Russia-Europe Energy Thread

[roberto]

Posts split From another thread. /GD

Please avoid any Western news-agencies. GWB does not see the world your way. But hay...! :p:

Any comment on the Ukraine's SAM offer to we westerners...?

Russia has won the battle against the Georgians: However they have lost the war. Peace is about compromise: hearts-and-minds...! :cool:
Russia has won both the battle and War.
West economic weakness and dependence does allow it to do anything of practical in nature. All is for public consumption. and as Russia goes richer it will drive further wedge among Western countries.

http://www.washingtonpost.com/wp-dyn/content/article/2008/08/15/AR2008081503097.html
Bush and Rice initially focused on getting a tough declaration from the Group of Seven industrial democracies condemning Russia. But the initial resistance Rice encountered in a conference call with other G-7 foreign ministers shows how hard Bush -- and his successor -- will have to work to rebuild alliance unity on the Kremlin


Now this very desperate. The flip side is Russia already has troops in north of afghanistan and if suddenly it start supporting Tajik/Uzbke invastion of Afghanistan to detach northern/Western part. and forcing NATO to go to South in taliban terrotery will be humiliating defeat for the alliance at hands of irregulars. Russia is not Soviet Union. it has plenty of hard currency to buy friends and foe and change the map of the region. So old tactics wont work.

http://www.washingtonpost.com/wp-dyn/content/article/2008/08/13/AR2008081303365.html
President Bush could cash in on his close personal relationship with Putin by sending him a copy of the highly entertaining (and highly fictionalized) film "Charlie Wilson's War" to remind Vlad of our capacity to make Russia bleed. Putin would need no reminders of the Georgians' capacity and long history of doing likewise to invaders

[Grand Danois]

Just some comments on methodology:

http://en.wikipedia.org/wiki/Conjecture
http://en.wikipedia.org/wiki/Assumption
http://en.wikipedia.org/wiki/Wishful_thinking

...and one on analogies to risk diversification strategies:

http://en.wikipedia.org/wiki/Risk_management

[roberto]

Just some comments on methodology:

http://en.wikipedia.org/wiki/Conjecture
http://en.wikipedia.org/wiki/Assumption
http://en.wikipedia.org/wiki/Wishful_thinking

...and one on analogies to risk diversification strategies:

http://en.wikipedia.org/wiki/Risk_management
All these strategies have already failed as there is no hope of there success in future as Russians have spent entire decade to develop economic system that only benefit them and completely bought of Western CEO. We can start entire thread about it. We have to wait when they are going to spend $300B in on state armament that will built weopon systems that are more effective than anything else out there.



http://www.dw-world.de/dw/article/0,2144,3568763,00.html
Former German chancellor Gerhard Schroeder has accused Georgia of provoking the recent hostilities with Russia by sending troops into South Ossetia and described President Mikheil Saakashvili as a "gambler."

In an interview with German newsmagazine Der Spiegel that was published Saturday, Aug. 16, Schroeder said that the Georgian invasion of South Ossetia was "the moment that initiated the current hostilities."

He declined to comment on whether Russia's response was disproportionate, saying that military conflicts developed their own dynamic.

Schroeder's successor, Chancellor Angela Merkel, Friday described the Russian reaction as "disproportionate in some aspects."

Schroeder said the West had make "serious errors" in its policy toward Russia, and Western views of Russia did not correspond with the reality there

[Grand Danois]

Did it ever occur to you that Germany and France didn't wan't Georgia into NATo because they considered Sakaashvili a loose cannon, and not because of Russian strength/pressure?

You, of course, prefer the latter explanation, because that is how you wish it is.

[Chrom]

Did it ever occur to you that Germany and France didn't wan't Georgia into NATo because they considered Sakaashvili a loose cannon, and not because of Russian strength/pressure?

You, of course, prefer the latter explanation, because that is how you wish it is.

Both. In reality, it is not about Russian pressure. In reality, it is about deep misunderstanding between US and many NATO members. And these NATO members dont want yet more unstable US puppets into NATO. They have enough problems with Poland, Baltic states and some other new members.

This situation slowly, but surely lead to obvious outcome - EU wide security forces/army, which will replace NATO.

Most EU countries feel US have much too much power within NATO. They dont feel what after USSR fall they need US troops for protection, and dont always obliged to bow US wishes. Now, with Iraq (and recently Georgia) we just see tip of iceberg relating to these problems.

[kato]

And let's not forget that the Eastern expansion of NATO isn't necessarily always seen completely positive in Europe.

Especially states that have internal conflicts (like Georgia, but to a limited extent still also Ukraine, and definitely Moldova for example) have the problem that Western Europe now has some - bad - example in the accession of another such nation (Cyprus) to the EU.

[roberto]

Did it ever occur to you that Germany and France didn't wan't Georgia into NATo because they considered Sakaashvili a loose cannon, and not because of Russian strength/pressure?

You, of course, prefer the latter explanation, because that is how you wish it is.
I guess u havent read the whole interview. Schroeder has already given a choice as he already knows that Bankrupt economic system of West do not allow it to stand up Russia.

He urged the European Union to press ahead with plans to forge a "strategic partnership" pact with Moscow, saying Europe risked losing influence and pushing Russia towards China if it did not work with the Kremlin


Whether Georgia enters or not whether Sakaashvili is president or not is irrelevant to the whole context
This thing is about Asia rise. When u have 3B people rising incomes matched with Russian resources/Scientific power/arms and transport routes. ur creating a dangerous mix. I am not even going into Middleast and other parts of the world. West cannot afford Russia on other side since West is completely in debt with falling industrial levels/ outsourcing which is threat to interest rates because of inflation.


http://online.wsj.com/article/SB121859604208935765.html?mod=googlenews_wsj
Russian Steel Firm to Buy John Maneely
By ROBERT GUY MATTHEWS
August 13, 2008; Page B2
In yet another sign of Russia's growing interest in the U.S. steel market, Russian steelmaker Novolipetsk Steel reached a definitive agreement to acquire John Maneely Co., the largest independent tubular-steel manufacturer in the U.S., for $3.53 billion.



http://www.bloomberg.com/apps/news?pid=20601087&sid=aWs8B_j9Hd9E&refer=home

GM Not Seeing Signs of U.S. Recovery, Wagoner Says
The automaker is growing faster than competitors in markets such as Russia and holds a dominant position in most of the fastest- growing regions, he said





Russian Knows that reality very well now. Importance of G8 is entirely due to Russia. so Bush can huff and puff all day. Reality is quite different.

http://en.rian.ru/analysis/20080815/116075172.html

Ousting Russia from the G8 looks like a tough measure, but it is not really. The G8 long ago lost its original essence, and has turned into little more than an expensive talking shop. If it is to regain its relevance its format must be changed. It is strange that Canada is a member of this club, but such huge economies as China, India, or Brazil are not. Nor does it include a single African nation. It has been clear since the end of the past century that this is inadequate. If Russia leaves this club, it will simply cease to exist.

[eaf-f16]

Did it ever occur to you that Germany and France didn't wan't Georgia into NATo because they considered Sakaashvili a loose cannon, and not because of Russian strength/pressure?

You, of course, prefer the latter explanation, because that is how you wish it is.

Everybody knew he was an over-aggressive idiot but that wasn't even their biggest or only obstacle to NATO membership.

NATO doesn't allow countries with territorial disputes to gain membership. To find out why, look at what just happened in Georgia. How was NATO supposed to deal with something like that?

Roberto, you can't quote an op-ed from a pro-Kremlin Russian magazine to prove your point.

[Grand Danois]

And let's not forget that the Eastern expansion of NATO isn't necessarily always seen completely positive in Europe.

Especially states that have internal conflicts (like Georgia, but to a limited extent still also Ukraine, and definitely Moldova for example) have the problem that Western Europe now has some - bad - example in the accession of another such nation (Cyprus) to the EU.

It was not a good idea to accept Cyrpus. Not without having the dispute solved first.

[Grand Danois]

Both. In reality, it is not about Russian pressure. In reality, it is about deep misunderstanding between US and many NATO members. And these NATO members dont want yet more unstable US puppets into NATO. They have enough problems with Poland, Baltic states and some other new members.

This situation slowly, but surely lead to obvious outcome - EU wide security forces/army, which will replace NATO.

Most EU countries feel US have much too much power within NATO. They dont feel what after USSR fall they need US troops for protection, and dont always obliged to bow US wishes. Now, with Iraq (and recently Georgia) we just see tip of iceberg relating to these problems.

I'd rather say that France and Germany consider the EU-Russian relationship to be symbiotic, which is why they do not want it to be fooled with.

The Poles and Balts have had some surreal (but minor) issues with the Russians. The Poles' behaviour inside EU have been awkard to begin with, but they learning it is a two-way street.

But it's wrong of the Americans to think NATO is a direct extension of US foreign policy. This is a specialty of the Bush admin. Will be interesting to see where the next admin will take it.

[Grand Danois]

Roberto, you are peppering this site with disconnected material. It is the behaviour of a troll.

[Grand Danois]

Everybody knew he was an over-aggressive idiot but that wasn't even their biggest or only obstacle to NATO membership.

NATO doesn't allow countries with territorial disputes to gain membership. To find out why, look at what just happened in Georgia. How was NATO supposed to deal with something like that?

Yes, and Georgia in particular was no place to take a confrontation like that if it had to be.

[roberto]

Roberto, you are peppering this site with disconnected material. It is the behaviour of a troll.
I have already mentioned that we can start some thread on that issue. As u cannot easily separate economic issues from Military. It is the economic issues that cause various states to behave in particular way for given conflict.

[contedicavour]

I'd rather say that France and Germany consider the EU-Russian relationship to be symbiotic, which is why they do not want it to be fooled with.

The Poles and Balts have had some surreal (but minor) issues with the Russians. The Poles' behaviour inside EU have been awkard to begin with, but they learning it is a two-way street.

But it's wrong of the Americans to think NATO is a direct extension of US foreign policy. This is a specialty of the Bush admin. Will be interesting to see where the next admin will take it.

Very good point. Already reading the Herald Tribune on Thursday one could see that Obama was trying to act neutral (out of determined thinking or out of ignorance - depending on what political side you are on I guess...) while McCain was strongly protesting. In such testing times it is clear the US needs a firm and mature leadership to leverage the US' strength while obvious using a lot of moderation.

cheers

[kato]

I guess u havent read the whole interview. Schroeder has already given a choice as he already knows that Bankrupt economic system of West do not allow it to stand up Russia.

Umm, the full interview is only in the print issue of Spiegel. Which will be released next Monday.

the western media automatically sided with the aggressors (Georgia).
Nah, that really depends on the country. German media has been pretty critical of Georgia, even extremely conservative (pro-US) media such as FAZ and the Springer press - which has actually (positively) quoted Shevardnaze, Putin and Gorbachev in blaming Georgia in full, and has brought out (relatively pro-Russian) analysts such as Scholl-Latour on the war.

[Chrom]

Umm, the full interview is only in the print issue of Spiegel. Which will be released next Monday.


Nah, that really depends on the country. German media has been pretty critical of Georgia, even extremely conservative (pro-US) media such as FAZ and the Springer press - which has actually (positively) quoted Shevardnaze, Putin and Gorbachev in blaming Georgia in full, and has brought out (relatively pro-Russian) analysts such as Scholl-Latour on the war.

Yes, German medians were surprisingly neutral, presenting both sides view and critical to both. This, however paradoxical, proves one thing:

There is no independent medias in the world ;( Each of them serve national elite interests. German interest right now require to be friendly with Russia - and they media behavior reflect that. Other countries same case - extremely unfriendly and biased in US, friendly and somewhat biased toward Russia in say China.

[roberto]

Some people may have misread my geo-political point that Russia may have lost the war. Here is a comment from this week's The Economist:

The change of scene should not, in retrospect, be surprising. Unlike Abkhazia, which is separated from the rest of Georgia by a buffer zone, South Ossetia is a tiny patchwork of villages—Georgian and South Ossetian—which was much easier to drag into a war. It is headed by a thuggish former Soviet official, Eduard Kokoity, and run by the Russian security services. It lives off smuggling and Russian money. As Yulia Latynina, a Russian journalist, puts it, “South Ossetia is a joint venture between KGB generals and an Ossetian gangster, who jointly utilise the money disbursed by Moscow for fighting with Georgia.”

Source: http://www.economist.com/world/europe/displaystory.cfm?story_id=11920992

Please read the full document. The diversity of sources used - many quoted - could be one of the more intriguing analysis [sp?] of the current conflict. This paper also predicted the collapse of the Warsaw Pact many years before anyone else...! :D
u dont need Economist to predict collapse of communism. Chinese left it in 1970s. Soviets did it in late 80s. Atleast these two were honest that there economic system is not working. Cut in military spending for research was since early 80s. Read Oleg Damchenko President of IrKut & Chief Designer of Yak at www.russiatoday.ru under spot light program.
Now the problem is West and its debt/ economic dependency that is cause of concern. Just switiching by OPEC of reserve currency of Oil will change the world upside down. and this thing is happening at accelerated pace by depegging. St Petersburg Oil exchange has just started. Economist should be concentrated on these issues instead of wasting time on Georgia.

[Grand Danois]

You approach national economics as if was it household economy. That's where you go wrong. Russia only provide a fraction of energy consumption of the West (or Europe).

[roberto]

You approach national economics as if was it household economy. That's where you go wrong. Russia only provide a fraction of energy consumption of the West (or Europe).
It certainly is not fractional. 50% of EU gas imports is from Russia in 2008. and Russia has cooperative agreements with libya/Algeria. So there EU will have to deal with Russian companies. And dont forget Nuclear fuel cycle for EU/US reactors. Now imagine if China succeeds in its 100 Nuclear reactor goal. or Russia builds its own 30 new reactors. It will create severv pressure on thos EU markets. sooner or later that time is coming when Russia issue Either with us or against us ultimatum to EU. This thing is going the same way as China-Taiwan when most of World abandon Taiwan due to China economic power. Russia is exactly copying that strategy but on much grander scale.



http://www.neurope.eu/view_news.php?id=80428
Russia is the basic supplier of raw materials for the Ukrainian atomic power stations. It is remarkable that Ukraine is dependant on Russia in the nuclear sector, much more than in the hydrocarbons. Russia delivers 100 percent of the fuel for Ukrainian atomic power stations, delivered by Russian corporation TVEL

[Grand Danois]

It certainly is not fractional. 50% of EU gas imports is from Russia in 2008. and Russia has cooperative agreements with libya/Algeria. So there EU will have to deal with Russian companies. And dont forget Nuclear fuel cycle for EU/US reactors. Now imagine if China succeeds in its 100 Nuclear reactor goal. or Russia builds its own 30 new reactors. It will create severv pressure on thos EU markets. sooner or later that time is coming when Russia issue Either with us or against us ultimatum to EU. This thing is going the same way as China-Taiwan when most of World abandon Taiwan due to China economic power. Russia is exactly copying that strategy but on much grander scale.

But 27% of gas consumption - the figure that matters. And it is only in the gas sector the fraction is that high.

The rest is conjecture, based on selective material and limited knowledge of the mechanism of the real world. Particular when it comes to nuclear fuels - your prev contribution on that subject wouldn't even stand a superficial review.

[roberto]

But 27% of gas consumption - the figure that matters. And it is only in the gas sector the fraction is that high.

The rest is conjecture.
How is that conjecture? Russia went for exactly same reason to Libya/Algera just like CA gas as u have to deal with One Russia not with 10 gas exporting countries.


http://www.thenational.ae/article/20080726/BUSINESS/926884913/1137
In June, Gazprom opened an office in Algeria — its first in Africa — to forge closer ties with Sonatrach.
Sonatrach supplies about 13 per cent of Europe’s gas consumption, compared with 25 per cent supplied by Gazprom




http://www.ruvr.ru/main.php?lng=eng&q=29941&cid=61&p=21.07.2008
The Russian Corporation TVEL has beaten the American Westinghouse in a tender for the supply of nuclear fuel to Mohovze and Bogunitse nuclear power plants in Slovakia
TVEL, which accounts for 17 percent of global nuclear fuel production, is going on to develop the production of fuel for Pressurized Water Reactors, which are cooled by a mixture of water and steam. Mikhail Rimarev has this to say:

[kato]

Plus around 20-30% of Russian gas production companies are EU-owned anyway, primarily German; often in intercontinental mutual joint ventures.

Uranium? Two-thirds the uranium on the market currently (!) stems from Australia, Kasachstan, Canada and South Africa. The other third is Niger, Russia, Namibia and a number of other "small" producers. Actually, Germany gets rid of its unwanted nuclear items such as UF6 in Russia to some extent.

TVEL and a number other companies primarily act as resellers. Same thing for Arewa in France really, or Urenco in Germany.

[roberto]

Plus around 20-30% of Russian gas production companies are EU-owned anyway, primarily German; often in intercontinental mutual joint ventures.

Uranium? Two-thirds the uranium on the market currently (!) stems from Australia, Kasachstan, Canada and South Africa. The other third is Niger, Russia, Namibia and a number of other "small" producers. Actually, Germany gets rid of its unwanted nuclear items such as UF6 in Russia to some extent.

TVEL and a number other companies primarily act as resellers. Same thing for Arewa in France really, or Urenco in Germany.
Uranium mines in Kazakistan is now Russian project. First strategy of Russia is to control natural resources in near board. Than go to Africa and than Latin America.
Australlia will mostly deal with rising demand in China/India/East Asia. EU has to deal with Russia. there is no other way around. There are several fundamental factors behind them.


http://www.africaintelligence.com/C/modules/login/detailart/LoginDetailArt.asp?lang=ang&service=art&comment=&context=his&doc_i_id=40135182
AFRICA MINING INTELLIGENCE - 09/04/2008
NAMIBIA
Russia Advances on Uranium Deal
A year after the plan for a Russian joint venture to explore for uranium and extract it in Namibia was first sketched out (AMI N°151), Moscow has confirmed and reworked the conditions for its intervention in the country.






http://www.mineweb.com/mineweb/view/mineweb/en/page38?oid=58238&sn=Detail
Russia's ARMZ has new uranium reach
Russian state uranium miner now no.2 in control of world uranium resources.

[Grand Danois]

Uranium mines in Kazakistan is now Russian project. First strategy of Russia is to control natural resources in near board. Than go to Africa and than Latin America.
Australlia will mostly deal with rising demand in China/India/East Asia. EU has to deal with Russia. there is no other way around. There are several fundamental factors behind them.

Fundamental factors?

roberto thinks it is too costly to ship Uranium from Australia (or Canada/Africa/etc.).

He also thinks that Chinese contracts with Aust is the same as excluding other contracts.

:rolleyes:

[ASFC]

No your Nuclear Fuel Argument dos not stand up roberto. TVEL exports to Czech Republic, Slovakia, Bulgaria, Hungary, Ukraine, Armenia, Lithuania, Finland and China which accounts for 17% of world Nuclear Fuel production.

But does not export to either France, Britain, Germany, USA or Japan*, and US is the worlds largest producer of Nuclear Energy, France the largest user (as a percentage of national demand), and the US, France and Japan combined provide over 50% of Nuclear power produced (see here (http://www.iea.org/textbase/nppdf/free/2007/key_stats_2007.pdf)). Given that only roughly 6% of the worlds energy comes from Nuke Power (see the same IEA report I have linked), the idea that Russia can control Nuclear powered energy when TVEL supplies less than 20% of the Nuclear Output is laughable.

And it is not as if TVEL are winning these contracts you keep linking because they are the only supplier and can therefore dictate terms and use these contracts for political leverage, are they?

Anyway this is getting miles off topic away from Georgia.

*which suggests if Russia did play energy hardball and cut of Uranium supplies those countries (the largest producers of Nuke Power) will shrug and keep going to their existing (non-Russian) suppliers.

[roberto]

No your Nuclear Fuel Argument dos not stand up roberto. TVEL exports to Czech Republic, Slovakia, Bulgaria, Hungary, Ukraine, Armenia, Lithuania, Finland and China which accounts for 17% of world Nuclear Fuel production.

But does not export to either France, Britain, Germany, USA or Japan*, and US is the worlds largest producer of Nuclear Energy, France the largest user (as a percentage of national demand), and the US, France and Japan combined provide over 50% of Nuclear power produced (see here (http://www.iea.org/textbase/nppdf/free/2007/key_stats_2007.pdf)). Given that only roughly 6% of the worlds energy comes from Nuke Power (see the same IEA report I have linked), the idea that Russia can control Nuclear powered energy when TVEL supplies less than 20% of the Nuclear Output is laughable.

And it is not as if TVEL are winning these contracts you keep linking because they are the only supplier and can therefore dictate terms and use these contracts for political leverage, are they?

Anyway this is getting miles off topic away from Georgia.

*which suggests if Russia did play energy hardball and cut of Uranium supplies those countries (the largest producers of Nuke Power) will shrug and keep going to their existing (non-Russian) suppliers.
why forget India/Iran from the mix. The point is China alone is making so many reactors that there will be no other way around of Russia nuclear fuel cycle.
they just sold $1b of large scale uranium technology to China. This same thing happened to Oil/Gas sector. Russia economic strategy is to create monoply over Globalization. In Globalization only the highest cash bidder can take the stuff.(read foreign currency assets)


http://eng.globalaffairs.ru/news/31.html
The state-owned Tvel group and the Nuclear Power Corporation of India have signed a contract worth USD 400 million for fuel deliveries to the planned facility in Kudankulam in southern India. Under this deal Russia is to deliver nuclear fuel to India by 2010. It also includes the development and management of the two nuclear reactors

[ASFC]

why forget India/Iran from the mix. The point is China alone is making so many reactors that there will be no other way around of Russia nuclear fuel cycle.
they just sold $1b of large scale uranium technology to China. This same thing happened to Oil/Gas sector. Russia economic strategy is to create monoply over Globalization. In Globalization only the highest cash bidder can take the stuff.(read foreign currency assets)

I think you are missing the point-Russia has no control over Nuclear Fuel, because only 6% of the Worlds Energy demands is met by Nuclear Fuel of which only 17% of that 6% is supplied by Russia. Even then that is to none of the big three in Nuclear Power producers (US, France, Japan) and to none of the western European countries. You have missed the fact that Western Countries (the traditional West, not Eastern Europe) doesn't need Russian Uranium at all to continue Nuclear Power production. And who cares if Russia does control the Chinese market? China uses all its power for domestic use and still has more coal fired power stations than it will have nuclear ones.

And again Nuclear Power has absolutely nothing to do with the South Ossetian War, unlike Oil and Gas Russia does not have a market share in Major Western Countries with Nuclear Fuel.

[roberto]

I think you are missing the point-Russia has no control over Nuclear Fuel, because only 6% of the Worlds Energy demands is met by Nuclear Fuel of which only 17% of that 6% is supplied by Russia. Even then that is to none of the big three in Nuclear Power producers (US, France, Japan) and to none of the western European countries. You have missed the fact that Western Countries (the traditional West, not Eastern Europe) doesn't need Russian Uranium at all to continue Nuclear Power production. And who cares if Russia does control the Chinese market? China uses all its power for domestic use and still has more coal fired power stations than it will have nuclear ones.

And again Nuclear Power has absolutely nothing to do with the South Ossetian War, unlike Oil and Gas Russia does not have a market share in Major Western Countries with Nuclear Fuel.
China has $2T in hard cash. They are going to built over 100 reactors and compelete with transfer of technology from Areva/Westinghouse/rosatom etc
This will increase Russia leverage with EU countries in Nuclear fuel cycle. as those China suck up fuel from other sources. the same happened to Semiconductors as EU fabs close down and equipment shipped to Russia. U r not fully comprehending the effect of globalization where every one is taking from same pot. Easter EU is importan as new industries shift from West to East for proximity. they will need for supply of energy not to mention rising incomes use more energy by definition. Globlization is not in West interest and Russia fully knows it to exploit it. EU weak economic and diplomatic postion is obvious from Kosvo issue as only 43 countries recognize it. . just look at how many countries in world out of 200 came out practically against Russia on Georgia. It is that bankrupt economic system that is based on public bluster but nothing for practice.
The more u wait the more Russia becomes powerful and less leverage EU had.


http://www.iht.com/articles/2008/08/17/europe/nato.php
On Sunday, Merkel said she held to her view that it is too early to implement the Membership Action Plan for Georgia and Ukraine, even though Washington would like to accelerate it for both of them.
Her foreign minister, Frank-Walter Steinmeyer, a Social Democrat and close aide to Schröder, is considered very friendly toward Moscow. In an interview published Sunday, he urged the West against "knee-jerk reaction" like suspending EU-Russia talks on strategic cooperation or banning Russia from the World Trade Organization

[Grand Danois]

Two quick references on what it means to be a primary sector economy.

Russian Oil Output May Fall for First Time in Decade in 2008

By Greg Walters

March 27 (Bloomberg) -- Russian oil output may fall this year for the first time in a decade as the world's second-biggest supplier struggles with rising costs and harder-to-reach fields, Natural Resources Minister Yuri Trutnev said.

``Two years ago, we said the growth rate was falling, and we said this was bad for Russia, remember?'' Trutnev said in televised remarks after a government meeting in Moscow today. ``Now we're saying the production rate is falling this year. This is not a bogeyman, unfortunately, this is real,'' Trutnev said, without giving a specific forecast.

A decline would end a 10-year, 58 percent surge in production, which fell to 6.2 million barrels a day in 1998, when prices dipped below $10 a barrel and Russia defaulted on about $40 billion of domestic debt and devalued the ruble.

Trutnev's outlook contradicts that of the Energy Ministry, which expects an increase of 1.8 percent to 10 million barrels a day of crude and gas condensate, or about 11 percent of world consumption. The International Energy Agency, an adviser to 27 industrialized nations, expects demand to rise 2 percent this year to 87.54 million barrels a day.

Investment bank Credit Suisse Group today joined Moscow- based UralSib Financial Corp. in forecasting an annual decline in Russian production after output slid in January and February.

`Difficult Start'

``The difficult start to the year indicated that the situation in the Russian oil sector is perhaps much more challenging than major integrated oil companies believed at the end of last year,'' Credit Suisse analysts Vadim Mitroshin and Lev Snykov wrote in a note to clients today.

Output fell 0.7 percent in January and 0.9 percent in February, to 9.79 million barrels a day, compared with the same months last year, according to Energy Ministry data. Saudi Arabia is the world's biggest producer of crude oil.

Zurich-based Credit Suisse said it now expects output to fall 0.5 percent, after earlier predicting a 0.7 percent rise.

``National production has reached a plateau and onshore production appears to be in decline,'' said Ronald Smith, chief strategist at Alfa Bank, by phone in Moscow today.

Smith and UralSib's Chris Weafer are among analysts predicting the government will be forced to cut taxes on the industry, its biggest source of income, to revive production. Finance Minister Alexei Kudrin this week proposed cutting extraction taxes by 100 billion rubles ($4.2 billion) a year to help finance exploration and development.

``We consider it very likely that the government will introduce a series of tax breaks this year to boost upstream spending,'' Weafer said in a report on Feb. 6. ``The state will not want to see production go into a declining phase.''

Rosneft Chief Executive Officer Sergei Bogdanchikov called the current tax system ``too harsh'' in August. Export, extraction and other taxes must be cut or companies won't have any incentive to develop new fields, including in the Arctic, OAO Gazprom Neft CEO Alexander Dyukov said on Feb. 4.

To contact the reporter on this story: Greg Walters in Moscow gwalters1@bloomberg.net
Last Updated: March 27, 2008 09:29 EDT
http://www.bloomberg.com/apps/news?pid=20601072&sid=arXTpOY4omL4&refer=energy

In short, the West is unwilling to invest their technology to increase Russian oil production.

Next on what it means when export income is injected into an economy which cannot absorb it; inflation is not followed by an increase in productivity and competitiveness falls.

Analysis: Russian budget suffers corrosive effects of inflation

By Matt Smith

11 August 2008

Soaring oil prices have enriched Russia and seemingly allowed the Kremlin to raise defence spending to a post-Cold War high, with official expenditure on course to break RUR1 trillion (USD42 billion) in 2009.

But dig below the surface of the official figures and it quickly becomes apparent that this spending bonanza is far from the full story. In fact, Russia's inability to control its oil and credit-fuelled inflationary problems has seen defence spending growth falter in real terms.

Comparing Russia's inflation-adjusted defence budget growth to nominal figures demonstrates the problem. From the accession of Vladimir Putin as president in 2000, the budget increased substantially in real terms from RUR201 billion to RUR322 billion in 2006, marking a rise of 60 per cent, but since then growth has slowed. 2006 was in fact the peak year and real-terms budgets are not programmed to exceed it again until 2010 at the earliest.

This is primarily because high levels of inflation in the Russian economy have eroded the real-terms buying power of the Ministry of Defence (MoD). According to GDP inflation data published by the International Monetary Fund (IMF), the Russian government has been consistently unable to control price rises in recent years.

Although 2004 and 2005 saw the highest inflation with rates of 20 per cent annually, since 2004 energy prices have soared even further, enriching Russia, but at the same time further feeding inflationary pressures. This resulted in annual GDP inflation of 17.5 per cent in 2006 and 13.5 per cent in 2007. By the end of 2008, the IMF estimates inflation will have risen again to more than 16.5 per cent. This is substantially higher than CPI inflation reported by the OECD, which peaked in 2001 and currently sits at about 10 per cent.

http://www.janes.com/news/defence/triservice/jdi/jdi080811_1_n.shtml

[roberto]

Two quick references on what it means to be a primary sector economy.



In short, the West is unwilling to invest their technology to increase Russian oil production.
Again ur miss interpreting the actual situation. Russian gov simply does not want to increase production too fast so there is heavy taxation and discourgement of foreign investment which will lead to lower prices. its better to have natural resources in ground for future higher prices as Rest of World gets richer than charge much higher prices.

Next on what it means when export income is injected into an economy which cannot absorb it; inflation is not followed by an increase in productivity and competitiveness falls.
Russian inflation is accompanied by Wage growth which translate into high standard of living. Inflation measurement is differeent as in West they strip out non-core inflation and all kind of statistics manipulation.
It is real gdp growth of 8%. so with inflation. Nominal GDP growth is some where in 25% region. and Oil and Gas has no bearing on GDP growth.

http://www.rbcnews.com/free/20080721165149.shtml
RBC, 21.07.2008, Moscow 16:51:49.Russia's GDP growth amounted to 8 percent in the first half of 2008 compared to the same period of the previous year, Deputy Economy Minister Andrei Klepach said today,

[Grand Danois]

Again ur miss interpreting the actual situation. Russian gov simply does not want to increase production too fast so there is heavy taxation and discourgement of foreign investment which will lead to lower prices. its better to have natural resources in ground for future higher prices as Rest of World gets richer than charge much higher prices.

Errr it's shrinking not "growing at a slower pace". Fact is that few new fields are being developed and existing fields cannot fully be exploited due to old technology (and when a well is is pumped using old tech, it is very hard to imeplement the new afterwards - a high percentage of the oil stays in the reservoir rock.

Could you present some credible source that Russia does not want to modernise its oil sector in order to keep prices high? Particularly that it does not want to get as much oil as possible from the existing wells?

Russian inflation is accompanied by Wage growth which translate into high standard of living. Inflation measurement is differeent as in West they strip out non-core inflation and all kind of statistics manipulation.
It is real gdp growth of 8%. so with inflation. Nominal GDP growth is some where in 25% region. and Oil and Gas has no bearing on GDP growth.

I wasn't adressing Russian standard of living or growth. You missed the point. The increase in Russian GDP is primarily from the primary sector (increase in oil price) and is not followed by a similar increased productivity in the other sectors. It's the structure of the Russian economy.

[kato]

Quite a number of these undeveloped fields are owned by European companies in fact - BP and Shell in particular.
Gazprom and other Russian companies basically buy into these and shift them around to certain levels in order to develop them; however, often, such undertakings, both for development of the fields themselves and for the necessary infrastructure including pipelines or port facilities, only "take off" after considerable (20-40%) contribution from outside energy or oil-consuming companies such as E.On, BASF, Mitsubishi, ***.

Old technology is more the case in a number of countries for which Russia is essentially the transiter/reseller, such as Kazakhstan or Azerbaijan.

[Grand Danois]

Quite a number of these undeveloped fields are owned by European companies in fact - BP and Shell in particular.
Gazprom and other Russian companies basically buy into these and shift them around to certain levels in order to develop them; however, often, such undertakings, both for development of the fields themselves and for the necessary infrastructure including pipelines or port facilities, only "take off" after considerable (20-40%) contribution from outside energy or oil-consuming companies such as E.On, BASF, Mitsubishi, ***.

Old technology is more the case in a number of countries for which Russia is essentially the transiter/reseller, such as Kazakhstan or Azerbaijan.

But nonetheless output is falling. The issue is that many of the Russian oil fields are not being used efficiently, e.g. too much of the potential reserves get stuck permantly underground, meaning that effectively their reserves are smaller than they would have been if drilled and pumped like it is done in the West.

[roberto]

Errr it's shrinking not "growing at a slower pace". Fact is that few new fields are being developed and existing fields cannot fully be exploited due to old technology (and when a well is is pumped using old tech, it is very hard to imeplement the new afterwards - a high percentage of the oil stays in the reservoir rock.

Could you present some credible source that Russia does not want to modernise its oil sector in order to keep prices high? Particularly that it does not want to get as much oil as possible from the existing wells?
Why u need credible sources for stating the obvious. for every dollar of Oil price above $27. 90% goes to Taxes. nothing left for profits that Oil companies can reinvest for increasing production. it seems Russian gov does not believe in production. thats why Russian Oil/Gas companies evaluation is so low compared to Exon Mobile or Sinopec of China. Russian companies have more licenses to develop oil and gas in Libya/Venzuela/Iran/UAE/Saudi than all the Western/Chinese/Japanese companies combined. But they have limited manpower to do every thing. they dont even need to develop there own fields.



I wasn't adressing Russian standard of living or growth. You missed the point. The increase in Russian GDP is primarily from the primary sector (increase in oil price) and is not followed by a similar increased productivity in the other sectors. It's the structure of the Russian economy.
ur missing the point there is no particular investment in Oil and Gas sector so hardly GDP is growing due that. it is growing because of increasineg trade and full autmoation of industries with with China/SK/Japan\Taiwanese. All Central Asia/Middleast etc. those days of dependency on forign investment are over. They can pick and chose now. Western analyst mostly missed that point.

[Grand Danois]

Why u need credible sources for stating the obvious. for every dollar of Oil price above $27. 90% goes to Taxes. nothing left for profits that Oil companies can reinvest for increasing production. it seems Russian gov does not believe in production. thats why Russian Oil/Gas companies evaluation is so low compared to Exon Mobile or Sinopec of China. Russian companies have more licenses to develop oil and gas in Libya/Venzuela/Iran/UAE/Saudi than all the Western/Chinese/Japanese companies combined. But they have limited manpower to do every thing. they dont even need to develop there own fields.

Extraordinary claims need extraordinary evidence. Currently Russian output is falling and prices are going down. If such conditions prevail, Russia loses money. In order to implement such a strategy a vast array of nations need to agree on it. They don't. Oil nations put out as much as they can in order to cash in.

As such, it is very improbable that such a strategy is pursued.

ur missing the point there is no particular investment in Oil and Gas sector so hardly GDP is growing due that. it is growing because of increasineg trade and full autmoation of industries with with China/SK/JapanTaiwanese. All Central Asia/Middleast etc. those days of dependency on forign investment are over. They can pick and chose now. Western analyst mostly missed that point.

GDP is growing because of the value of exports. ;) Competitiveness is lost due to internal inflation. If, say a SU-30 for export costs 30 mn USD today, it will cost 40 mn USD for the importing nation in three years time - if going by the lower OECD internal inflation number.

[roberto]

Extraordinary claims need extraordinary evidence. Currently Russian output is falling and prices are going down. If such conditions prevail, Russia loses money. In order to implement such a strategy a vast array of nations need to agree on it. They don't. Oil nations put out as much as they can in order to cash in.

As such, it is very improbable that such a strategy is pursued.
Production fall one percent but price of Oil/Gas jumps 50% in one year. i am not even going into profits in foreign contracts. this simply math. it is good to have 10% cut in production for 50% more jump in price as 50% is bigger base of the previous bigger price increase. Russian already know West is in economic depression no need to over supply them with cheap energy.



GDP is growing because of the value of exports. ;) Competitiveness is lost. If, say a SU-30 for export costs 30 mn USD today, it will cost 40 mn USD for the importing nation in three years time - if going by the lower OECD internal inflation number.

Look at this statement. In 90s. Almost 100% of conventional military production went to Exports but now exports hardly matters more than 20 to 25%. and still they are making record in value. It is due increase in automation with less labor force.





Moscow (RIA Novosti) Aug 13, 2008

Russia's military exports will exceed $8.5 billion in 2008, a senior government official said on Tuesday. Russia has doubled annual arms exports since 2000 to $7 billion last year, becoming the world's second-largest exporter of conventional arms after the United States.
Military exports "are planned at $8.5 billion this year [2008], and I think we will fully meet the plan, and even exceed it," Mikhail Dmitriyev, head of the Federal Service for Military-Technical Cooperation, told a RIA Novosti news conference.

Russia exports weapons to about 80 countries. Among key buyers of Russian-made weaponry are China, India, Algeria, Venezuela, Iran, Malaysia and Serbia.

"Our foreign customers are queuing up for new Russian-made weaponry," Dmitriyev said. "Among our main 10-15 customers are China, India, almost all Middle East countries, Algeria, Morocco and Venezuela."

The most popular types of weaponry bought from Russia are Sukhoi and MiG fighters, air defense systems, helicopters, main battle tanks, armored personnel carriers and infantry fighting vehicles.

Russia also maintains traditionally strong positions in sales of small arms, and anti-tank and air-defense missile systems.

Dmitriyev said Russia's defense companies were overloaded with orders and urgently needed to increase capacity to meet existing orders and ensure future growth in national arms exports.

"I think our defense industry can handle this situation," he said.

[Grand Danois]

Production fall one percent but price of Oil/Gas jumps 50% in one year. i am not even going into profits in foreign contracts. this simply math. it is good to have 10% cut in production for 50% more jump in price as 50% is bigger base of the previous bigger price increase. Russian already know West is in economic depression no need to over supply them with cheap energy.

Nice as a lab experiment but not applicable to the real world. Russian output is diminishing as percentage of world production. On top of that, the reserves get locked in the ground - even less money.

Look at this statement. In 90s. Almost 100% of conventional military production went to Exports but now exports hardly matters more than 20 to 25%. and still they are making record in value. It is due increase in automation with less labor force.

And if you read the jane's piece, inflation is hollowing the defence budget out, and it is in PPP terms falling. The Russian defence budget is affected the same way as export customers. Will those customer continue to place orders when prices double? And the same goes for the rest of the export economy.

[roberto]

Nice as a lab experiment but not applicable to the real world. Russian output is diminishing as percentage of world production. On top of that, the reserves get locked in the ground - even less money.
Energy is not semi conductors that if u produce more u will get more money. the lesser the better is for higher price. 1 to 2% hardly matters in year time. What matter is average price of energy per year and that is 50% higher in 2008 than 2007 and u cannot challenge that fact. It is better to produce in sands of north Africa or Central Asia that have low expoloration cost for low price environment.



And if you read the jane's piece, inflation is hollowing the defence budget out, and it is in PPP terms falling. The Russian defence budget is affected the same way as export customers. Will those customer continue to place orders when prices double? And the same goes for the rest of the export economy.
Increasing automation is making them to produce far sophisitcated weapons at lower pirce. Su-30MK is still produced at lower price in Russia than in India despite very high labor cost in Russia. (remember they use Siemens work colloboration system at Irkut)
Same is true for Tanks etc. West cannot stop automation of Russian defence firms.
And inflation is eating also the competitors more than Russian defence firms as it can get materials at below market price from state controlled monopolies. u can see all this new Mitsubishi industrial machinery from 2008. So EU is not source of technology when there are others selling every thing to get out of there own economic depression.
http://www.npo-saturn.ru/!new/?pid=78

[Grand Danois]

Energy is not semi conductors that if u produce more u will get more money. the lesser the better is for higher price. 1 to 2% hardly matters in year time. What matter is average price of energy per year and that is 50% higher in 2008 than 2007 and u cannot challenge that fact. It is better to produce in sands of north Africa or Central Asia that have low expoloration cost for low price environment.

I'm talking about oil not semiconductors.

Increasing automation is making them to produce far sophisitcated weapons at lower pirce. Su-30MK is still produced at lower price in Russia than in India despite very high labor cost in Russia. (remember they use Siemens work colloboration system at Irkut)
Same is true for Tanks etc. West cannot stop automation of Russian defence firms.

Except that in the real world the inflationary pressure did carve out the Russian defence budget, so that it was in fact smaller than last year.

And inflation is eating also the competitors more than Russian defence firms as it can get materials at below market price from state controlled monopolies. u can see all this new Mitsubishi industrial machinery from 2008. So EU is not source of technology when there are others selling every thing to get out of there own economic depression.
http://www.npo-saturn.ru/!new/?pid=78

Ahhhh. So getting materials below market price means that you will producing and selling at a loss - losing the value of the materials if sold on an open market - in effect the produced item costs the same, you just subsidize from govt coffers or the SWFs. ;)

[roberto]

I'm talking about oil not semiconductors.

Oil is different. 1% production fluction per year does not matter when u have 50% price increase.


Except that in the real world the inflationary pressure did carve out the Russian defence budget, so that it was in fact smaller than last year.

Russia had inflation of over 12% since 90s. Does it mean that defence budget of 90s is bigger than 2008. this the flawed logic of JDW. since they simply cant understand Russian economic sytem. West had low inflationary period in 90s all of sudden they wake up to higher prices and than start believing that Russia had the same problem just now which infact is old thing.


Ahhhh. So getting materials below market price means that you will producing and selling at a loss - losing the value of the materials if sold on an open market - in effect the produced item costs the same, you just subsidize from govt coffers or the SWFs. ;)
Again the same mistake with natural resources. the rest natural resources u produce the more market price u get. It is the same like Wheat/Corn etc. It is better to get cheaper supply chain to defence firms rather than exposing them to open market manipulation.

[ASFC]

China has $2T in hard cash. They are going to built over 100 reactors and compelete with transfer of technology from Areva/Westinghouse/rosatom etc
This will increase Russia leverage with EU countries in Nuclear fuel cycle. as those China suck up fuel from other sources. the same happened to Semiconductors as EU fabs close down and equipment shipped to Russia. U r not fully comprehending the effect of globalization where every one is taking from same pot. Easter EU is importan as new industries shift from West to East for proximity. they will need for supply of energy not to mention rising incomes use more energy by definition. Globlization is not in West interest and Russia fully knows it to exploit it. EU weak economic and diplomatic postion is obvious from Kosvo issue as only 43 countries recognize it. . just look at how many countries in world out of 200 came out practically against Russia on Georgia. It is that bankrupt economic system that is based on public bluster but nothing for practice.


:onfloorl: Why bring this up-Strawman. You cannot say Kosovo shows the EU to be weak diplomatically and economically when it has no official position on Kosovo, and therefore cannot say that only 43 countries supporting the EU shows it to be a weak organisation when it has nothing to do with the diplomatic side on Kosovo (through its own choosing).
Let me see, 45 countries have recognised Kosovo, 47 have said they won't, the rest are indifferent. Alot of those who have not are driven by their own territorial disputes and the wish not to create a precedant that could break up their own countries.
In fact this could show the EU to be rather strong. Rather than sit on their backsides like Russia and Serbia and make lots of noise and international brinkmenship, the EU is leaving recognition up to national Govts (with all the brinkmanship that goes with that desicion) and are concentrating on helping those on the Ground with its missions there for the police and Judiciary.

Do explain how the 'West' is running a bankrupt economic system-in the real world.

I have already pointed out that the major Nuclear Fuel Powers do not rely on Russian sources for uranium. So Russia has absolutely no leverage in that market against the west, in fact lack of Russian involvement is one of the reasons the UK Govt is quite pro-nuclear where it once might not have been.
If you cannot see beyond your nationalistic pride that Russia cannot and does not control every source of energy then that is your problem and not mine at the end of the day.

And I would really like you to show credible sources that China will be build over 100 Nuclear Power Stations, and the timsescales invloved. Whilst they might build coal and gas fired power stations quite quickly, I expect some long lead in time before they get these 100 Nuclear Reactors.

[Grand Danois]

Oil is different. 1% production fluction per year does not matter when u have 50% price increase.

Except that it wasn't the 1% drop that increased the price - it was increased demand and thus a net loss. ;)

Russia had inflation of over 12% since 90s. Does it mean that defence budget of 90s is bigger than 2008. this the flawed logic of JDW. since they simply cant understand Russian economic sytem. West had low inflationary period in 90s all of sudden they wake up to higher prices and than start believing that Russia had the same problem just now which infact is old thing.

So internal inflationary pressures doesn't affect Russia? That's a very unique economic system. Absolutely no convergence as the economy develops!!!

Special rules for Russia.

Again the same mistake with natural resources. the rest natural resources u produce the more market price u get. It is the same like Wheat/Corn etc. It is better to get cheaper supply chain to defence firms rather than exposing them to open market manipulation.

Uhm no. See my first paragraph. Sorry. It just isn't so.

[roberto]

:onfloorl: Why bring this up-Strawman. You cannot say Kosovo shows the EU to be weak diplomatically and economically when it has no official position on Kosovo, and therefore cannot say that only 43 countries supporting the EU shows it to be a weak organisation when it has nothing to do with the diplomatic side on Kosovo (through its own choosing).
Let me see, 45 countries have recognised Kosovo, 47 have said they won't, the rest are indifferent. Alot of those who have not are driven by their own territorial disputes and the wish not to create a precedant that could break up their own countries.
In fact this could show the EU to be rather strong. Rather than sit on their backsides like Russia and Serbia and make lots of noise and international brinkmenship, the EU is leaving recognition up to national Govts (with all the brinkmanship that goes with that desicion) and are concentrating on helping those on the Ground with its missions there for the police and Judiciary.
Russia hasnt takens strong position on Kosov. they are quite capable of invading 5 to 10 countries in its borders and completely discredit article 5 of NATO. That time hasnt come yet.

Do explain how the 'West' is running a bankrupt economic system-in the real world.
So how u explain that China rise this year as largest manufacturing nation. its is exactly due to Western corporate leakage as they dont have any faith in its debt ridden consumer thats why they need emerging markets for profits.
it creates more opportunity for Russia to squeeze other countries.

I have already pointed out that the major Nuclear Fuel Powers do not rely on Russian sources for uranium. So Russia has absolutely no leverage in that market against the west, in fact lack of Russian involvement is one of the reasons the UK Govt is quite pro-nuclear where it once might not have been.
If you cannot see beyond your nationalistic pride that Russia cannot and does not control every source of energy then that is your problem and not mine at the end of the day.

And I would really like you to show credible sources that China will be build over 100 Nuclear Power Stations, and the timsescales invloved. Whilst they might build coal and gas fired power stations quite quickly, I expect some long lead in time before they get these 100 Nuclear Reactors.

http://torontosun.com/News/Canada/2008/08/17/6478251-sun.html
There are 100 reactors being planned worldwide for the next 20 years, but experts expect the number of plant operations to double by 2030 so that would be another 400 plants," Dr. Neil Alexander, the newly appointed president of the Organization of CANDU industries, told the Sunday Sun.

"The way I see it, it's like you are a surfer and you see a wave of opportunity rising and you're paddling fast to get to the top to ride that wave."

A monster wave has already passed.

China has moved to increase its nuclear power capacity five-fold by 2020 -- that's two new reactors a year

[Grand Danois]

Russia hasnt takens strong position on Kosov. they are quite capable of invading 5 to 10 countries in its borders and completely discredit article 5 of NATO. That time hasnt come yet.

Dunn dunn dunn!!!

:onfloorl:

[ASFC]

Russia hasnt takens strong position on Kosov. they are quite capable of invading 5 to 10 countries in its borders and completely discredit article 5 of NATO. That time hasnt come yet.

So the idea that Russia considers Kosovo 'illegal' and is strongly supporting Serbia is not a strong position? And tell me what makes you think Russia is stupid enough to risk NATOs reaction to an invasion of a NATO country-which you know where it will lead. For a Russian President to attack NATO is as Stupid as Georgia starting this current war- so stop spouting rubbish. Just because Europe did nothing when Russia invaded Georgia, doesn't mean NATO would stand idly by whilst Russia tried to walk over Europe.

[roberto]

Except that it wasn't the 1% drop that increased the price - it was increased demand and thus a net loss. ;)

Increase demand of Oil in 2008? can u show me a single report that shows there is increase demand in the world in 2008 compared to 2007? Price increase has nothing to do with increase demand. Think harder.

So the idea that Russia considers Kosovo 'illegal' and is strongly supporting Serbia is not a strong position? And tell me what makes you think Russia is stupid enough to risk NATOs reaction to an invasion of a NATO country-which you know where it will lead. For a Russian President to attack NATO is as Stupid as Georgia starting this current war- so stop spouting rubbish. Just because Europe did nothing when Russia invaded Georgia, doesn't mean NATO would stand idly by whilst Russia tried to walk over Europe
its hardly a strong position. Strong position means to do some thing practically about it. And there is new Military doctorine for Russia. Next 4 years would be quite interesting. NATO is in no position that is going to stop it now.

http://www.kommersant.com/p917043/r_527/Dmitry_Rogozin_outlined_a_new_foreign_policy_conce pt_of_Russia/
Ambassador Rogozin’s address had much in common with the speech of Russia’s President Dmitry Medvedev, which he gave before Russia’s diplomats on July 16. Ahead of the session Dmitry Rogozin told Kommersant what he had prepared for the listeners in Brussels, “I’ll emphasize that the new Russia has taken a new role. From this time on we’ll be guided by the principles that are beneficial to us.”

[Grand Danois]

Increase demand of Oil in 2008? can u show me a single report that shows there is increase demand in the world in 2008 compared to 2007? Price increase has nothing to do with increase demand. Think harder.

I was absolutely sure you contended that the 1% drop was in order to increase cost. Wait, that was absolutely what you said!!! Are you reversing postion?

The price hike over the past years have had nothing to do with Russian manipulation. Precise enough?

Don't play semantics. ;)

[roberto]

I was absolutely sure you contended that the 1% drop was in order to increase cost. Wait, that was absolutely what you said!!! Are you reversing postion?

The price hike over the past years have had nothing to do with Russian manipulation. Precise enough?

Don't play semantics. ;)
U clearly said that Oil price increase is due to increase in demand. But there is no increase in demand in 2008 relative to 2007. So what explain 50% price increase. World is in serious economic decline. the only way to explain Price increase is Putin strategy. On one hand it enriches him without increasing production and on the other hand it weakens the industrialized consumer countries so they can sell there advance products to Russia to ward off economic collapse.

http://uk.reuters.com/article/oilRpt/idUKL1424554320080714
Saudi and Russia agree on oil issues: Saudi Prince

[Grand Danois]

U clearly said that Oil price increase is due to increase in demand. But there is no increase in demand in 2008 relative to 2007. So what explain 50% price increase. World is in serious economic decline. the only way to explain Price increase is Putin strategy. On one hand it enriches him without increasing production and on the other hand it weakens the industrialized consumer countries so they can sell there advance products to Russia to ward off economic collapse.

But Russia increased production while price was on the rise! The increase was due to increase in demand. Now Russian output is less and cost is falling.

The reverse of the model you're proposing! ;)

Russia doesn't follow your concept. :D

[roberto]

But Russia increased production while price was on the rise! The increase was due to increase in demand. Now Russian output is less and cost is falling.

The reverse of the model you're proposing! ;)

Russia doesn't follow your concept. :D
They increase production untill 2007 when prices averaged $67 dollar a barrel. In 2008 they didnot increase anything as price avg is $115 untill now. So no point to invest massive amount just to get 1 or 2% increase.
U can clearly see 7 month continous increase in export tax. it just means they dont want to export that much.


http://www.turkishdailynews.com.tr/article.php?enewsid=103588
Russia to raise oil export tax

Russia will increase its crude export tax by 17 percent to a record on June 1. The tax will be set at $398.10 per metric ton, the seventh consecutive increase, Alexander Sakovich, deputy head of the Finance Ministry's customs department, said by telephone in Moscow Sunday. The current duty is $340.10 a ton, or $46.40 a barrel.

[Todjaeger]

Increase demand of Oil in 2008? can u show me a single report that shows there is increase demand in the world in 2008 compared to 2007? Price increase has nothing to do with increase demand. Think harder.

Since you asked for it.... Look here (http://omrpublic.iea.org/world/wb_wodem.pdf). It clearly indicates an increased demand for oil in 2008 over 2007, with that in turn being greater than 2006 and so on.

That would seem to contradict the following statement.

U clearly said that Oil price increase is due to increase in demand. But there is no increase in demand in 2008 relative to 2007. So what explain 50% price increase. World is in serious economic decline. the only way to explain Price increase is Putin strategy. On one hand it enriches him without increasing production and on the other hand it weakens the industrialized consumer countries so they can sell there advance products to Russia to ward off economic collapse.

As for explaining the price increase for petroleum products, the "Putin strategy" is by no means the only explanation. At the most basic level, the price of a product (petroleum) increases as the demand increases relative to the supply. Given the high levels of industrialization and development in the West, there is an ongoing high demand for fuel sources. With the increasing industrialization and development occurring in China and India, these two markets are having an increased demand for fuel, particularly relative to their domestic petroleum supplies. The demand has grown at a pace that the world production of petroleum has not been able to keep pace with, and the trend is expected to continue (see here (http://www.eia.doe.gov/oiaf/ieo/pdf/ieopol.pdf) and here (http://www.eia.doe.gov/oiaf/ieo/pdf/ieoreftab_4.pdf)). As a natural outgrowth of the increased demand vs. supply, there was a price increase per barrel of petroleum. The demand was exacerbated this year (and in prior years too) by the actions of energy speculators who further increased the price by reducing the available petroleum supply by making speculation purchases of petroleum. Essentially some of the current supply was being stockpiled in anticipation of even higher future prices due to increased demand, reduced supply, or various disruptions in the flow of petroleum to the end-users.

AFAIK elements of Congress and the US government are looking into whether the actions of the energy speculators were sufficient to cause a significant disruption or impact on the petroleum markets.

-Cheers

[roberto]

Since you asked for it.... Look here (http://omrpublic.iea.org/world/wb_wodem.pdf). It clearly indicates an increased demand for oil in 2008 over 2007, with that in turn being greater than 2006 and so on.

That would seem to contradict the following statement.

ur link is only future speculation. not actual demand. That is actual conditions. I bet EU/Japan are in same situation. the only demand is inside Russia/OPEC etc.

http://www.bangkokpost.com/180808_Business/18Aug2008_biz46.php
Concerns over a slowdown in global demand remained the main factor weighing down prices. US oil demand in the first half of this year dropped by an average of 800,000 barrels per day, the biggest fall in 26 years.
China reported a sharp drop in crude imports in July by 7% to a seven-month low, which some analysts cautioned could be an early sign of a slowdown in Chinese demand




As for explaining the price increase for petroleum products, the "Putin strategy" is by no means the only explanation. At the most basic level, the price of a product (petroleum) increases as the demand increases relative to the supply. Given the high levels of industrialization and development in the West, there is an ongoing high demand for fuel sources. With the increasing industrialization and development occurring in China and India, these two markets are having an increased demand for fuel, particularly relative to their domestic petroleum supplies. The demand has grown at a pace that the world production of petroleum has not been able to keep pace with, and the trend is expected to continue (see here (http://www.eia.doe.gov/oiaf/ieo/pdf/ieopol.pdf) and here (http://www.eia.doe.gov/oiaf/ieo/pdf/ieoreftab_4.pdf)). As a natural outgrowth of the increased demand vs. supply, there was a price increase per barrel of petroleum. The demand was exacerbated this year (and in prior years too) by the actions of energy speculators who further increased the price by reducing the available petroleum supply by making speculation purchases of petroleum. Essentially some of the current supply was being stockpiled in anticipation of even higher future prices due to increased demand, reduced supply, or various disruptions in the flow of petroleum to the end-users.

AFAIK elements of Congress and the US government are looking into whether the actions of the energy speculators were sufficient to cause a significant disruption or impact on the petroleum markets.

-Cheers
Any demand increase in China/India etc is compensated by weak economic conditions in West. So there is no net increase to justify 50% price rise.

[Grand Danois]

They increase production untill 2007 when prices averaged $67 dollar a barrel. In 2008 they didnot increase anything as price avg is $115 untill now. So no point to invest massive amount just to get 1 or 2% increase.
U can clearly see 7 month continous increase in export tax. it just means they dont want to export that much.

Ahh. So you admit it was a conscious move, not to manipulate markets, but to increase revenue.

Thank you.

[Todjaeger]

ur link is only future speculation. not actual demand. That is actual conditions. I bet EU/Japan are in same situation. the only demand is inside Russia/OPEC etc.

I suggest re-reading the chart in the link. It is dated July 10th of this year and includes data for the first half of 2008 and compares that with the same period in 2007. Also the other links provided additional historical data from the US DOE indicating the increased use of petroleum over time.

Any demand increase in China/India etc is compensated by weak economic conditions in West. So there is no net increase to justify 50% price rise.

As the charts indicate, there has been a drop in demand on the part of the West, because the current fuel usage behavior was not able to continue in such a high cost environment. The price rise preceded the drop in usage, and thus demand. Not the other way around. Also as a result of changes to political/security conditions in parts of the world, threats to future supplies were deemed lower, thus reducing some of the speculative pricing which had played a role in the price rise. However, there has still been a net overall increase in the demand for petroleum worldwide, even with a change in consumption habits in the US.

In point of fact, while there was a reduction in US consumption, within other member-nations of the OECD, there was an increase as seen here (http://www.eia.doe.gov/steo) resulting in a net ~500,000 barrel/day increase in consumption for the first half of 2008 compared to prior years.

While there are a number of factors which come together to determine petroleum costs, the indications are that total demand has been growing at a faster rate than total production. If there is something which is available indicating the opposite as some have claimed, that worldwide production is increasing at a faster rate than the growth in demand, and/or that global demand is decreasing relative to global production, please post it. Otherwise, it would appear that claims are being made with incomplete, or selective data to support ones position.

-Cheers

[roberto]

I suggest re-reading the chart in the link. It is dated July 10th of this year and includes data for the first half of 2008 and compares that with the same period in 2007. Also the other links provided additional historical data from the US DOE indicating the increased use of petroleum over time.
I have clearly read the chart. it is giving projection not actual data.



As the charts indicate, there has been a drop in demand on the part of the West, because the current fuel usage behavior was not able to continue in such a high cost environment. The price rise preceded the drop in usage, and thus demand. Not the other way around. Also as a result of changes to political/security conditions in parts of the world, threats to future supplies were deemed lower, thus reducing some of the speculative pricing which had played a role in the price rise. However, there has still been a net overall increase in the demand for petroleum worldwide, even with a change in consumption habits in the US.

In point of fact, while there was a reduction in US consumption, within other member-nations of the OECD, there was an increase as seen here (http://www.eia.doe.gov/steo) resulting in a net ~500,000 barrel/day increase in consumption for the first half of 2008 compared to prior years.

While there are a number of factors which come together to determine petroleum costs, the indications are that total demand has been growing at a faster rate than total production. If there is something which is available indicating the opposite as some have claimed, that worldwide production is increasing at a faster rate than the growth in demand, and/or that global demand is decreasing relative to global production, please post it. Otherwise, it would appear that claims are being made with incomplete, or selective data to support ones position.

-Cheers
500,000 bbl/d even if it is true (Preliminary based on speculation for other countries) is less than 1% increase in demand. it does not justify more than 50% increase in prices. infact 1% demand increase is is below normal figure through out the history of Oil consumption. the only new factor is Putin.



http://www.eia.doe.gov/steo
Consumption. Preliminary data indicates that global consumption rose by roughly 500,000 barrels per day (bbl/d) during the first half of 2008 compared with year-earlier levels, as a 1.3-million bbl/d rise in consumption outside of the Organization for Economic Cooperation and Development (OECD) was partially countered by an 800,000 bbl/d drop in U.S. consumption compared with year-earlier levels.

[roberto]

Ahh. So you admit it was a conscious move, not to manipulate markets, but to increase revenue.

Thank you.

It means that the knew ahead of time that price will increase so they increase export duty ahead of time to collect money with out caring about production or investment levels.

[Grand Danois]

It means that the knew ahead of time that price will increase so they increase export duty ahead of time to collect money with out caring about production or investment levels.

This would be the third model you offer?

[roberto]

This would be the third model you offer?
It is part of same explaination. They wouldnt have continously increase export tax to such levels without prior knowledge. when u have such high prices. u practically dont care about production levels. They are continously increasing it.




http://steelguru.com/news/index/2008/07/24/NTU5NDI%3D/Russia_to_raise_oil_export_duty_from_August.html
Russia to raise oil export duty from August
RIA Novosti reported that Russia's government has approved a rise in Russian oil export duty of USD 97.8 to a record USD 495.9 per tonne as of August 1st.

Export duties on light oil products will rise to USD 346.4 per tonne from August 1st 2008, from the current USD 280.5 and duty on heavy petroleum products will grow to USD 186.6 per tonne from USD 151.1.
The government adjusts export duty on crude and petroleum products every two months, depending on changes in the Urals blend price on world markets

[Grand Danois]

It is part of same explaination. They wouldnt have continously increase export tax to such levels without prior knowledge. when u have such high prices. u practically dont care about production levels. They are continously increasing it.

So we can agree the Russian Govt has by discouraging investment capped production (and effectively diminished the reserves) for the purpose of maximising profit.

And since Russian domestic consumption is on the increase, Russian influence through oil is set to diminish in the future.

[Feanor]

As is Russian oil production (at least in the near future) as current oil sites run dry and new ones take quite a bit of time and money to get going. Remember pumping a barrel of oil from Eastern Siberia is not the same as pumping a barrel in Kuwait.

[Sampanviking]

Two points

One: EU dependence is only going to grow as EU demand will continue to increase and North Sea output is in terminal decline and the cost of production rising sharply in accordance with Post Peak Oil projections.

Two: The main issue here is currently Gas and this comes not so much from Eastern Siberia but from the Caspian basin. President Medvedevs recent huge deals with Kazakhstan, Turkmenistan and protocols of understanding with Iran pave the way to realisation of the creation of a new OPEC style Gas Cartel with Gazprom at its heart. With Georgia neutralised, the acquiescence of Azerbaijan is largely a given, which gives Russia the controlling hand in Central Asia that it is looking for.

This Energy Security issue, is about who can satisfy Europe's Energy Security and now the answer is increasingly plain.. Russia. As is often quoted, "Nations do not have friends only interests" and Energy Security is "Interest" number one!.

With US failure to secure Europe's Energy security, its influence and power can only decline, while that of Russia can only increase. It is probably this reality that explains in a large part why European opposition to Russia is lukewarm verbiage and not backed with any significant action.

[Chrom]

So we can agree the Russian Govt has by discouraging investment capped production (and effectively diminished the reserves) for the purpose of maximising profit.

And since Russian domestic consumption is on the increase, Russian influence through oil is set to diminish in the future.

We can also say it will INCREASE in the future... since there will be not enough russian oil produced to supply all needs in the West - so EU will be forced to compete for russian oil. With that scenario russians will have choice whom to sell they oil WITHOUT suffering from over-production.

This will clearly increase they influence as oil sellers - they will be more independent to choose buyers.

[Grand Danois]

Several points on gas,

The increase in European energy consumption is unlike to continue when energy costs what is does and will continue to do so. Currently long term contracts are in play to keep costs down. It wont continue to be so cheap.

The two main consumers in absolute volumes, Germany and Italy, is unlikely to expand much beyond what they have now. And this situation is brought along due to those two countries switching away from nuclear for political reasons.

The large consumers, in relative terms, are the E Europeans which are connected to the ex-Sov grid and thus are consumers for traditional reasons. We are talking Poland, the Balts, Czechs, Slovaks, etc. (and Finland).They have their specific reasons to switch away, and are going to nuclear or imported LNG. I haven't looked into what they're doing wrt decentralised renewables etc...

Regardless of relations with Russia, energy policies are being managed and risk diversified. In other words, there is a cap somewhere on import from a single source, regardlass. Those happy go lucky projections that entrepeneurs present in their prospects for pipelines and gas powerplants are less likely to hold. Particularly if the powerplant is single fuel only. If there was any politician or advisors who were wobbly on their predictions, the situation with Georgia has large potential to shift their opinion and advice away from Russian controlled gas. (This is what I alluded to earlier in another thread). It will most certainly cement and create new strategies in the East.

Further, there is the impact of renewables. No, I don't have any illusions that it will contribute more than a handful of percentage points of the total. But you only have to manage the fraction of the fraction of the total that is imported Russian gas. Further it doesn't have to be replaced entirely just kept under critical levels. Wind power and decentralised biomass are mature and viable and the contribution to the total is on the increase (well, there is also the CO2 emssion reductions to consider).

But now for the big killer. Coal fired plants in Europe. Let's have a look at Germany: much of their coal fired capacity was built 50 years ago!!! It has an average electricity generating efficiency of 37%, whereas a modern coal fired plants have an efficiency of 47%!!! (and with central heating or using the excess energy for industrial co-gen it goes up to 65%) If you take the "The Dirty Dozen" (http://www.wwf.de/fileadmin/fm-wwf/filme/co2-karte-2007-014-mx.swf) in Germany and compare their CO2 emissions with what a 47% plant emits (730g CO"/KWh, please take a look. Very interesting link), it is realised that on average, the modern plant uses 30% less coal to produce same amount of electricity and central heating/process energy. And also emits 30% less CO2, for you greenies out there. ;) Actually those old 30 coal fired plants eat up 50% of the German 2008 CO2 emission quota. :P Btw, note that modern coal fired plants can switch to and from coal and gas. I don't know if the current crop of gas fired plants can do the same.

Since coal and gas are direct competitors (electricity/process energy), and that much of E Europe have similar situations with their coal fired plants, it becomes obvious that there is ample potential and opportunity to increase production and at the same time reduce coal consumption (and CO2 emissions).

So a strategy of nuclear/modern coal/renewables/alternative import is viable. There is great potential and opportunity.

So there is no reason to think that Europe is destined to become dependent on energy from Russia.

Particularly not when energy diversification is a tool that is being used and there is ample room to maneuver in as shown above.

And when energy from Russia at the moment accounts for what? 10% of the total?

To relate it to the current situation in Georgia. The proponents of Russian gas just got one argument less and the opponents got one more.

Just as the proponents of a policy of embracing Russia to bring it into "the modern world" also have a worse vantage point (Schröder comes to mind). This is a great deal sadder. But this is for the other thread.

[roberto]

So we can agree the Russian Govt has by discouraging investment capped production (and effectively diminished the reserves) for the purpose of maximising profit.

And since Russian domestic consumption is on the increase, Russian influence through oil is set to diminish in the future.
Russian companies have built global alliances. it does not matter where they increase production . West is completely dependent on Russia. They dont need to increase there own production to maximise profits. Show me even a single country outside West that is against Russian policies. infact hardline policies of Russia with respect to resoruces giving more bargaining power to resource producing countries.

[Grand Danois]

Russian companies have built global alliances. it does not matter where they increase production . West is completely dependent on Russia. They dont need to increase there own production to maximise profits. Show me even a single country outside West that is against Russian policies. infact hardline policies of Russia with respect to resoruces giving more bargaining power to resource producing countries.

Haha. Russia doesn't control Algeria et al. So supply may be optimized for Algeria, but they're following their own interests - not Russias. Note the difference.

Read my above post. Gas is a fraction of the European energy budget - and replacable.

Cheers

[roberto]

Haha. Russia doesn't control Algeria et al. So supply may be optimized for Algeria, but they're following their own interests - not Russias. Note the difference.

Read my above post. Gas is a fraction of the European energy budget - and replacable.

Cheers
Surely. It is strong Russian power that is giving almost every country leverage to renegotiate contracts. I told you before. EU has nowhere to go but deal with Russian on Russian terms. Even UK will become big importer in less than 10 years.


http://www.macaudailytimesnews.com/index.php?option=com_content&task=view&id=13440&Itemid=34
Spain's Gas Natural, Russia's Gazprom sign cooperation deal
Tuesday, 22 July 2008
Gas Naturel, Spain's leading gas supplier which is seeking to reduce its dependence on Algerian gas, said yesterday it had signed a deal with Russian state-owned gas monopoly Gazprom on liquefied natural gas projects.
The company said in a statement that it would also work with Gazprom, the world's biggest gas producer, to study possible cooperation in other areas like electricity and gas pipelines.
"The signing of this accord demonstrates the interest that the two companies have in developing a close strategic cooperation over the next two years," it said. Gas Naturel gave no financial details of the agreement.
It is the second cooperation agreement between a Spanish energy firm and the Russian gas giant.
In October 2006 Spain's leading oil group, Repsol YPF, announced that it had signed a draft agreement with Gazprom to study possible joint oil and gas projects.
Earlier this month Repsol said it was in advanced talks with russia's Rosneft on buying a stake in an exploration block on Sakhalin Island, in Russia's Far East.
Algeria is the largest supplier of liquefied natural gas to the 27-member European Union, which is served by pipelines under the Mediterranean Sea that connect the north African country to Spain and Italy.
Algeria accounted for 34.6 percent of the total amount of gas which Spain imported between January 2007 and January 2008, according to industry ministry figures.
But there has been friction recently between Algerian and Spanish energy firms.
Last year Algerian state-owned energy company Sonatrach cancelled a contract with Repsol and Gas Natural to develop its Gassi Touil plant due to a dispute over pricing and delivery levels.
Sonatrach is also seeking to renegotiate long-term delivery contracts signed with Spain when the price of oil and gas was much lower than it is today.

[ASFC]

:onfloorl: O really? The UK is building new Nuclear Power Stations, imports lots of coal from Poland (on top of any we produce ourselves), import LNG from Algeria (just because Gazprom has opened offices (dunn dunn dunn) in North Africa does not mean they control the resources there on anywhere else outside Russia). And we have Gas from the North Sea, from UK and Norweigen sources. Oh and then there is the fact that we seem to have gone wind trubine crazy. If anything the UK's reliance on Russian Gas will be reduced.

Before you accuse other posters of lying about what their sources say you need to stop, think and stop spouting unsubstatiated rubbish-like China building 100 reactors by 2020, or Russia controling all of the wests energy supplies, or the UK (or Europe for that matter) massively increasing its reliance on Russian Gas. :rolleyes:

[roberto]

:onfloorl: O really? The UK is building new Nuclear Power Stations, imports lots of coal from Poland (on top of any we produce ourselves), import LNG from Algeria (just because Gazprom has opened offices (dunn dunn dunn) in North Africa does not mean they control the resources there on anywhere else outside Russia). And we have Gas from the North Sea, from UK and Norweigen sources. Oh and then there is the fact that we seem to have gone wind trubine crazy. If anything the UK's reliance on Russian Gas will be reduced.

Before you accuse other posters of lying about what their sources say you need to stop, think and stop spouting unsubstatiated rubbish-like China building 100 reactors by 2020, or Russia controling all of the wests energy supplies, or the UK (or Europe for that matter) massively increasing its reliance on Russian Gas. :rolleyes:
When u start importing Coal from Poland. It will increase price of coal not to mention transportation charges. Coal cannot flow in Pipelines like Gas. Similar is the case with Nuke fuel cyycle. the more u built the more power to Russia. And we are waiting for Nov Gas Opec meeting.
Look at Weak economic position. Wealth built on Debt.

http://www.guardian.co.uk/business/feedarticle/7734222
UPDATE 1-Russia tensions could hit Ukraine banks-S&P
LONDON, Aug 18 (Reuters) - The refinancing of the debt of Ukraine's highly leveraged banks is at risk if foreign investors take fright from worsening relations between the country and Russia, Standard & Poor's (S&P) said on Monday.
The ratings agency also said an escalation in tensions between Ukraine and Russia would lead to a drop in foreign direct investment into Ukraine, shutting down a key source of funding to cover the country's widening current account deficit.
"Ukraine's banking sector is highly leveraged and dependent on foreign investors to refinance existing debt. Western investors already have less appetite for Ukrainian risk than they did two weeks ago," Frank Gill, S&P director of European sovereign ratings, told Reuters.
S&P estimates that foreign debt of Ukrainian banks reached more than $35 billion as at mid-2008, representing 28 percent of the banking sector's total liabilities.
As a row continues over the use of a Ukrainian Black Sea port by Russian warships, the cost of insuring Ukraine's debt against restructuring or default rose on Monday to its highest levels since Ukraine's "Orange Revolution" of 2004. [ID:nLI728791]
Medvedev Doctorine. Practically giving Right to intervene where ever Russian ethinic minorities are.

http://www.reuters.com/article/GCA-Georgia/idUSL768040420080818
In a show of defiance, Medvedev said: "If anyone thinks that they can kill our citizens and escape unpunished, we will never allow this.

"If anyone tries this again, we will come out with a crushing response. We have all the necessary resources, political, economic and military," a stern-looking Medvedev told World War Two veterans in the Russian city of Kursk

[Grand Danois]

Surely. It is strong Russian power that is giving almost every country leverage to renegotiate contracts. I told you before. EU has nowhere to go but deal with Russian on Russian terms. Even UK will become big importer in less than 10 years.

profit maximizing was not your initial postulate. your initial postulate was the Russia controlled EU via energy dependency - which has been debunked.

cheers

[roberto]

profit maximizing was not your initial postulate. your initial postulate was the Russia controlled EU via energy dependency - which has been debunked.

cheers
Profit maximizing (increas prices )the corner stone of leverage. It makes EU poor as vast somes of money is used for energy and It makes Moscow richer to buy high technolgies and corporate exectives from West which in turn put more pressure on Western Politicians.
. Just look at Investment bankers.



http://www.bloomberg.com/apps/news?p...HIo&refer=home
Moscow Bankers Get $7 Million Payday, Double New York Average

By Elisa Martinuzzi and Todd Prince

May 14 (Bloomberg) -- Within a mile of the tomb of Vladimir Lenin, who vowed to destroy capitalists, investment bankers in Moscow are now earning double the pay of their counterparts anywhere else.
Income taxes in Moscow are 13 percent, while anyone who earns more than 42,055 pounds ($83,700) in Britain pays 40 percent.
Industry recruiters at RosExpert estimate that about 150 senior corporate bankers work in Moscow, compared with more than 1,000 in New York. Top dealmakers in New York, still the world's financial capital, can take home as much as $20 million, including bonuses that depend on the fees they generate for their firm, according to Options Group


If Russia doesnot control so Why Algeria cancelled already signed contract?



http://www.turkishweekly.net/news.php?id=58112
MOSCOW -- Libya sought to strengthen energy ties with Russia, an alliance that could raise alarms in Europe where countries had looked to Libya to help ease their dependence on Russian oil.
"We would like to achieve bigger volumes in investment cooperation between Russia and Libya in the oil and gas sectors," Libyan Prime Minister al-Baghdadi Ali al-Mahmudi said at the start of talks with his Russian counterpart, Vladimir Putin.

[Grand Danois]

Profit maximizing (increas prices )the corner stone of leverage. It makes EU poor as vast somes of money is used for energy and It makes Moscow richer to buy high technolgies and corporate exectives from West which in turn put more pressure on Western Politicians.
. Just look at Investment bankers.


Your threads of reasoning are long, full of conjecture and distorted to fit your view of the world.

cheers

[roberto]

Your threads of reasoning are long, full of conjecture and distorted to fit your view of the world.

cheers
surely this distorted view of the world.

http://newsweek.washingtonpost.com/postglobal/ali_ettefagh/2008/08/post_2.html
Russia Positions Itself As Global Economic Player
The Current Discussion: What's the next likely target of Russia's reassertion of power?
America has been busy with old-fashioned territory grabs and the eastward crawl of NATO towards Ukraine and Georgia, aiming for relatively modest oil reserves in the Caspian region. However, Russia has been nursing a modern global strategy that leaps over borders. Russia has cut landmark deals with former and potential American clients: weapon sales to Saudi Arabia, Indonesia, and Venezuela are the first of their kind. Sales of gas via a new trans-Siberia gas pipeline to northern China and talks of a "gas OPEC" with Iran, Algeria and others is another that towers over the pseudo-democratic ideas of Georgia. Border demarcation of the North Pole (with purported reserves of more than 90 billion barrels of oil-- twelve times the amount in the Caspian region), nuclear power deals with India and Iran and direct under-sea gas pipelines to Germany, Turkey and south-eastern Europe (bypassing the Ukrainian chokehold on Russian gas lines to Europe) are other moves on the multi-dimensional chess board -- all as Russia is simply keeping cool and amusing itself with the much hyped, but failed mission of Tony Blair as the chief negotiator of the Middle East Quartet, of which Russia is a member. From the Russian perspective, all options are on the table!

[Grand Danois]

Ahhh. This is the powerplant which supply my home with electricity and central heating:

Avedøre Power Station is situated at Avedøre Holme south of Copenhagen and consists of two power station units, Avedøre Power Station’s Unit 1 from 1990 and Unit 2 from 2001.

The overall production capacity of the two Avedøre Power Station units is 810 Megawatts of electricity and 900 Megawatts of heat. In 2006 the power station generated a net quantity of 4,398 GWh of electricity and a net quantity of 12,172 TJ of district heating. The Avedøre Power Station has approximately 130 employees.

Avedøre Power Station’s Unit 1 primarily uses coal, while Avedøre Power Station’s Unit 2 can use a wide variety of fuels: natural gas, oil, straw and wood pellets.
Avedøre Power Station’s Unit 2 has facilities consisting of several parts that, when combined, can make record-high use of the energy in the fuels. By simultaneously generating heat and electricity, Avedøre Power Station’s Unit 2 utilises as much as 94 % of the energy in the fuels and has an electrical efficiency of 49%. An achievement that makes the unit one of the most efficient in the world.

http://www.dongenergy.com/EN/business+activities/generation/electricity+generation/Primary+power+stations/Avedore+Power+Station.htm

So modern, superefficiency, multifuel powerplants doesn't care if they use coal, natural gas, straw or wood pellets.

Whatever is cheapest determines the value of the gas - it is one big pool. It seems as the European power will be renewed, replaced, upgraded, the reliance on gas will diminish. Algeria and Russia won't be able to set the price of the gas. Btw, Unit 2 is currently fueled by S American coal. Better and cheaper than European.

Global, multisource and flexibility.

Cheers

[Grand Danois]

surely this distorted view of the world.

That's called alarmism. And you're several degrees beyond this.

cheers

[swerve]

But now for the big killer. Coal fired plants in Europe. Let's have a look at Germany: much of their coal fired capacity was built 50 years ago!!! It has an average electricity generating efficiency of 37%, whereas a modern coal fired plants have an efficiency of 47%!!! (and with central heating or using the excess energy for industrial co-gen it goes up to 65%)
Here in the UK we have plans for new coal-fired stations. We still have coal underground, & if prices of alternatives get too high, or supply becomes unreliable, production could be increased quite fast. At present, open-cast mining is limited by environmental & legal restrictions, not economic or physical. Also, there's a lot of coal that we can import without Russia being able to influence it in the slightest.

[Feanor]

Grand Danois. You mentioned that the Russian military budget has declined in relative terms, and in PPP. Do you have the numbers? I would be very interested to see them.

[Grand Danois]

Grand Danois. You mentioned that the Russian military budget has declined in relative terms, and in PPP. Do you have the numbers? I would be very interested to see them.

Got it from Jane's. The article is still accessible and on frontpage of their site.

When comparing budgets of the 1990s to today, one has to remember the devaluation in 1998 and the fluctuations in exchange range over the entire period.

[Feanor]

K, I'll look for it. Though I'll take it with a grain of salt, as Russian military procurement has increased from 2007 to 2008.

EDIT: The big sign of course will be if the Su-34 of which 10 are allegedly undergoing assembly right now, gets delivered.

[Grand Danois]

Here in the UK we have plans for new coal-fired stations. We still have coal underground, & if prices of alternatives get too high, or supply becomes unreliable, production could be increased quite fast. At present, open-cast mining is limited by environmental & legal restrictions, not economic or physical. Also, there's a lot of coal that we can import without Russia being able to influence it in the slightest.

As it seems they could also use gas, pellets, straw - some can even use garbage.

Absolutely outside of the influence of Russia or any gas cartel.

[Grand Danois]

K, I'll look for it. Though I'll take it with a grain of salt, as Russian military procurement has increased from 2007 to 2008.

EDIT: The big sign of course will be if the Su-34 of which 10 are allegedly undergoing assembly right now, gets delivered.

Yes, but this kind of perspective only provides the macroeconomics, i.e. not if the fraction used for procurment has increased and personnel cost has gone down.

[roberto]

Ahhh. This is the powerplant which supply my home with electricity and central heating:



So modern, superefficiency, multifuel powerplants doesn't care if they use coal, natural gas, straw or wood pellets.

Whatever is cheapest determines the value of the gas - it is one big pool. It seems as the European power will be renewed, replaced, upgraded, the reliance on gas will diminish. Algeria and Russia won't be able to set the price of the gas. Btw, Unit 2 is currently fueled by S American coal. Better and cheaper than European.

Global, multisource and flexibility.

Cheers
Ur showing country with relatively little industrialization. (Industry has shifted to Asia anyway). what about Giant Ocean liners for transporting goods across continents (Isnt ur computer built in East Asia or its compnents), all the commercial lines, heavy steel mills that can produce millons of tons of steel per year, cement plants, semi conductor fabs. These things needs very heavy energy and raw material use.
The fact of matter is West prosperity (living standards)depends Globlization and Russia has now monoply over globalization.

http://network.nationalpost.com/np/blogs/fullcomment/archive/2008/07/24/robert-kagan-on-china-s-and-russia-s-foreign-policy-orbits-hugs-for-thugs.aspx
Sergey Lavrov, “For the first time in many years, a real competitive environment has emerged on the market of ideas value systems and development models.” [b]And the good news, from the Russian point of view, is that “the West is losing its monopoly on the globalization process.”

[Grand Danois]

Ur showing country with relatively little industrialization. (Industry has shifted to Asia anyway). what about Giant Ocean liners for transporting goods across continents (Isnt ur computer built in East Asia or its compnents), all the commercial lines, heavy steel mills that can produce millons of tons of steel per year, cement plants, semi conductor fabs. These things needs very heavy energy and raw material use.
The fact of matter is West prosperity (living standards)depends Globlization and Russia has now monoply over globalization.

Haha. 90% of world trade is by the ocean! The limits of your knowledge is on display again - for the nth time. (This leaves 10% done over land - including Russia).

European industrial output is high - it is just obscured by the even higher output in services. 20.3% of EU GDP is industrial output - and that is without construction & primary sector. That's 3.4 trillion dollars in 2006 (according to Eurostat). So yeah right, we're really really de-industrialized. What was the size of the Russian GDP? And how much is industry (without construction and energy/minerals (primary sector)?

Lastly how industrialised Denmark is has absolutely zero, nothing, zilch to do with the powerplant technology - it works just as well in the Ruhr - so that is just such an ... well irrelevant comment.

Btw, I noticed that this is another weak attempt to divert from defending your postulate. A very incoherent attempt at that.

[Feanor]

Yes, but this kind of perspective only provides the macroeconomics, i.e. not if the fraction used for procurment has increased and personnel cost has gone down.

I don't know the percentage allocation of the 2008 budget, but large scale training exercises are becoming more and more common in the Russian Army. The air force flight hours are increasing, and last winter the VMF deployed a mini-CVBG for the first time. If another cruise of the Kuznetsov goes ahead as planned then I'm highly skeptical of a PPP budget decrease. Lets not forget the budget went from 31 billion USD to 36.8 billion USD. 40.5 billion is the projected 2009 budget. Certainly beats the inflation rate. :unknown

EDIT: Danois I'm still at a loss as to why you're debating with him..... he doesn't understand what you're writing to him. :(

[Grand Danois]

I don't know the percentage allocation of the 2008 budget, but large scale training exercises are becoming more and more common in the Russian Army. The air force flight hours are increasing, and last winter the VMF deployed a mini-CVBG for the first time. If another cruise of the Kuznetsov goes ahead as planned then I'm highly skeptical of a PPP budget decrease. Lets not forget the budget went from 31 billion USD to 36.8 billion USD. 40.5 billion is the projected 2009 budget. Certainly beats the inflation rate. :unknown

EDIT: Danois I'm still at a loss as to why you're debating with him..... he doesn't understand what you're writing to him. :(

Because he crashed two threads and he is now corraled in this one. I'm the considerate and altruistic Mod. ;) Well, that and so the fact that I've been slightly sick the past two days, lying in bed and just had to pass some time (don't worry, I'm cool and will be back at work tomorrow.)

Yes, I get your point wrt no PPP decrease. There is also the possibility that public defence spending numbers are misleading...(?)

[drandul]

Some facts from frontline of Russian Gas/Oil explorations. (Me as participant)
This summer new exploration project conducted on eastern shelf of Kamchatka peninsula. Head operator- KNG ltd (Kamchatka NefteGas) - joint stock venture of 70 % Rosneft and 30 % KNOC- (Korean National Oil Company). That huge area newer was drilled and deeply explored before- only seismic surveys with some very promising results.
So right now second stage of that project supposed to begin but it is canceled.Reason- state regulator have not issued permit for drilling of next exploration wells. Reasons unclear. Results of first stage unclear as well. Looks like artificial suspension of explorations. In best case project could be continued next year. Enormous logistic efforts was made to support that project. I can't see whole picture -may be some games between Gasprom and Rosneft...strange anyway.

[roberto]

Haha. 90% of world trade is by the ocean! The limits of your knowledge is on display again - for the nth time. (This leaves 10% done over land - including Russia).
90% of World trade cannot be on Ships. u need rail and trucks to move from ports anyway. for Oil and Gas there is Pipelines. So ships are not the only method of transportation. Mexico/Canada are US largest trading partners. Similarly China will become largest trading partner of Russia and India this year. Overland routes have special advantages.
u need Potash and other fertilizer for Agriculture.

http://eng.rzd.ru/wps/portal/rzdeng?STRUCTURE_ID=15&layer_id=3044&refererLayerId=3043&id=102441
Foreign trade shipments by rail up 4.3% to 265.8 million tons in IH2008
The increase in volumes was due to higher consumption of oil, coal and fertilizers in Europe.


European industrial output is high - it is just obscured by the even higher output in services. 20.3% of EU GDP is industrial output - and that is without construction & primary sector. That's 3.4 trillion dollars in 2006 (according to Eurostat). So yeah right, we're really really de-industrialized. What was the size of the Russian GDP? And how much is industry (without construction and energy/minerals (primary sector)?
World largest Industrial nation was untill this year was US. Now It is China. So EU combined will be still less than US/China alone. Much of ur Industrial value input is trading among EU nations. so higher currency values comes into Play. EU Car and truck market is smaller than US and China alone. And Russia is EU largest car and truck market. Number of truck demand shows the trading power of nation.
Similar is the case of Steel production. Russian owns now 15% of US steel production and have huge inland expansion going on.

Lastly how industrialised Denmark is has absolutely zero, nothing, zilch to do with the powerplant technology - it works just as well in the Ruhr - so that is just such an ... well irrelevant comment.

Btw, I noticed that this is another weak attempt to divert from defending your postulate. A very incoherent attempt at that.
u cannot replicated this technolgoy for large nations. small high per capita nation with very small defense budgets can afford this kind of luxury but not big nations which have so many other responisibilities.

[ASFC]

90% of World trade cannot be on Ships.

http://www.imo.org/includes/blastDataOnly.asp/data_id%3D18900/IntShippingFlyerfinal.pdf

If you bother to read it before judging it then you will see on Page 2 of this leafl