Russia Roughs Up Big Oil

• Report this Comment On July 25, 2008, at 6:50 PM, Seafairer wrote:

  I like Russia, but I would like better conrtol of my millions. Investing in Russia is like investing in Enron...

• Report this Comment On July 25, 2008, at 8:02 PM, ericssph wrote:

  These guys play chess... their outlook is long term, and they will beat anyone that thinks short term. They will get all their assets back, they're just waiting until it's all paid for before they pounce. These guys are smart and don't play the same game Westerners do. You can win in Russia, but you'd better think long term and plan ahead.

• Report this Comment On July 26, 2008, at 12:18 AM, venik4 wrote:

  BP entered the Russian market at a time when the country was extremely vulnerable. This is no longer the case. The situation in Russia changed dramatically over the past several years and BP is refusing to recognize this simple fact. Instead of trying to find a way of appeasing their Russian partners, BP's management chose to take the path of confrontation. They will lose. Russia's business reputation will take a hit in the short term, but this will not be a major setback. Today Russia is more than capable of developing its own energy resources.

• Report this Comment On July 26, 2008, at 12:21 AM, JHenster1 wrote:

  reply to ericssph

  In a way, they think long term--the co-owners of TNK-BP are very intelligent, there is no doubt. BP certainly isn't always the benign entity (or victim), either. However, when it comes to infrastructure and technical expertise, the Russian attitude is these are incidentals to be bought as needed, while Russian workers are nearly serfs. (Indeed, this was the fundamental issue with TNK-BP expat specialists--the expats acted too independent and were also getting too big a share of the wealth; the attitude could have rubbed off on the rest of the staff, eventually, and severely messed up the labor cost structure)

  The long-term investment in expertise and infrastructure is what not only underlies production, but also preserves safety. Unfortunately, safety is not a well-understood concept in Russia. This phenomena is also widespread in the rest of the world, where expertise is NOT always valued, particularly in the oil industry, since it results in too many inconvenient obstacles and costs to those in power.

  I hope they can sort it out; Russians have had to bear a disproportionate amount of misery in their history, and it would be good to see it change, but, from what I've seen, the attitudes remain as they were at the time of Peter the Great.

• Report this Comment On July 26, 2008, at 1:45 PM, dividendgrowth wrote:

  I think COP was very smart in dealing with Russians since they are satisfied with a 20% minority equity investment there.

• Report this Comment On August 05, 2008, at 6:39 PM, jaypow wrote:

  What repercussions will BP's plight have on Mechel's stock? Will all Russian investments suffer from this episode?

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