| Topic: |
Science > Prophecies-Of-Nostradamus |
| User: |
"Foaming at the Mouth Psychotic" |
| Date: |
22 Nov 2005 01:29:54 PM |
| Object: |
Russia: A Secure Future for the Energy Sector |
I presume this is why the US is talking all this democracy ***** in
regards to the Russian oligarchs. They want to see these people
monopolize all of Russia's resources and spend the money on themsleves
instead of the Russian state using them for its strength. Next step
will be formenting ethnic unrest inside Russian ala Yugoslavia in the
1990's.
But the jihadists will want to join in on the fun too. They are already
doing it. EVERY former Soviet Republic on the southern flank is
vulernable.
Russia: A Secure Future for the Energy Sector
November 17, 2005 22 31 GMT
Summary
Recent developments in Russia's energy sector indicate that Moscow is
taking a far more pragmatic approach to economics. These new
developments will push Russia toward a stronger, more secure future in
the energy sector.
Analysis
Gazprom has been busy making deals in the latter half of 2005. First,
the Russian giant purchased nearly 73 percent of the Siberian oil
company Sibneft in September for $13.091 billion. This move guaranteed
Gazprom's continued control of the energy market in Russia and cemented
its position as the world's largest energy company. Gazprom's
acquisition of Sibneft -- which had reserves of nearly 5 billion
barrels of oil equivalent (BOE) in 2004 -- marks a big move for the
energy giant, which itself has proven reserves of 120 billion BOE.
Before the Sibneft deal, Gazprom monopolized natural gas; the purchase
of an oil company allows Gazprom to gain a bigger piece of the energy
market.
Next, Gazprom penned a deal Nov. 14 with KazMunaiGas, the state natural
gas transit company of Kazakhstan. This accord will grant Gazprom
monopoly control over Kazakh, Uzbek and Turkmen natural gas exports. In
short, Gazprom now has ownership of all the natural gas exported from
the region. This deal demonstrates Gazprom's interest in closing off
all non-Gazprom energy options for the region -- making the company
virtually impossible to avoid there. Also, the company's chairman,
Dmitry Medvedev, is in a uniquely influential position; he was
appointed Nov. 14 to the position of deputy prime minister of Russia.
His new role will allow him to exert even more influence in the
dealings of the state-run energy giant.
But more provocative than either of the first two deals is the upcoming
vote in the Russian Duma. According to Valery Yazev, head of the State
Duma committee on energy, transport and communications, the Duma will
vote Nov. 23 on a reform law that will remove the current restrictions
placed on foreign ownership of Gazprom. This potential policy shift is
an about-face from current policies that make Gazprom shares
extraordinarily costly and difficult to acquire. Because the government
will still retain 51 percent of the company, control of Gazprom is not
at stake. Liberalization of the energy giant is long overdue --
Russia's plan has always been to liberalize the sale of 49 percent of
the company in order to raise capital without surrendering too much
control to foreign interests. The market capitalization involved in the
upcoming vote is a long-awaited move toward the end goal of making
Gazprom a leading energy company in the developing world.
The liberalization of Gazprom is the most viable option for the future
of Russian energy because it allows the government to retain control of
the energy sector. Another (likely to be rejected) option is opening
domestic futures trading of Urals crude production and export. Though
the Urals offer the single largest crude grade in the world at almost 9
million barrels per day production, the Urals blend is not used as an
international crude grade benchmark. Russia has taken this fact in
stride because the Urals blend is more useful in controlling prices and
keeping inflation down. Russia limits the export of the Urals blend
during the winter months, when price hikes take effect in the country.
The lack of exports causes a domestic price crash for the blend, which
keeps inflation at bay. The New York Mercantile Exchange announced it
will begin futures trading in Urals blend in London, but opening
futures trading of the Urals blend in Moscow would zap Russia's ability
to capitalize on the market-control benefits of the Urals blend. Thus,
the Gazprom privatization will be the best move for Russia -- all the
benefits of international investment, with none of the responsibilities
of being the international benchmark.
These three scenarios all indicate that Russia is beginning to approach
energy issues with a much more pragmatic cost-benefit analysis.
Russia's interests are becoming key -- and Medvedev is in the perfect
position to influence the decision-making process. The KazMunaiGas deal
and the Gazprom liberalization make clear economic sense for Russia --
one offering total control of Central Asia's gas, the other allowing
for an influx of money without a loss of control. Both of these
decisions further Medvedev's goal to transform Gazprom from a state-run
company to a powerful international arm of the Russian government in
the foreign policy realm. But just as enlightening as these two
decisions are, the refusal of the third option -- future trading of the
Urals blend in Russia -- is just as noteworthy. It indicates that
Russia is not willing to surrender control. The benefits of opening
Urals blend future trading simply do not outweigh the costs of doing
so. Medvedev is interested in the West -- but not in joining it;
rather, he seeks to use the West for Russia's best interests.
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