BeeyondSight

What on Earth is Russia Up To?

Interesting news has been coming out of Russia lately! I know Putin is on his way "out", just like Blair and Bush, perhaps this is his one big push for "legacy" before he becomes political history? At any rate, it will be VERY interesting to see who takes over after he is gone. I know economically Russia has been doing VERY well after they instituted a "flat tax" a few years ago so they have plenty of money with which to build their power base. Let's watch this one!!
Bee

Putin calls for New Financial World Order

By Neil Buckley and Catherine Belton in St Petersburg
Link HERE

"Russian president Vladimir Putin called on Sunday for a radical overhaul of the world’s financial and trade institutions to reflect the growing economic power of emerging market countries including Russia.

Mr Putin said the world needed to create a new international financial architecture to replace an existing model that had become “archaic, undemocratic and unwieldy”.

His apparent challenge to western dominance of the world economic order came at a forum in St Petersburg designed to showcase the country’s economic recovery. Among 6,000 delegates at the biggest business forum ever held in post Soviet Russia were scores of international chief executives including heads of Deutsche Bank, BP, Royal Dutch Shell, Nestlé, Chevron, Siemens and Coca Cola.

Business deals worth more than $4bn were signed at the conference including an order by Aeroflot for Boeing jets as executives said they were continuing to invest in Russia despite deteriorating relations with the west.

Mr Putin’s hosting of the forum capped a week in which he dominated the international stage. He warned last Monday that Russia might target nuclear missiles at Europe if the US built a missile shield in Poland and the Czech Republic, then offered a compromise at the G8 summit involving switching part of the US system to Azerbaijan.

His speech on financial institutions suggested that, along with an aggressive recent campaign against US “unilateralism” in foreign policy, he was also seeking to challenge western dominance of the world economic order."

Russia bullies BP

How the aggressive behavior of the world's second largest exporter could drive prices higher for everyone.
By Steve Hargreaves, CNNMoney.com staff writer
(http://money.cnn.com/2007/06/01/news/international/russia_bp/index.htm)

"Russia is again flexing its energy muscle.

On Friday, reports said Russia may cancel a contract it has with BP to develop a huge natural gas field in the middle of the country, claiming BP wasn't producing enough gas at the project.

To bypass some of its pesky former satellite states, Russia may expand ship-borne energy exports in Novorossiysk and add them in Murmansk.

The vast majority of Russia's energy flows West to Europe via pipeline, but the country is currently building a pipeline east across Siberia to serve the fast growing Asian market.

This would be the latest in a string of incidents generally interpreted as Russia strong-arming its partners into deals more favorable to the government. These moves, analysts say, could hurt worldwide production and drive up energy costs for consumers everywhere.

Earlier this winter, the Kremlin shut off gas supplies to Europe after a dispute with Belarus, through which the pipeline passes. That dustup echoed a similar spat with Ukraine the previous winter.

As evidenced by Friday's BP news, private oil companies have also felt the Kremlin's wrath. In December, a consortium led by Royal Dutch Shell agreed to sell its majority stake in the $20 billion Sakhalin II project off eastern Siberia to Gazprom, Russia's state-controlled natural gas firm, after facing heightened scrutiny from Russian regulators that many saw as politically motivated.

The French energy company Total has run into a similar problem with a project near the Barents Sea.

And then there's the Yukos affair. In October 2003, the head of the giant private energy company was arrested and eventually jailed for tax evasion, though most observers say his real crime was challenging the political power of Russian President Vladimir Putin. Most of Yukos' assets have since gone to state-controlled oil company Rosneft, at what many said was a considerable discount."

Gazprom completes Sakhalin-2 takeover
Bloomberg News
(http://www.iht.com/articles/2007/04/18/news/shell.php)

"Gazprom, the Russian state-run gas company, on Wednesday completed the purchase of its controlling share in the Sakhalin-2 oil and gas project, buying half the stakes owned by Royal Dutch Shell, Mitsui and Mitsubishi for $7.45 billion.

Gazprom will now hold 50 percent plus one share in the project, while Shell has 27.5 percent, Mitsui 12.5 percent and Mitsubishi 10 percent, Shell said in a statement upon signing the agreement in Moscow."