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Forums - Politics - Miracle or not, Putin on course to win in Russia

mai said:

Kaz, again:
1) Did I explain why there's a limit to oil production growth in Russia?
2) So if 30% is enough to harm the industry as you say, why 70% is not enough for it to prosper. Logic?

You know I could go on and on and on with posting oil production rates for each country with different balance of govermentally and privately owned assets troughtout last 50 years, and you still won't able to defend this point. If there's be some soild point, it'd have showed some consistency given other things are equal.

BTW you kinda proved it for yourself by posting Saudi's chart :D Correct me if I'm wrong, but govermentally owned Saudi Aramco is like entire Saudi's oil industry, no?

1) No, you suggested however it wasn't related to the government and hinted at avaiablilty.

2) Already stated.  Why work when you run the risk of the government seeing what you have and taking it away.

3) How does the fact that Russia's involvement in the oil markets greatly stifled producction have any relevence to Saudi Arabia, who focuses on and cares about oil production?   That Russia took over and botched Oil in Russia caring only about what they already had (and likely could pull out of it) not wanting to invest any capital in things that private companys were previously investing capital in.

My statements weren't about broad socialism vs capitalism cases.  Afterall, nothing gets something done faster then a heavy handed like central government authority... when said government WANTS to do something bad enough.

However, when the plan is to just take over whatever is most successful, that tends to create a situation where others keep there heads down.


Lets put this into hypothetical format and see if it's easier for you to conceive.

'

Say you have  10 widget making buisnesses, and the government decides to take over the top 3 widget making buisnesses and forcibly nationalizes them because they are the biggest and most successful then stops expanding their buisness.

As one of the 7 remaining widget makers... which of these sounds like a better idea to you?  Keeping your head down and making the same steady profit until they catch up with you, or increase widget making, make more money, become really successful, and have the government take you over because you've done almost as well as the previous 3 they've taken over?

 



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Kaz, forcibly? Rosneft and Gazprom are govermentaly owned enterprises from the beginning (basically they're reorganized USSR Ministry of Oil and Gas Industries respectively minus big chunk of privatized assests). Or do you mean Yukos case?



mai said:

Kaz, forcibly? Rosneft and Gazprom are govermentaly owned enterprises from the beginning (basically they're reorganized USSR Ministry of Oil and Gas Industries respectively minus big chunk of privatized assests). Or do you mean Yukos case?

Not just the Yukos case.  Though Yukos is one of the bigger ones.  Another example is the Royal Dutch Shell issue.

Oil companies have greatly reduced investments in Russia and other countries like it, preferring to go with countries that are considered "safer" because the worst possibilites are terrorist bombings.

Not to mention areas that have been marked essentially "government only" like all offshore drilling.  Which is why Putin is bending over backwords to try and convince companies like Exxon to take a minority stake that could be taken from them at any time... and why such companies have been so heasitant.

Compared to say, if the US opened up it's artic reserves they'd have to fight off companies with a stick.

Even Putin himself has agreed that such polices have harmed oil production!

http://online.wsj.com/article/SB10001424052702304444604577341661762038968.html



^So you've practically lost the argument 'nationalization = stagnation' and silently replaced it with 'Yukos and whatever = lack of investment', ok then :D

 

It seems I get your confusion and why you're trying to throw in any sort of argumentation into this despite how far-fetched it might be. Mind I remind you some detials of Yukos case. 1) Yukos assets have been sold to numerous companies, not necceserally only to Rosneft (here goes your nationalization argument), 2) the whole story is overly dramatized in the West and in certain groups within the country, mainly for the reason to have a leverage by influencing public opinion through mass hysteria media, presenting Khodorkovsky as a victim of a regime, prisoner of conscious and whatever other epithets he receives, i.e. trying to wash a black nag white, and dozens of other memes among which are yours 'Putin terrorize business' and 'this will only harm the industry bla-blah-blah' :D

Again a very much political point. The actual reason behind hysteria over Yukos case is simple. In 2004 goverment revised a lot of Yeltsin's PSAs that basically lobbied interests of selcted companies, i.e. crossing the path to a lot of industrial bigwigs from abroad.

BTW in your country the court do not put responsible people who falsify offical documents and don't pay taxes to jail? Did, say, Enron case hurt so much that other prefered to "keep their heads down" and the industry practically "stagnated"? ;D

 

And since you've raised the issue of investment, well, foreign investment is Putin's idee fixe. Personally, I find it stupid mainly for the reason you can't win a cheater in his own game, I'd have opted for bigger self-investement projects both private and govermental. The point though is the same as with oil production: investment (total and foreign) are up with a single decrease the same year the oil production slightly dropped, in 2008, for exactly the same reasons obviously.

Say, here's  foreign investment (billion of USD):

1995 3,0
1996 7,0
1997 12,3
1998 11,8
1999 9,6
2000 11,0
2001 14,3
2002 19,8
2003 29,7
2004 40,5
2005 53,7
2006 55,1
2007 120,9
2008 103,8
2009 81,9
2010 114,7

Source: Rosstat

The oil industry is the main one to be invested along with consutruction building and banking. Though big part of these investment is domestic capital that was shit-scared by the global 2008 events, but eventually turned back (it's obvious if you look at the top countries that invested in Russia like Luxembourg and Cyprus, lol, which are popular offshore zones).



So... Putin humself saying nationalization laws hurt oil production is losing the nationalization arguement...

ooooook.

 

I mean your arguement here seems to be "Putin didn't hurt Russian Oil production by re-nationalization because renationalization doesn't always mean oil production is hurt, even though he clearly hurt investor confidence, and even signed laws that have kept oil companies from finding, which he himself admits."

 

It's great that you favor more government investment.  That's... completely irrelevent to the point at hand.

At this point you aren't argueing that Putin didn't stagnate oil production.

Your argueing he could of taken steps to have prevented his stagnation of oil production.

Except...

He didn't.

 

The general problem seems to be... once again, your creating your own belief about what this arguement is about.  Trying to create some broader meaning when it essentially boils down to "Putin has botched key areas of the economy by stifiling private economic growth through renationalziation laws without anything replacing it."


A  point you yourself are now argueing.



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Kasz216 said:

So... Putin humself saying nationalization laws hurt oil production is losing the nationalization arguement...

When did he say this? Give me a quote, I'm to lazy to subsribe for WSJ just for that.

I mean your arguement here seems to be "Putin didn't hurt Russian Oil production by re-nationalization because renationalization doesn't always mean oil production is hurt, even though he clearly hurt investor confidence, and even signed laws that have kept oil companies from finding, which he himself admits."

For starters it'd be great if you could counter hard facts I presented of oil production and investement goes up in order to make your point more effectively. Nor you defined in any way what did you mean by oil industry re-nationalization? Give me facts, when and what's been nationalized, value of nationalized assets, overal size of the industry at the time etc. Otherwise no point in continuing the discussion.


A  point you yourself are now argueing.

How about you stating your point clearly? I'm tired of thinking what you could have meant by this or that?