FDIC: You are screwed... Well not quite.

[GRG55]

Re: FDIC: You are screwed... Well not quite.

GRG,

The first episode was the revitalized Russian government under Putin 'renegotiating' previous sweetheart royalty deals.

This latest episode is a power play between the Jewigarchs and their foreign partner. It is partly due to government influence, but not in the way you think: Alfa, the other part of TNK, is being heavily pressured by the government after years of siloviki maneuvering.

Alfa needs a new cash cow.

And my point remains the same... BP should have steered clear of Russia. Especially after their first expensive lesson there.

I used to work for a multinational that got swallowed into BP during Sir John Browne's 1990's acquisition binge. I was no longer with that company when it was taken over, but I had held onto all the common stock I accumulated through my years of employment. I sold every single share into the BP takeover announcement [against the advice of my broker, Wall St and London analyst buy recommendations and finance sector & industry accolades being accorded Browne at the time]. BP would have had a difficult time surviving as a company in any case; I suspect their latest "industrial tourism" side trip to Russia will simply hasten the final outcome.

In any event, none of this would appear encouraging to the Europeans insofar as Russia as a reliable supplier of energy.

[c1ue]

Re: FDIC: You are screwed... Well not quite.

In any event, none of this would appear encouraging to the Europeans insofar as Russia as a reliable supplier of energy.

GRG,

On the oil side, I have to agree. On the natural gas side, on the other hand, I have to disagree.

Russia is hopefully using their oil to reindustrialize the nation, while natural gas will be the mainline income source (plus minerals) hopefully augmenting future value add income.

It is no secret that Russia is pumping fast and doesn't have the putative reserves of say, Saudi Arabia.

As for TNK and BP - since when is Russia the only nation who screws over foreign companies extracting oil on home turf?

Venezuela and Iran both did it and I'm sure there are plenty of other examples.

[GRG55]

Re: FDIC: You are screwed... Well not quite.

GRG,

On the oil side, I have to agree. On the natural gas side, on the other hand, I have to disagree.

Russia is hopefully using their oil to reindustrialize the nation, while natural gas will be the mainline income source (plus minerals) hopefully augmenting future value add income.

It is no secret that Russia is pumping fast and doesn't have the putative reserves of say, Saudi Arabia.

As for TNK and BP - since when is Russia the only nation who screws over foreign companies extracting oil on home turf?

Venezuela and Iran both did it and I'm sure there are plenty of other examples.

I do not recall making any observation that Russia was alone as the only nation behaving in a nationalistic manner regarding its resources. In fact I have for quite some years been expecting nothing less [from Russia and most other nations, in oil and in most other resources], and my investment portfolio continues to benefit from the realization of that expectation.

The fault lies with BP, and European governments, not Russia. Although some here have accused me of being an apologist of Big Oil or OPEC or ..., as best I can I try to simply point out the situation, and more importantly the implications and potential [or IMO likely] consequences.

I am firmly in the camp that every sovereign nation should be free to act in its own best interests, including decisions regarding its own resources. Hopefully "its interests" are aligned with the majority of its citizens [Quite often this is not the case, unfortunately. Only time will tell if this is, or is not the case in present day Russia. We each have our opinions, and I will grant without hesitation that yours is much better informed]. I am also firmly in the camp that every sovereign nation must accept the ultimate consequences of its decisions, including those consequences that result from other nations responding in their best interests.

My view is that there will be significant consequences for Russia, and a goodly number of them are unlikely to be ultimately positive for the Russian people. I hope I am wrong. Because, you see, Venezuela and Iran, by themselves, are inconsequential countries in the grand scheme of things. Russia is not.

[GRG55]

Re: FDIC: You are screwed... Well not quite.

GRG,

On the oil side, I have to agree. On the natural gas side, on the other hand, I have to disagree.

Russia is hopefully using their oil to reindustrialize the nation, while natural gas will be the mainline income source (plus minerals) hopefully augmenting future value add income.

It is no secret that Russia is pumping fast and doesn't have the putative reserves of say, Saudi Arabia.

As for TNK and BP - since when is Russia the only nation who screws over foreign companies extracting oil on home turf?

Venezuela and Iran both did it and I'm sure there are plenty of other examples.

Almost time for the polonium solution?

BP's rivals shift in Russian tussle

Mon Jul 7, 2008 3:41am EDT
By Michael Stott
MOSCOW (Reuters) - The fate of the second biggest foreign investment in Russia hangs in the balance amid signs of a shifting mood in the Kremlin which may have wrong-footed investors and one of the world's biggest oil companies.

Raided by security services, its board paralyzed, key technical experts barred from working and deluged with court cases and labor inspections, TNK-BP is a struggling $38 billion oil company producing as much crude as Britain.

As investors scrutinize the saga to read the runes for future projects in Russia, signs are multiplying that the root of the dispute may not be in the Kremlin but rather the boardrooms of Russian billionaires. Even that is uncertain...

...So when a campaign against TNK-BP suddenly started this year involving tax police, alleged labor code violations, security service sweeps and court cases, many assumed the Kremlin was pressuring the firm to accept a state partner.

A similar barrage of official harassment was unleashed in 2006 against Royal Dutch Shell to force it to sell a controlling stake in its giant Sakhalin gas venture to Russia's state-dominated energy champion Gazprom.

This looked like a replay, but there have been repeated statements from officials, including President Dmitry Medvedev, that the state does not want a stake.

"Something has changed in the past few months... The government has changed. Players have moved around. Power is more dispersed," said a source close to BP, speaking on condition of anonymity like most in this case because of its sensitivity.

Asked what the Kremlin wants out of the affair, one TNK-BP manager shrugged his shoulders: "Nobody knows."...
More...

[c1ue]

Re: FDIC: You are screwed... Well not quite.

GRG,

The article basically just stated what I said earlier.

The name of the game today is pretty straightforward: however your gains were originally gotten - pay your taxes, including some percentage of what you dodged out of all of these years, and you can continue to enjoy your cash cow.

Get stingy, and get stung.

I think Alfa needs a big wad to do their 'even-up' with the Russian government and the shenanigans going on are mostly Alfa NOT doing the 'local cover' they were before as opposed to anything specifically anti-BP.

That's the danger when you rely too much on a local business partner eh?

[GRG55]

Re: FDIC: You are screwed... Well not quite.

GRG,

The article basically just stated what I said earlier.

The name of the game today is pretty straightforward: however your gains were originally gotten - pay your taxes, including some percentage of what you dodged out of all of these years, and you can continue to enjoy your cash cow.

Get stingy, and get stung.

I think Alfa needs a big wad to do their 'even-up' with the Russian government and the shenanigans going on are mostly Alfa NOT doing the 'local cover' they were before as opposed to anything specifically anti-BP.

That's the danger when you rely too much on a local business partner eh?

Yep. Sure does.

Few days ago got an email from a former employee of mine (Texas A&M petroleum engineer), who's spent last 4 years in Moscow with BP. Said they were sending him back to the USA for now since no visa any more. He's being permanently re-assigned along with most of his expat coworkers; just doesn't know where yet.

[tree]

Re: FDIC: You are screwed... Well not quite.

Back to the start of this discussion: FDIC.

From the July 8 business section of the LATimes, on the slashing of jobs at embattled IndyMac:

"The company's IndyMac Bank unit will still accept deposits and pay interest on them, including certificates of deposit. The bank's deposits are insured by the federal government for up to $100,000 per depositor plus $250,000 per retirement account.

Rumors in late June that regulators might move to shut down IndyMac caused a mini-run on the bank by depositors withdrawing funds. Some whose deposits were fully insured were concerned their funds might be tied up for a long time if the bank failed.

Such fears are unfounded, according to the Federal Deposit Insurance Corp. The agency says it nearly always finds another institution to take over deposits without a delay and, if that can't be done, provides checks for insured deposits within one or two business days after a bank failure. The agency's toll-free information line is (877) ASK-FDIC."