Friday, October 06, 2006
the customer is always and asshole
gold star if you get the title.
This article as about how the Kremlin is attempting to screw over Shell and ExxonMobil and gain oil hegemony by enforcing environmental regulations on the Sakhalin projects on Sakhalin Island. (Sakhalin is that big long island north of Japan. Russia owns it.) The case is framed by NYT to sound a lot like the sort of selective enforcement that the kremlin performed on Yukos to renationalize energy resources; however, the article treads lightly on the fact that the multinationals have pulled some pretty dodgy moves of thier own including jacking up the production cost estimates which according to the terms of the leases delays the russian government's acquisition of profits significantly as well as raising the percent stake requirements for voting above the 25% stake purchase Gazprom was negotiating only a week before the deal was to be signed. Basically Shell has bait-and-switched the russians twice, and now the russians are pissed and are using questionable environmental enforcement to regain their bargaining leverage. And Greenpeace is playing the dupe to this geopolitical oil conflict by cheering on anyone who puts the screws to the environmental enforcement of oil extraction (as though Gazprom is going to do a better job after russia nationalizes the Sakhalin projects).
This is interesting because it touches on a major trend in world economics which is the nationalizing of western oil projects by populist or anti-western governments. We have seen similar strains of conflict in Nigeria as well as more bald-faced grabs Venezuela and Bolivia. And this argument is far from one sided. The nationalisers are breaking the agreements signed with the multinationals which harms their globalized economies in the long term by breaking trust, but if these incredibly lucrative resources are orders of magnitude more valuable than anything else your country produces, attempting to recoup your only resource seems reasonable. In addition, is the western economic model where large corporations gain favorable extraction leases because smaller gov'ts can't produce the infrastructure and capital outlay to extract it themselves. Oil politics is dirty stuff.
http://www.nytimes.com/2006/10/06/business/worldbusiness/06sakhalin.html?ref=science
This article as about how the Kremlin is attempting to screw over Shell and ExxonMobil and gain oil hegemony by enforcing environmental regulations on the Sakhalin projects on Sakhalin Island. (Sakhalin is that big long island north of Japan. Russia owns it.) The case is framed by NYT to sound a lot like the sort of selective enforcement that the kremlin performed on Yukos to renationalize energy resources; however, the article treads lightly on the fact that the multinationals have pulled some pretty dodgy moves of thier own including jacking up the production cost estimates which according to the terms of the leases delays the russian government's acquisition of profits significantly as well as raising the percent stake requirements for voting above the 25% stake purchase Gazprom was negotiating only a week before the deal was to be signed. Basically Shell has bait-and-switched the russians twice, and now the russians are pissed and are using questionable environmental enforcement to regain their bargaining leverage. And Greenpeace is playing the dupe to this geopolitical oil conflict by cheering on anyone who puts the screws to the environmental enforcement of oil extraction (as though Gazprom is going to do a better job after russia nationalizes the Sakhalin projects).
This is interesting because it touches on a major trend in world economics which is the nationalizing of western oil projects by populist or anti-western governments. We have seen similar strains of conflict in Nigeria as well as more bald-faced grabs Venezuela and Bolivia. And this argument is far from one sided. The nationalisers are breaking the agreements signed with the multinationals which harms their globalized economies in the long term by breaking trust, but if these incredibly lucrative resources are orders of magnitude more valuable than anything else your country produces, attempting to recoup your only resource seems reasonable. In addition, is the western economic model where large corporations gain favorable extraction leases because smaller gov'ts can't produce the infrastructure and capital outlay to extract it themselves. Oil politics is dirty stuff.
http://www.nytimes.com/2006/10/06/business/worldbusiness/06sakhalin.html?ref=science
# posted by 8yearoldsdude @ 5:55 PM 
Comments:
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Chad got the World Bank to finance part of an oil pipeline for it, which the WB agreed to do on the condition that a percentage of revenues from oil be placed in a no-dipping-into-the-till account for future generations. Chad accepted the conditions, got its pipeline, and is now dipping into the till claiming the prerogative of national sovereignty. World Bank suspends loans, but the pipeline still exists. Ugly stuff. --EWK
http://news.bbc.co.uk/2/hi/africa/4604964.stm
http://news.bbc.co.uk/2/hi/africa/4604964.stm
# posted by 
: 8:50 PM
: 8:50 PM
Russia's just trying to screw them in an extremely uncomfortable place.
/like the back of a volkswagon?
//I bet that Shell won't see the schooners coming.
/like the back of a volkswagon?
//I bet that Shell won't see the schooners coming.
Ever read Confessions of an Economic Hitman by John Perkin? It's a great account of the game that multinational corporations play with third-world countries to dominate their major industries.
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# posted by : 3:36 AM
: 3:36 AM << Home
