While You Were Involved in War
In the midst of Vladimir Putin's land grab in Georgia, BP suffered another blow in its oilfield tussle in Russia. Last week, a Russian court barred Robert Dudley, the CEO of BP's joint venture in Russia, from running the company for two years. Now BP is trying to figure out how to secure its Russian assets, which account for a quarter of the company's global production.
BP and its partners at TNK-BP -- four Russian oligarchs who are mainly financiers and bankers -- have been in a dispute since spring. In a nutshell, the Russians value the company for the dividends it pays out; BP sees the company as more of a growth play, and wants to plow as much of the oil profit as possible back into the company. While that sounds like a balancing act managed at almost all companies around the world, it's turned ugly in this case.
As O and G readers know, I see this brawl ending badly for BP. Given the pressure the Russians have brought to bear, with the obvious collusion of the Kremlin (it's absurd to claim, as the Russian partners have, that an army of inspectors could have a free-for-all at the company unless the Kremlin were okay with it), I don't see how BP comes out with anywhere near its current 50% share of TNK-BP.
Indeed I think it's entirely possible that the British company is forced out entirely. In that case, BP itself -- meaning the global oil company -- is at risk; Wall Street will pummel its share price, and that would make it a vulnerable target for takeover. Some predict that Shell is the likeliest suitor, and I agree.
The partners are scheduled to meet to brawl again face to face on Sept. 25.
BP and its partners at TNK-BP -- four Russian oligarchs who are mainly financiers and bankers -- have been in a dispute since spring. In a nutshell, the Russians value the company for the dividends it pays out; BP sees the company as more of a growth play, and wants to plow as much of the oil profit as possible back into the company. While that sounds like a balancing act managed at almost all companies around the world, it's turned ugly in this case.
As O and G readers know, I see this brawl ending badly for BP. Given the pressure the Russians have brought to bear, with the obvious collusion of the Kremlin (it's absurd to claim, as the Russian partners have, that an army of inspectors could have a free-for-all at the company unless the Kremlin were okay with it), I don't see how BP comes out with anywhere near its current 50% share of TNK-BP.
Indeed I think it's entirely possible that the British company is forced out entirely. In that case, BP itself -- meaning the global oil company -- is at risk; Wall Street will pummel its share price, and that would make it a vulnerable target for takeover. Some predict that Shell is the likeliest suitor, and I agree.
The partners are scheduled to meet to brawl again face to face on Sept. 25.
Labels: Caspian, central asia, georgia, medvedev, oil, oil and the glory, petroleum, Putin, putin's labyrinth
12 Comments:
Steve:
You should probably also mention that the Russians say the crux of the disagreement comes down to the fact that the Russians want to expand internationally while BP feels that TNK-BP should stay within the borders in Russia and focus its efforts there.
The Russians feel that BP has an inherent conflict of interest between BP and TNK-BP on international projects.
BTW, we shall see if your description of the South Ossetian conflict should be properly described as "V. Putin's land grab." An ass kicking might be more appropriate.
Russia will eventually move out of Georgia proper and only peacekeepers will remain in South Ossetia. Therefore, no land will have been grabbed by Russia.
Timothy, as of now Levine is correct because it is "Putin's land grab." What will happen "eventually" is irrelevant. Moscow pulled out of Eastern Europe and Afghanistan eventually. Until that time it had been a land grab. Semantics are important for the purposes of being intellectually honest and rigorous.
Honest and Rigorous you are, N.
Most recent British and US "land grab" of Iraq and Afganistan goes on for several years. Mappet show in Kabul and Bagdad is not even laughable any more.
Russian army did not enter Tbilisi, did not overthrough government and did not controll oil pipeline. Brits and American did. Semantics are important, facts are not.
Joshua, your comment proves my point. First of, let's be clear on what we mean. Merriam-Webster's defines rigour as "strict precision, exactness." Both your comment and Timothy's lack that exactness and bring irrelevancies into this debate.
Apart from Iraq and Afghanistan, there are plenty of places that many people consider "land grabs": Kashmir, Tibet, Northern Cyprus, the Folklands, Island of Vukovar, Western Sakhara, etc., etc. Most are listed here: http://en.wikipedia.org/wiki/Category:Disputed_territories
Now, please, tell me, how bringing any one of those up on this blog contributes to either Timothy's or Steve's argument as to whether the current invasion and occupation of Georgia is Putin's land grab?
Your comment (and Timothy's) is typical of most criticisms coming from the left: at best they are not incorrect but they invariably miss the point. They are also simplistic. The world is complex and understanding it requires a touch more than a two-bit level of analysis. If I may, I would like to offer you two fine examples of intellectual rigour and honesty coming from two of the fiercest critics of the current US administration. Should their names appear unfamiliar, please google their background before saying anything - you'll save yourself an embarrassment. By the way, Levine, too, has expressed his criticisms of the US policies, both on this blog and in "Putin's Labyrinth." Anywho, here you go:
Georgia on My Mind
http://harpers.org/archive/2008/08/hbc-90003381
There Are No Good Guys, But We Must Be Most Wary of Russia
http://www.craigmurray.org.uk/archives/2008/08/there_are_no_go.html
Forgot to add: Joshua, it's true that Russia stopped short of occupying Tbilisi. But presenting that as Russia showing goodwill is an example of intellectual dishonesty. Russia had no choice but to halt its advance towards Tbilisi in the face of a massive international pressure. Most countries demanded to halt further moves. Only two supported: Cuba and Venezuela. A nice company Russia is in, I must say.
Also, say what you will about the war in Iraq but you have to admit that from the beginning, the US officially called it an occupation. I'd say you've got a bit of intellectual honesty and exactness there, would you agree? In contrast, Russia insists on calling its military presence on the soil of a sovereign country some sort of a peacemaking operation despite the fact that the Russians control most of Georgia's territory.
i agree with what joshua just said.
"Russia had no choice but to halt its advance towards Tbilisi in the face of a massive international pressure."
Sure they did. Words are not mines, antitank ditches, ATGMs, or tanks.
Another option would have been to give Tbilisi the Tskhinvali Treatment, but with BM-22s or BM-30s.
But thy didn't. They put the Georgian Army to headlong flight, and stopped.
"In contrast, Russia insists on calling its military presence on the soil of a sovereign country some sort of a peacemaking operation..."
Well, there's now more peace in S. Ossetia than there was on 8 August 2008.
"despite the fact that the Russians control most of Georgia's territory."
Yes, I'm sure the Georgian Army would like to have their firing position of the night of 8/7/08 back.
Hi guys, this is a useful discussion, and thanks for making it happen.
In my view, Russia's actions in Georgia smack almost solely of retribution for perceived offenses starting in the 1990 Gulf War (Russia's enforcement of a no-fly zone over parts of Georgia) and ranging into Kosovo (probable recognition of South Ossetia and Abkhazia).
Russia conflates genuine issues and desire for influence. Quite apart from the problematic rationale for the current war in Iraq, the no-fly zones there connected to the prior-existing conflict were largely intended to halt attacks on the country's minorities. As for Kosovo -- which I covered for Newsweek and NYT -- Serbia had spent the previous years massacring its former Yugloslav brothers. It was now intent on doing the same in Kosovo. The only problem with the Kosovo affair is that it happened late; NATO could have acted more forcefully during Bosnia.
This is notionally -- but not factually - similar in the mindset of certain people in the Kremlin.
Georgia made a huge mistake in South Ossetia and Abkhazia. It must acclimate itself to the idea that these regions are lost. Georgia must move on.
But that does not mean that Georgia loses its sovereignty. Russia's fantasies of re-establishment of empire are all being played out in Georgia today.
Steve, Saakishvili knew Russia is going to respond to aggression, there is no doubt about it. The question is why did he need a Russian responce? Do we need a new enemy? Iraq is getting old, nobody is really scared of Iran, but Russia, it's a whole different story.
Actually, if you look at the geography north of Tskhinvali, it could have gone very wrong for the Russians, with access through a single tunnel, and then a series of choke points subsequently. If the Georgians had been able to blitz through Tskhinvali and get to the constricted terrain to the north, it would have been a much tougher fight
I have a grudging respect for Mr. Putin and the Russian Army.
I live and America and I haven't
(up to now) heard any hate from the average citizen towards the Russians. Even now,not a lot.
But they don't like what they see as Russian adventurism.
Even the U.S. went to the UN and court of world opinion before going
into Iraq.
This thing is bad public relations for the Russians as long as it goes on.
It is much better to be friends than enemies.
How stupid does it look that Russia is "threatened" by a defensive-only system in Poland.
Sure, there is a certain paranoia in the West, but if Russia were to make the right moves, then people would be saying, hey we don't need
to put military equipment in the countries around Russia.
"Even the U.S. went to the UN and court of world opinion before going
into Iraq."
Actually, between Georgian aggression and Russian retaliation there was emergency meeting of Security Council regarding situation. Guess what? Nothing was decided...
"How stupid does it look that Russia is "threatened" by a defensive-only system in Poland."
I will leave it without comments, you try and think about your reaction regarding C-400 defensive missiles deployed in Cuba...
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