An MBA in Hustling

Given the amoral utilitarianism of Russia's oligarchs it's not surprising that they would be willing and able craft what may very well become one of the only business schools that's more than a circle jerk rest stop for burned-out bankers and bored corporate types seeking to switch careers.
Learning how to deal with the prevalent issues of politics, bureaucracy and corruption is applicable not just to emerging markets, but to the developed world as well. Wherever there are puppet politicians there are puppeteers pulling the strings.
Furthermore, anyone who has worked for a large corporation understands the importance of successfully navigating office politics and greasing bureaucracy's palm to free oneself from its suffocating grasp.

clipped from www.businessweek.com A handful of top Russian business figures have created an MBA program that tackles the issues they faced themselves: bribery, relentless bureaucracy, imperfect laws. Skolkovo includes classroom courses in management theory, but invites dozens of guest speakers [and] might even invite an organized crime boss to talk about the challenges of management. Skolkovo faculty members say they avoid moral judgments, and offer no ready-made strategies for handling corruption and predatory practices. Among the patrons are some of the Russian business world's biggest names: Abramovich, the billionaire investor and owner of the Chelsea football team, donated 26 hectares (64 acres) of choice land outside Moscow for the construction of the gleaming $250 million campus, which has its own helipad. Skolkovo's training doesn't come cheap. Fees for a full-time MBA including accommodation, flights to India, China and the U.S. come to euro50,000 ($74,000).

Storm Before the Calm in Georgia

You know I'm rarely a fan of Purin's policies, but their retaliation to Georgia's attack on South Ossetia is a clear case of doing the right thing for strategic reasons. Sure it helps Russia in terms of securing invaluable alternative pipelines (precisely why they won’t get support from China, at least not for free), but at least Russia will be smart enough to utilize them once the situation stabilizes.

Conversely, the US is just now starting to even attempt to get any benefits from Iraq’s oil because we were so damn scared about giving credence to the hippie “blood for oil” propaganda. This is even though Iraqis desperately need the oil money, as well as help in creating modern machinery to extract and transport it. Naturally we should be able to pick American companies for this, and they should be compensated for their services. Does this help Exxon, et.al.? Of course – and the U.S. government too thanks to disproportionate taxes. Are the Iraqis better off? Indubitably, and they can solicit new bids once existing contracts expire.

For the world to call Georgia a small peaceful nation is a half truth – it is, in fact, quite small. Georgia was the original aggressor in this conflict, and Misha’s much-talked about Western education did him little good, as he was unable to predict the obvious outcome of attacking a region favored by Russia. While Russia certainly cares far less about collateral damage than Western nations, Georgians have been engaged in outright genocide for some time as anyone familiar with Ossetia will tell you.

Fortunately for the US and European propaganda machines, however, most people thought Ossetia was Borat’s whore sister until these recent news, and Putin with his sidekick doesn’t need much help in looking like a supervillain.

Of course while NATO and US can send over all the sideline troops they want, their commanders are [hopefully] not stupid enough, to actually engage Russia – in which case I’ll be blogging from the nearest nuclear shelter. A stern warning is all that the UN can give Russia, and Putin is well aware of this. As I said before, Putin’s activities over the past 2 years have really been testing the limits of his power, and now it seems he’s found an area of slightly more resistance than killing a former spy. All this means is that Mother Russia will wait for some time before officially adopting the new “independent” territories.

Unless the UN can get China to throw their full support behind them they have little alternative than to be angry spectators.

clipped from afp.google.com Russia's military said it would carefully monitor a "build-up" of NATO naval ships in the Black Sea, amid anger at Moscow's recognition of Abkhazia and South Ossetia , regions that broke from Georgian control in the early 1990s. "Certainly some measures of precaution are being taken.... Let's hope we do not see any direct confrontation in that," spokesman Dmitry Peskov said, adding: "It's not a common practice to deliver humanitarian aid using battleships." Russia's ambassador to NATO, Dmitry Rogozin, warned that any NATO attack on the Moscow-backed regions would "mean a declaration of war on Russia." In a departure from Beijing's usual firm support for Moscow, Chinese foreign ministry spokesman Qin Gang was quoted as saying: "China is concerned (about) the latest development in South Ossetia and Abkhazia." President George W. Bush said Russia should reverse its "irresponsible decision." Medvedev appeared unapologetic, saying on Tuesday: "We're not afraid of anything."

They never learn

Western firms will keep lining up at Russia's oil teat for a drop of black gold, no matter what they have to endure to get there, or how little substance they'll get from the deal before Russia thanks them for building the infrastructure by kicking them out on their ass and taking the enterprise over. I'm amazed at the gullibility and stupidity of these major corporations. You'd think they would learn after Sakhalin.
Ironically, in an earlier Bloomberg article BP stated they would love it if Gazprom bought out the current Russian partner's stake in the business. Right - because having a firm that has already established a clear policy on ethics in regard to foreign business (Page Intentially Left Blank) and is responsible for making billionaires out of most people in the government, including the current President, is a far better partner than 3 oligarchs who just want you to pay them off better.

clipped from online.wsj.com Robert Dudley, head of BP PLC's Russian joint venture TNK-BP Ltd, abandoned Russia Thursday for an undisclosed location after Russian authorities refused to issue him a new work visa. His move could mean that BP loses control of a company that accounts for a quarter of its global oil production and 19% of its reserves. Since the conflict between BP and its Russian partners dozens of TNK-BP foreign employees have been forced to leave Russia after difficulties renewing their visas. The company also has been subject to a flood of tax, police and other probes. In an interview, Tony Hayward, BP's chief executive, denied the dispute threatened the British oil major's presence in Russia. Western businessmen and governments had been watching the TNK-BP dispute for signs of the direction Russia was moving under Dmitry Medvedev, the new president, who has said he wants to improve the rule of law in Russia, especially for business. The fate of BP's landmark Russian venture was seen as a litmus test.

Russia doesn't get the irony...

Suing one of America's oldest banks for money laundering by the nation that pioneered money laundering as a reliable income stream for a financial institution after the fall of the Soviet regime. In all honesty Russia does have a point: BoNY did allow a little faux-pas to transpire and never formally paid Russia back (or bribed their lawyers with vodka, fresh chickens and potatoes which is an offer no longer on the table I am told) when this all happened. Of course the timing is not exactly a coincidence (as nothing in Russia ever is), but I'll leave that to the readers to guess.
Also - Ms. Edwards mentions how only "some" of the customers were carrying machine guns. Those are the legitimate clients who are concerned about losing their capital en route. It's the ones who sent their deposits without an armored escort that you need to worry about - they have enough notoriety that they don't even need to guard their wealth. Nobody is stupid enough to touch it. Incidentally, how is that Lucy and Peter Berlin are still alive and in good health?

clipped from www.bloomberg.com Russia Sues Bank of New York for alleged money laundering in the 1990s. Russia's Federal Customs Service is seeking $22.5 billion in damages from the Bank of New York Co., the world's second-largest custodian of investor assets, for alleged money laundering in the 1990s. A former Bank of New York vice president based in London, Lucy Edwards, and her husband Peter Berlin, who ran companies with accounts at the bank, admitted in 2000 to conspiring to use the bank to launder more than $7 billion from Russia. more than $7 billion moved from Russia through the bank, some on behalf of ``customers with machine guns,'' Edwards said in a statement accompanying her guilty plea in February 2000. A Russian court can as much as triple the amount laundered by the Bank of New York to calculate damages incurred by the Russian Government Shares of Bank of New York fell 75 cents, or 1.8 percent,

Suicidal Billionaire

Boris, you're getting a little too comfortable in Britain, saying things like that. Didn't you get the point when Scotland Yard dropped all the Litvenenko investigations that if England won't outright help Russia it at the very least won't get in the way. You better make sure UK has a damn good reason to keep you around, but I don't think there's much you can do. Better start planning the funeral.

clipped from www.bloomberg.com April 13 (Bloomberg) -- Billionaire Boris Berezovsky said he's helping to plan a revolution in Russia to overthrow President Vladimir Putin. `I am calling for revolution and revolution is always violent,'' Berezovsky said Berezovsky, 61, said he was in contact with members of the Russian political elite who oppose Putin and is helping finance efforts to oust him. The billionaire said today he wanted to restore democracy to Russia by removing what he described as a ``terrorist regime.'' U.K. authorities made a ``mistake'' in granting him asylum, Putin's spokesman Dmitry Peskov said `It is very hard for us to believe that London is granting asylum to a man who openly, being on British soil, speaking to British journalists, demands the use of force and violence in our country in order to change the existing political system,'' Peskov said. Russian Prosecutor General Yuri Chaika ordered a new criminal case be opened against Berezovsky

BP bends over for Putin

UPDATE on the Below:
BP did exactly what it was told (from NYMEX Newswire):
Russian oil company OAO Rosneft beat Anglo-Russian oil firm TNK-BP Holdings in an auction for 9.44% of Rosneft shares held by the bankrupt OAO Yukos, placing a winning bid only 1.2% above the starting price. Rosneft agreed to pay 197.84 billion rubles ($7.61 billion), less than RUB3 billion above the starting price of RUB195.5 billion.
A spokeswoman for the former Yukos management called the auction a sham, saying the sale was part of a drawn-out and deliberate dismantling of the oil group for the benefit of state-controlled companies and the Kremlin. “We believe the whole process is rigged,” spokeswoman Claire Davidson said. “This is thefirst stage in the world’s largest expropriation.”
Auction organizers defended the sale, however, insisting the deal was transparent and legitimate. “I think this was an open process,” said Nikolai Lashkevich, spokesman for Yukos’s
official liquidator. Analysts said TNK-BP appeared to have participated in the auction as a diplomatic gesture to Russian authorities, who have sought to present the sale of Yukos’s assets
as open and fair. TNK-BP’s participation may have been intended to give the auction a sense of legitimacy, analysts said.
--------------------------------------------------
Russia needed another bidder, so they brought in BP. Here’s what’s going to happen: BP bids, BP loses to Rosneft, BP magically gets a favorable contract soon after. The good news is that at least Putin is still putting up some form of facade to appear legitimate instead of just taking the assets outright. Ultimately he's just putting the final pieces in place for when he steps down from running Russia from the Kremlin to running Europe from Gazprom.

clipped from www.nytimes.com MOSCOW, March 23 — BP said on Friday that it planned to bid against the state-owned oil giant Rosneft in a bankruptcy auction for assets of the Yukos oil company BP is bidding in the auction Tuesday through a subsidiary of its Russian joint venture, TNK-BP, which is half-owned by Russian partners. some analysts speculated that TNK-BP had leant its name to the process to allow the auction to proceed in exchange for favorable treatment in other energy deals in Russia. For the auction to meet Russian bankruptcy rules, at least two bidders must participate. Until Friday, only the Rosneft subsidiary had formally expressed interest the same day TNK-BP announced the offer, Mr. Browne of BP was in Moscow for his second visit in three weeks the overseas management of Yukos, said the meeting between the chief executives of Rosneft and BP — the only two bidders — so close to the auction date could create the appearance of collusion.

Things are getting interesting...

…might be time to make a move. Long LNG.

Qatar Shows Interest In Natural-Gas Cartel
By JAMES HERRON, WALL STREET JOURNAL
February 13, 2007; Page A2

Qatar's interest in exploring the creation of an OPEC-like cartel for natural gas adds another major producer to a group that includes Russia and Iran. Even so, industry experts say the nascent effort faces significant obstacles, ranging from a fragmented market to a history of noncooperation among the world's biggest holders of reserves.

Russian President Vladimir Putin and Qatari Emir Sheik Hamad bin Khalifa Al Thani said yesterday, at a meeting in Doha, Qatar, that they wanted competing gas producers to cooperate more. Mr. Putin said he would send a team of experts to a natural-gas conference in Doha in April, where they would discuss details of building a cartel. (Putin is serious – he wants to control the world through power and is feeling unstoppable, which is why he feels freedom now to make open anti-American comments. Such words precede actions. Putin is on a Middle East tour for more than one reason.)

The leaders of Russia, the No. 1 gas producer in terms of reserves, and No. 2 Iran have been talking recently about creating a group similar to the Organization of Petroleum Exporting Countries, which manages its output in an effort to sway crude-oil prices world-wide. If such a group were formed, the inclusion of No. 3 Qatar -- a major producer of liquefied natural gas, or LNG -- would give it significant clout. (and the rest of the dominoes fall into place)

But forming such a group could be difficult. Sheik Hamad said he supported the discussions, but he was unsure whether a gas cartel would be able to command the same degree of market control as OPEC does.

Gas demand is climbing amid global economic growth and because it burns cleaner than other fuels. But gas markets are fragmented, in part because transporting gas overseas can be difficult, complicating efforts to form a single global market, like oil, in which a group of producers could hold sway. LNG, which is natural gas cooled into liquid form and shipped overseas via tanker, has moved natural gas closer to a world market, but it remains a small part of global use. (Except Russia has plenty of tankers ready to go and more being built).

Also, gas tends to be sold through long-term contracts. That means a cartel would have little influence on such arrangements, Sheik Hamad said in a press conference in his presidential palace.

Past efforts haven't led to significant cooperation among gas producers. Russia, Qatar and Iran are members of the Gas Exporting Countries Forum, which was formed in 2001 but hasn't met since 2005.

Jonathan Stern, Director of Gas at the Oxford Institute For Energy Studies, said Mr. Putin's talk of closer cooperation among gas exporters isn't the same as a cartel and "doesn't mean a price-setting or volume-setting organization." He said Russia and Qatar, as gas exporters, don't have much in common, and they have much more potential to be competitors, especially in the European market. (Putin can be a very persuasive person in dissuading competition and is more than willing to give generous incentives).

A spokeswoman for the International Energy Agency said a cartel that raises prices "will encourage consumers to reduce demand or switch to other fuels. This is particularly true for gas, which can be substituted with coal and nuclear." (Except coal is under attack in the US and nuclear has tremendous fixed costs, and impossible for developing countries that can still afford Gas/LNG).

Julie Reside, a State Department spokeswoman, said there has been talk of a possible "gas OPEC" for many years, with no result. "I think experience has shown that free and open markets work best for both producers and consumers," she said.

Russia has sparked concern in the West that it is using its vast energy reserves as political leverage. (No Shit) Mr. Putin has dismissed the criticism, and he has defended moves to raise gas prices on some customers as an effort to put market prices in place after years of lower prices. (That's why he's been doing it now and all at once, knowing full well that it would be ill received, instead of instituting gradual programs years ago).

Putin has a master plan. Russia will be getting very interesting this year leading up to the elections and beyond. Stay on the sidelines or get in the game, either way there will be fireworks and money to be made.

The New Gulags

A Forbes article on Khodorkovsky's Suffering

In many other countries Khodorkovsky would be seen as an unyielding martyr against the totalitarian establishment, or at least a figure worthy of sympathy – but in Russia the majority blindly support Putin and want his enemies squelched. The fun will really start this November as Russian “elections” get underway. The average Russian peasant does not want to worry about politics or the outside world – they would much rather submit completely to a strong authoritarian leader. The only reason that the Soviet revolution happened is because Czar Nicolai was incompetent and of insufficient character to rule with the requisite force. This is the most crucial ironclad fact of Russia – yet so many people continue to forget it or choose to ignore it, and always at a hefty price. Another example of someone who thought he could “save” the Russians is the American idiot from Forbes who got shot – while walking to the metro at night without bodyguards, but that’s another story.

cause for restrained optimism

Finally, Lukashenko has backed down like a good little lapdog:

With the European Union voicing alarm and criticism and Russia threatening an all-out trade war against its former ally, the two countries' presidents -- Vladimir Putin and Alexander Lukashenko -- held talks by telephone Wednesday. Soon after, Belarus' government announced the cancellation of the $45 duty, and Prime Minister Sergei Sidorsky announced he would fly to Moscow on Thursday for meetings with his Russian counterpart.A top Kremlin official said the decision was "cause for restrained optimism," but it remained unclear when pumping would resume across the 2,500-mile-long Druzhba pipeline network, which feeds Germany, Poland and other East European nations.

Now we can get back to your regularly scheduled exploitation of the West.

In other news, it looks like Delta may have found a White Knight in Northwest. Also Continental is apparently another United target. Here’s one possible scenario:
Northwest has preferred Continental shares and may be willing to sell them to United if it withdraws its hostile bid for Delta, allowing Northwest and Delta to merge smoothly.

Update: Putin's Hardball Felt on RTS

Russia's main equity index, RTS, dropped 6.7% today as Putin said that oil production may need to be scaled down as it considers diverting oil from Belarus completely. If this was to happen:

• All Russian oil companies will have to cut production because they don’t have enough storage capacity (Lukoil is down 9% today because of this).
• Belarus would be nearly bankrupted and have no energy and its government would be lynched.
• All countries serviced by the Druzhba pipeline would be screwed as well since Russia has no immediate way to supply them.
• After the new pipeline is built there’s no telling if Europe would still want anything to do with Russia.

Ukraine Redux

Russia Cuts off Belarus: NYT Link
In all honesty, I agree with Russia in that it should not charge former Soviet republics below-market rates. USSR is no more, and there are no reasons for these subsidies (as there were during communism, and especially during the Cold War, when Russia would give more money per capita to a Cuban/Vietnamese citizen than to its own). The mistake is that instead of instituting a program that gradually weans a country off the subsidized rates, which are often at over 50% below market, Russia decided to simply hike them in one fell swoop.
The problem is that the pipelines extend to Russia’s wealthy EU customers, and while they may let Putin play his games and assassinate a couple of expatriates with polonium – it’s all over when energy supply is at stake.
Russia’s strategy didn’t work well with Ukraine and it won’t work with Belarus – at least not without an undue amount of ruckus that will further strain relationships and loosen Russia’s chokehold over Europe. You can only push someone so far until they seek other (more expensive, but more reliable) contracts. The EU could always make Kazakhstan an offer that they can’t refuse, even though the country has sworn allegiance to Putin.
On the other hand, Putin is smart and cunning, if completely amoral. Surely he learned from Ukraine, so he must have some plan at work unless he is just completely drunk with power and wants to go on a bender before 2008 when he said he’ll step down (but remain “in a position where he can help the people” – that is become a puppetmaster.)
My guess: Putin no longer cares that much about how he’s seen by the West, he wants to give Gazprom as much power and reserves as possible then take control of the firm once he cedes his presidency. Only time and the markets will tell the truth.

I called it! Shell Offers to Cede Control. Of Sakhalin-2 to Gazprom

I’ve been saying that this would happen for several months now. It should have been obvious from Gazprom's actions. Why else would they have been building pipelines without devloping new fields and reserves? Shell has finally buckled as its kneecaps have been bashed by the mighty hammer and its head cleanly cut off by the sickle of Kremlin/Gazprom/Putin/Mafia. Now Gazprom can take a gargantuan new nearly finished field and get all the capacity it needs to deliver to China, Europe and maybe even its own starving people. Nobody can stop the behemoth, not until 2008 when Putin steps down, anyways.

Shell Offers to Cede Control. Of Sakhalin-2 to Gazprom
By GUY CHAZAN and GREG WALTERSDecember 11, 2006 10:18 a.m.
Royal Dutch Shell PLC, succumbing to months of pressure from the Russian government, has proposed ceding control of the $20 billion Sakhalin-2 project to Russia's state-run gas monopoly, OAO Gazprom, an official close to the situation said.
The move shows Shell scrambling to rescue a project that has hit numerous roadblocks in recent months, including threats by Russian officials to withdraw a key permit over alleged environmental violations.
The pressure was seen as reflecting Russian anger at the cost overruns at the project, the biggest single foreign investment in Russia, and comes amid intensifying efforts by the Kremlin to dominate the country's oil and gas sector.
Gazprom said Shell Chief Executive Jeroen van der Veer met Gazprom CEO Alexei Miller and Russian Energy Minister Viktor Khristenko in Moscow last Friday to discuss Sakhalin-2, and that Shell had put forward new proposals on the project to Gazprom. Neither company would give details of the proposals. A spokeswoman for the Energy Minister declined to comment.
Mr. Khristenko will hold a press conference Tuesday in Moscow, the ministry said, during which he will answer questions about Sakhalin-2.
Gazprom and Shell reached an agreement in principle in 2005 that Gazprom would take a 25% stake in Sakhalin Energy, which is 55% controlled by Shell. Gazprom had since publicly denied it was seeking a larger stake in the company. Shortly after the Gazprom and Shell deal was reached last year, Sakhalin Energy announced its projected costs would nearly double for Sakhalin-2, prompting Gazprom to say it couldn't make a final commitment on entering Sakhalin-2 until the cost of the project was confirmed.
Sakhalin-2, said by Sakhalin Energy to be the world's largest integrated oil and gas project, is developing oil and natural gas reserves off the coast of Sakhalin Island in Russia's Pacific Coast north of Japan.Japanese partners Mitsui & Co. Ltd. and Mitsubishi Corp. own 25% and 20% of Sakhalin Energy, respectively.

Russia Coming to America

One of Ambramovich’s more legitimate enterprises, Evraz Group SA, purchased Oregon Steel Mills for $2.3B, making it the biggest acquisition of a US company by a Russian one. I predict and hope this is the start of a trend. Why is this great news? Two reasons:
First, if Russians own American companies then the US can do the same shit to them that Russia does to its foreign investors. That is, coming up with phony violations and injunctions until the foreigners succumb to any and all demands. Not that any US party has the balls to actually do that outright, but it’s nice to know the possibility is there, and if American interests are oppressed far enough who knows what can happen. Anything that can possibly put a check on Putin’s despotic regime is a good thing.
Second, in order to buy out a public company or (better yet) take majority stake in a public company the buyer has to bare a certain amount of information. There is nothing better then thus subjecting Russian companies into exposing themselves, even if they’re only showing a leg. If this trend picks up the bra and the thong will come off soon enough. It’s a lot harder to trick/bribe the SEC (and US auditors in the wake of Sarbox) than the Russian government, so some Russian entities may actually have to clean themselves up to look presentable and legal. This would likely involve shaving some of the dirtier activities have heretofore been hidden from the public eye.
So even if I didn’t see these transactions as great opportunities for cross-border special situations arbitrage I welcome them, and hope they increase exponentially.

Litvinenko can't escape the KGB

Well it wasn’t Gazprom per se, but Russia’s mighty sickle has struck again – poisoning former FSB (Federalnaya Sluzhba Bezopasnosti or Federal Security Service) operative Alexander Litvinenko currently living (or, rather, dying) in London. The current incarnation of the KGB dubbed SVR (Sluzhba Vneshney Razvedki or External Reconnaissance Agency) stated “We have nothing to do with what happened to Litvinenko. The Russian secret services have not in a long time carried out poisonings or any form of assassination.” Well, obviously we wouldn’t expect them to outright admit it – denying obvious treacheries with rice paper thin cover ups is what Putin’s administration is all about. I mean, according to them Khodorkovsky (former CEO of OAO Yukos) is having a wonderful time in his Siberian prison (nevermind that he got sent to solitary for a week after the guards found he had some “unauthorized lemons” in his possessions).
Litvinenko, a critic of Russia’s policies, got sick immediately after a lunch with two SVR members. They were supposed to discuss Litvinenko’s investigation into the murder of a fellow dissenter - Anna Politkovskaya. One of the men was “Andrei Lugovoy, a former KGB bodyguard and one-time head of security at a television station owned by the Russian billionaire, Boris Bezerovsky” [telegraph.co.uk], whom Litvinenko knew – but the second man, as yet unidentified, was someone Litvinenko had never seen before. Berezovsky visited Litvinenko twice and agrees with the dying ex-agent as to whose hands are awash in blood.
A toxicology analysis found the culprit to be thallium, a colorless and odorless chemical similar in composition to salt. The former agent’s “bone marrow has failed and friends say he has visibly aged 20 years and lost all his hair. His immune system has been severely depleted and he has suffered severe kidney damage.” [gulfnews.com] Doctors say he has only a 20% chance of survival.

Before and After:

Who will Gazprom assasinate next?

After this cheeky bit of news:

“The head of a Russian fund that says it promotes the development of small oil
and gas producers was shot dead on Tuesday in southwest Moscow, the Reuters news agency reports. Zelimkhan Magomedov, 50, general director of the National Oil Institute Fund, was shot twice in the head.”

One simply has to wonder - who will be next? Will it be…

Arkady Ostorvsky for making the below comment in his article in the WSJ:
"Gazprom, the dominant gas supplier that frequently doubles as a Kremlin foreign policy arm, is not producing enough for an economy growing at more than 6 per cent a year. "

Vladimir Milov, head of the Institute for Energy Policy, for making the following comment to the media:
"Gazprom was given enormous privileges in exchange for providing the country with gas at regulated prices. If it wants to behave as a commercial company, it should not be a monopoly."

German Gref, minister for economic development and trade for implying Gazprom should be “independently regulated.”

Analysts at UBS Russia for questioning Gazprom’s strategy.

“Analysts say the problem is not the lack of gas - Russia has 16 per cent of the world's total reserves - but rather Gazprom's investment strategy. Over the past few years the company has spent vigorously on anything but developing its reserves. It has built a pipeline to Turkey, taken over an oil company, invested in UES and tried to gain a foothold in European distribution markets. All this was in the name of creating a national energy champion. But investment in Gazprom's core activity was inadequate.”

Why has Gazprom not been investing in developing fields? Because it’s going to take Sakhalin away from Shell (who has already done all the work).

The citizens of St. Petersburg as they re-experience the horrors of WWII when their city loses heat in the middle of winter.

The country of Turkmenistan for not supplying enough gas and quibbling with the Allmighty.

Chechnyan Warlords (or random Georgians who will be dressed up to look like Chechnyan warlords) who will then be blamed for the gas shortage as well as every other problem plaguing Russia at the moment.

Always seeking to profit from energy arbitrage, I am relocating some of my freelance monkey snipers (alluded to in the previous post) to Russia.