Putin´s Russia summarized in 12 seconds

The Telegraph:

"Russian rouble shaken in biggest one-day fall against dollar since 1998

The currency of Vladimir Putin's Russia has been left shaken by falling oil prices and sanctions related to ongoing tensions in Ukraine" 

An brief summary of Putin´s Russia:

 

Dashcam footage shows a car upside down after it has

been driven into a huge hole in a road in Russia

 

Plummeting oil prices will weaken Putin´s Russia

Oil prices are plummeting. They have gone down as much as 20% since June. This - together with Western sanctions - weaken Vladimir Putin´s chances to continue his policy of aggression in Ukraine and elsewhere:

Lower oil prices could have lots of knock-on effects around the world. Take Russia, which depends on oil sales to bring in foreign currency. The Russian government has set its three-year budget with the expectation that oil prices would stay at $100 per barrel. A sustained fall in prices could cripple the Russian economy and run up deficits.

Indeed, some energy analysts are starting to wonder if an oil crash might even force Russia to pull back in Ukraine and elsewhere. And on Tuesday, the Russian finance minister warned that the country could no longer afford a multibillion-dollar upgrade to its armed forces that had been approved by President Vladimir Putin

Read the entire article here

The tripling of Iraq's oil production capacity could mean the end of the Putin regime

The end of the Putin regime not that far away if things go well in Iraq

You may remember what investor William Browder said only a few days ago:

There is nothing behind the facade of Vladimir Putin's regime in Russia, says William Browder from Hermitage Capital Management."All it will take is a fall in the price of oil to $60 a barrel and Putin will be gone within a year.

If things go well in Iraq, the end of the Putin regime might not be very far away:

Iraq is poised to flood the oil market by tripling its capacity to pump crude by 2020 and is collaborating with Iran on strategy in a move that will challenge Saudi Arabia's grip on the Organisation of Petroleum Exporting Countries.

"We feel the world needs to be assured of fuel for economic growth," Hussain al-Shahristani, Deputy Prime Minister for Energy in Iraq told oil industry delegates attending a Chatham House Middle East energy conference.

Al Shahristani said on Tuesday that Iraq plans to boost its capacity to produce oil to 9m barrels a day (bpd) by the end of the decade as Baghdad rushes to bolster its economy, which is still shattered by war and internal conflict. Iraq was producing 3m bpd in December, according to the International Energy Agency.

Iraq's intention to challenge Saudi Arabia's status as the "swing producer" in the OPEC cartel could see a dramatic fall in oil prices if Baghdad decides to break the group's quotas and sell more of its crude on the open market.

Read the entire article here

William Browder: Putin's regime "will be gone within a year" when the price of oil falls to $60 a barrel

When the price of oil falls to $60 a barrel this man will be on his way out

US shale gas has already weakened Vladimir Putin's regime, but when the price of oil drops to $60 a barrel - which could well happen in the near future - the former KGB agent will be gone within a year:

There is nothing behind the facade of Vladimir Putin's regime in Russia, says William Browder from Hermitage Capital Management.
"All it will take is a fall in the price of oil to $60 a barrel and Putin will be gone within a year. You'd be surprised how brittle the system really is," he told me at the World Economic Forum in Davos.
The "fiscal break-even price" of oil needed to balance the Russian budget is now $117 a barrel. A protracted slump in crude would force the government to dig deep into its reserve funds, and that in turn would set off further capital flight.
The hedge fund manager – who describes himself as Putin's "enemy number one" – says Russia's $499bn foreign reserves would not prove much a defence in the end. "We saw this in 2008 when everything fell apart in a few months even though Russia had the world's third biggest reserves. It wasn't supposed to happen but it did."
A drop in Brent crude to $60 is not impossible. Both Deutsche Bank and Bank of America have warned of a potential glut in oil this year as sanctions against Iran are phased out and Libya's exports revive. The US is expected to add more than 1m barrels per day (b/d) this year. The Saudis may choose not to stabilise the market by cutting output, deliberately letting crude slide below the marginal cost of production of shale.

Read the entire article here

Greenpeace activists invade a Shell refinery in Denmark dressed in oil-based Polar Bear party costumes

Greenpeace activists dressed as polar bears have invaded a Shell refinery in Denmark this morning:

Shell’s oil refinery in the Jutland city of Fredericia was invaded by about 40 Greenpeace activists dressed up like polar bears early this morning.
The activists forced entry to the Dutch oil giant’s refinery just after 6am and a group of them immediately began climbing up one of the refinery’s large silos , where they hung a banner featuring an image of the well-known yellow and red Shell logo juxtaposed with a polar bear's face. --

The activist group in Fredericia includes Danes as well as individuals from Sweden, Norway, Finland, Italy, Germany and Latvia.


The Greenpeace polar bear squad:

Greenpeace activists from at least seven countries dressed in fancy Polar Bear party costumes made of oil derivatives. By the way,
did Greenpeace count the huge carbon footprints of the activists who took high carbon emission flights to Denmark?
(image by Greenpeace)

The greenies pretend to be saving the Arctic, but the only ones benefiting from their PR stunt are the  manufacturers (Chinese?) of their cheap Polar Bear dresses. The Greenpeace outfit is strikingly similar to this "Polar-Bear-Mascot-Costume-Fancy-Dress" sold by MadeInChina.com:

1.The deluxe costume is including head,body suit,gloves,shoes(a real boot,not only a cover)

2.It can fit 5'2"(160cm) to 6' feet (180cm)Weighing up to 180lbs.$30usd more if you need a larger size.

3.The body of this outfit is machine washable. The head can be Dry cleaned.

4.Discount accepted if you buy multiple costumes.

The "polyfoam material" used for the Greenpeace costumes is based on crude oil derivatives. The dresses could in fact be based on raw material from the Shell refinery in front of which the greenies are parading!

At least Greenpeace got a good discount for ordering "multiple costumes"! But did the Greenpeace purchasing department check that the costumes are not made by Chinese slave labor or children?

PS

If  Greenpeace "activists" still insist on wearing fancy party dresses, here is a much nicer Polar Bear dress for the next PR stunt:

The shale gas revolution is creating a new kind of 'peak oil'

The brand new Viking Line cruise ferry Viking Grace is fuelled by liquefied natural gas, meaning that sulphur oxide emissions will be almost zero, and nitrogen oxide emissions will be at least 80 per cent below the International Maritime Organization’s (IMO) current stipulated level. Furthermore, there is a reduction of particulate emissions of more than 90 per cent compared to the emissions from conventional diesel engines, while carbon dioxide emissions are also 20-30 per cent lower

“LNG can provide great advantages for our commercial customers as a future energy solution in transportation”
Marvin Odum,  President of Shell Oil Company 



The fast growing supply of inexpensive and environment-friendly natural gas (including shale gas and LNG) is rapidly creating a new kind of "peak oil". Energy giant BP is predicting that the demand for oil will slow down to just 0,8% a year up to 2030, only half the projected total worldwide energy demand growth rate. And there are experts who think that the switch to plentiful natural gas will cut crude oil's supremacy even more. 

Oil is already being priced out of power generation and industry, and the same is expected to happen in the transport sector: 

Trains, ships, and even aircraft are all potential targets, too. Buses powered by compressed natural gas (CNG) – LNG’s less potent older brother – already ply the streets of Dallas and other cities. Rotterdam and Singapore have both outlined plans to become a hub for LNG-powered shipping.

There’s plenty to aim at here. International shipping and aviation fuel plus road freight will account for about 15 million barrels a day of oil demand by 2035, according to the International Energy Agency (IEA). That is a quarter of the projected 60-million-barrel daily oil-for-transport pot.

LNG-powered ships are already a reality, even though the fleet is modest for now. A report by ship classifiers Det Norske Veritas last year predicted that 30 per cent of new vessels will be LNG-powered by 2020. Tankers that carry LNG are an obvious early target. Another classifier, Lloyd’s Register, said the use of LNG as a fuel will pick up from 2019 and could be as much as 8 per cent of global bunker fuel demand before 2025.

Airlines have yet to crack the LNG nut, but the first commercial gas-powered civil aircraft flight left Doha for London on Jan. 9 this year, fuelled by another potential gas-to-transport game-changer – jet fuel made from gas.

Read the  entire article here

Swedish economist: "Has Putin lost his mind?"

"Has Putin lost his mind?"

The Swedish economist and Russia expert Anders Åslund has written an excellent analysis of Vladimir Putin's recent energy decisions. Putin's strange measures contradict Russia's national interest, but the silver lining is that they will speed up the downfall of the dictator:
Putin's recent energy decisions are probably the most costly for the Russian energy sector since the de facto confiscation of Yukos in 2004, and they contradict Russia's national interests. Why did Putin do anything so harmful?
The most plausible explanation is that Putin's cronies want to rob Gazprom empty and turn Rosneft into their new slush fund. After one national champion has been robbed empty, a new one is created. But Rosneft is likely to fail as spectacularly as Gazprom. Because of Gazprom's unwise investment decisions, some people will extract tens of billions of dollars from Gazprom, while Novatek and Rosneft may pick up Gazprom's pieces for pennies after its collapse. This can be the robbery of the millennium.
If this is the case, corruption has gone completely out of all control. The recently exposed corruption cases of $100 million in the Defense Ministry, $200 million in the Glonass program and $500 million involving the funding of the APEC summit would appear to be diversionary maneuvers to hide the real catch.
Yet this cloud has silver linings. The extraordinary mismanagement of the Russian energy sector might actually speed up the country's economic diversification. The decline in energy rents will likely expose more corruption in the energy sector and weaken Putin's hold on power.
In all likelihood, Putin has just made the greatest mistakes of his political career. The biggest question is why Putin is carrying out this massive destabilization of his own political and economic regime. Has he lost his mind? Or does he desire destabilization to alter the nature of his regime?

Read the entire article here

IEA: U.S. to overtake Russia as biggest natural gas producer already in 2015

The International Energy Agency, which is supposed work for ensuring "reliable, affordable and clean energy for its 28 member countries and beyond", has for years now been a leading force in the international climate change propaganda machine:

However, the IEA now seems - at least temporarily - to have returned to its original task.The newly published World Energy Outlook shows that some people within the IEA understand the importance of the US-led shale gas and oil revolution. At a press conference in London even the IEA's warmist Chief Economist Fatih Birol had to admit that the United States will overtake Russia as the biggest gas producer by a significant margin already by 2015. And according to Birol the U.S. will become the world's largest oil producer only two years later. 

This is what the IEA says in its press WEO press release:

The global energy map is changing in dramatic fashion, the International Energy Agency said as it launched the 2012 edition of the World Energy Outlook (WEO). The Agency's flagship publication, released today in London, said these changes will recast expectations about the role of different countries, regions and fuels in the global energy system over the coming decades.

“North America is at the forefront of a sweeping transformation in oil and gas production that will affect all regions of the world, yet the potential also exists for a similarly transformative shift in global energy efficiency,” said IEA Executive Director Maria van der Hoeven. “This year’s World Energy Outlook shows that by 2035, we can achieve energy savings equivalent to nearly a fifth of global demand in 2010. In other words, energy efficiency is just as important as unconstrained energy supply, and increased action on efficiency can serve as a unifying energy policy that brings multiple benefits.”

The WEO finds that the extraordinary growth in oil and natural gas output in the United States will mean a sea-change in global energy flows. In the New Policies Scenario, the WEO’s central scenario, the United States becomes a net exporter of natural gas by 2020 and is almost self-sufficient in energy, in net terms, by 2035. North America emerges as a net oil exporter, accelerating the switch in direction of international oil trade, with almost 90% of Middle Eastern oil exports being drawn to Asia by 2035. Links between regional gas markets will strengthen as liquefied natural gas trade becomes more flexible and contract terms evolve. While regional dynamics change, global energy demand will push ever higher, growing by more than one-third to 2035. China, India and the Middle East account for 60% of the growth; demand barely rises in the OECD, but there is a pronounced shift towards gas and renewables.

Fossil fuels will remain dominant in the global energy mix, supported by subsidies that, in 2011, jumped by almost 30% to $523 billion, due mainly to increases in the Middle East and North Africa. Global oil demand grows by 7 mb/d to 2020 and exceeds 99 mb/d in 2035, by which time oil prices reach $125/barrel in real terms (over $215/barrel in nominal terms). A surge in unconventional and deepwater oil boosts non-OPEC supply over the current decade, but the world relies increasingly on OPEC after 2020. Iraq accounts for 45% of the growth in global oil production to 2035 and becomes the second-largest global oil exporter, overtaking Russia.

While the regional picture for natural gas varies, the global outlook over the coming decades looks to be bright, as demand increases by 50% to 5 trillion cubic metres in 2035. Nearly half of the increase in production to 2035 is from unconventional gas, with most of this coming from the United States, Australia and China. Whether demand for coal carries on rising strongly or changes course radically will depend on the strength of policy decisions around lower-emissions energy sources and changes in the price of coal relative to natural gas. In the New Policies Scenario, global coal demand increases by 21% and is heavily focused in China and India.

So far, so good, but where the warmist IEA errs, is in its projections for renewable energy:

Renewables become the world’s second-largest source of power generation by 2015 and close in on coal as the primary source by 2035. However, this rapid increase hinges critically on continued subsidies. In 2011, these subsidies (including for biofuels) amounted to $88 billion, but over the period to 2035 need to amount to $4.8 trillion; over half of this has already been committed to existing projects or is needed to meet 2020 targets.

With more than enough of cheap and clean natural gas and oil on offer, governments will not be  willing to waste huge sums of taxpayers' money on inefficient and expensive wind and solar power. 

BP partners with Russian dictator Vladimir Putin

The London-based oil and gas company BP has just made the probably biggest mistake in its entire history, when it announced its partnership with Russian dictator Vladimir Putin to oversee the Russian oil industry. BP's chairman was bullish about the deal (according to which BP first sells its 50% shareholding in TNK-BP to Putin's new favourite Rosneft, after which BP intends to use part of the cash to acquire a further stake in Rosneft):

BP's chairman Carl-Henric Svanberg said: "This is an important day for BP. Russia is vital to world energy security and will be increasingly significant in years to come. Russia has also been an important country for us over the past 20 years. Our involvement has moved with the times. TNK-BP has been a good investment and we are now laying a new foundation for our work in Russia.

"Rosneft is set to be a major player in the global oil industry. This material holding in Rosneft will, we believe, give BP solid returns. We consider that this is a deal which will deliver both cash and long term value for BP and its shareholders. It provides us with a sustainable stake in Russia’s energy future and is consistent with our Group strategy.

"Over the coming months we will work hard to complete the transaction and we look forward to the next step of deepening our already strong relationship with Russia.” 

Before sending congratulations to BP's Swedish chairman, it maybe useful to look at what the deal between BP and Putin actually means:

“By signing this deal, the highest levels of the Russian government, up to and including Vladimir Putin, are endorsing BP as the principal western partner of the Russian oil and gas industry,” Molchanov said. “This is a big, big seal of approval for BP by Moscow and it means no other company is going to have access to the corridors of power like BP does.”

-

Since 2004, Putin has been tightening the government’s grip on the Russian oil sector, moves that made it increasingly difficult for foreign producers to establish or maintain footholds in the country, said William J. Andrews, a fund manager at C.S. McKee & Co. in Pittsburgh. Buying TNK-BP from the London-based producer and the Russian billionaires who own the other half will transfer to Rosneft fields that accounted for about 25 percent of BP’s annual output worldwide.

“The Russians are nationalistic and are going to keep the oil reserves for themselves,” said Andrews, who helps manage $14 billion. “They don’t really have a legal system or a political system. It’s a dictatorship.”

Read the entire article here

The big danger for BP and its shareholders is that deals done with dictators (like Putin) are an extremely risky business. For some strange reason, Svanberg and his cronies appear to want to forget what happened just a year ago:

"Black-clad special forces raided BP's Moscow offices on Wednesday, deepening the British company's problems in Russia after its attempts to salvage an oil exploration agreement in the Russian Arctic collapsed.

The raid, a day after ExxonMobil signed a deal giving it access to fields BP had hoped to develop, was ordered to let bailiffs search for documents in a legal battle over BP's failed bid to partner Russia in the Arctic, a spokeswoman said.

But BP, which has a long history of problems in Russia, denounced the raid and said it feared the search could continue for the rest of this week.

"It is our opinion that the court order under which ... court bailiffs are now in our office has no legal grounds. The office's work has been paralyzed," BP Russia President Jeremy Huck was quoted as saying by Interfax news agency.

"We see these actions as pressure on BP's operations in Russia," he said."

No, instead of congratulating Svanberg and BP, we should send our best wishes to the other major oil companies, which now are without access to the corridors of Putin's power. That lack of access to a dictator will in the end be a blessing to these companies, who will be able to profit when the dictator is gone. And besides, in the age of the shale gas revolution, Russian oil is less interesting than most people thought just a couple of years ago.