph yesterday, he said: "The less political issues there are in this area, the easier and calmer it will be for suppliers and consumers and businesses.'' In today's global market, a firm's nationality was increasingly irrelevant, he said. "We have global companies - it can be hard to pinpoint where a company comes from. BP is considered a British company and in America it is an American company. There is nothing contradictory in that because its assets are spread all over the world.''

Russia was intent on "the expansion of our own participation in others' assets''.

He understood the nervousness about Russia's increasing influence - by 2030 nearly two-thirds of the EU's gas needs will come from Russia. "If dependency on Russia is not good then one needs to move out of this dependency,'' he said. "So it is legitimate to encourage Russian participation in other markets like China, Japan and the USA.''

[Concerned]

$this->bbcode_second_pass_quote('DantesPeak', '
')$this->bbcode_second_pass_quote('', 'D')aily Telegraph (UK)
Copyright 2006 The Telegraph Group Limited, London
June 6, 2006



He was speaking shortly after the Chancellor, Gordon Brown, indicated that any bid by Gazprom, the Russian gas giant, for Centrica, the British Gas parent, would be treated as a political rather than commercial move.

[Leanan]

Why, that durn Commie! He's...he's using capitalism/globalization against us!

[grabby]

Its all russkias fault. To lower prices all they have to do is make available 40 milllion barrels a day and only charge 10 dollars a barrel.
They are doing this on purpose to raise prices.

[linlithgowoil]

not again? wasn't the era of cheap oil over last summer?

what era are we now in then? the era of slightly more expensive oil but everyone can afford it so it doesnt matter? looks that way to me.

[DantesPeak]

It has begun.

$this->bbcode_second_pass_quote('', '6')/8/06 Fed. News Serv. 09:15:00
Federal News Service (Russia)
Copyright 2006 Federal News Service, Inc. All Rights Reserved.

June 8, 2006

TV INTERVIEW WITH OLEG SAFONOV, PRESIDENT OF THE RUSSIAN TRADING SYSTEM VESTI PLYUS TV RUSSIA NEWS PROGRAM WITH ERNEST MACKEVICIUS, 00:15, JUNE 8, 2006

Anchor: From now on, the price of Russian oil will not be determined only in New York. Trading in Russian "black gold" begins at the RTS in Moscow on Thursday, and what is , oil will be traded on rubles. The idea was first aired in the Presidential Address to the Federal Assembly. The aim is to strengthen the authority of the Russian ruble and raise the price of Russian oil to the level of foreign oil. How feasible is this task? With me in the studio is President of the Russian Trading System Oleg Safonov.

Good evening, Oleg Petrovich.

Safonov: Good evening.

Anchor: Today's trading is a trial, I understand?

Safonov: No, it is not a trial run, it is a real start of trading in one of the key commodities that is oil, and it is true that from today term contracts for Urals oil will be traded at the Russian Trading System. And payments will be in rubles.

Anchor: In rubles. If everything comes off, will the stock market be created on the basis of your RTS?

Safonov: I do not rule that out.

Anchor: Do you think you will manage to strengthen the ruble and raise the price of the Russian Urals to the level of the West European Brent?

Safonov: As you have noticed, the President's Address set the task of making the ruble freely convertible from July 1. The ruble will be freely convertible if real Russian assets, including key commodities such as oil can be bought for rubles.

I think that the instrument that the Russian Trading System is introducing is a small but real step in that direction.

Anchor: When will the effects really kick in?

Safonov: As of today.

Anchor: No, I mean when will it begin to influence the convertibility of the ruble and the price of our oil?

Safonov: I think as liquidity of this instrument grows, it will have a serious impact in creating conditions for free convertibility of the ruble.

Anchor: How do you expect to attract Russian and foreign companies to the stock exchange?

Safonov: We think that a term contract for Urals oil and gold which we offer to the broadest circle of Russian investors starting from today, as well as to foreign investors, will result in heavy trading in these contracts. And the RTS stock exchange is the site that enables Russian as well as international participants to acquire Russian assets.

Anchor: When can we see a full-fledged stock exchange in Russia to rival those in New York and London?

Safonov: Hopefully, very soon.

Anchor: Let us hope so. Thank you, Oleg Petrovich.