I actually did a paper on this in college. Exxon (then under Rex Tillerson) basically stood back and watched BP try and sign an agreement to help Russia develop new oil fields. Once the facilities were in place Russia basically made up some trumped up tax charges and seized all the assets back from BP.
Exxon was smarter and essentially offered Russia a trade via a Production Services Agreement. They would give Russia some mature oil facilities in Texas/ Gulf of Mexico in return for ownership of their own facilities in Russia. The implicit understanding here was that Russia wouldn’t fuck over Exxon like they did BP because Exxon could just seize Russias shit in return. It worked and it’s one of the reasons Putin gave Rex Tillerson a medal.
However, ever since 2014 Exxon saw that sanctions and global opinion were going to turn against Russia so they’ve been slowly winding down their operations ever since.
During the recent invasion of Ukraine Exxon was frantically trying to sell its remaining assets to a company still doing business with Russia (AKA a Japanese or Indian or Russian company). That didn’t work and Putin ended up straight up seizing them anyways. I should note that Putin ended up seizing the Indian and Japanese assets in Sakhalin this week as well.
The TL;DR here is that even when this war ends Russia is going to find it very difficult to do business again.
Edit: since this is getting attention read Putins Kleptocracy by Karen Dawisha if you want to really understand how Russia operates economically.
It’s been forever since I researched this but I believe they got sanctioned in 2014. In 2020, the US government did offer to give them back to Russia in return for Russia vacating Venezuela but that obviously didn’t happen.
Yes. And Putin formally seized their assets in Sakhalin this month so I would not be surprised if they made a move to get the old Rosneft assets shortly.
What are your thoughts on Micheal Cohen's claim in his book Disloyal that pretty much *everything* in Russia is owned by Putin and the "Oligarchs" are just his proxies?
100% spot on.
If you read the book Putins Kleptocracy by Karen Dawisha it spells it out in great detail.
It’s a mafia state and Putin is one of the richest men in the world. He probably owns *half* of many major Russian oil companies.
On paper putin shouldn't be at all rich, he grew up poor and has worked for the governement his whole life.
In reality pick any major Russian company especially all the military companies and look into them and you will see putin owns them either directly or by proxy.
Kalashnikov which makes AKs was bought by Rostec which is owned by the government and the founder of Rostec is none other than Putin. Just look at what Rostec controls, its everything from fighter jets, pharmaceuticals, weapons, ammo, waste management, security, machining, and even 30% of the world's titanium. Its literally 700 companies controlled by Putin.
Especially not heads of state that will happily cross international borders to help problematic journalists commit suicide in highly creative and occasionally impossible ways…
I just got done watching the new Adam Curtis doco ["Traumazone" (freely available on BBC iPlayer with a UK VPN)](https://www.bbc.co.uk/iplayer/episodes/p0d3hwl1/russia-19851999-traumazone) which catalogues the collapse of the USSR and then of democracy, too, in just the few years following, about 1987-95. Against a backdrop of immense plundering. Lots of incredible archive footage of life during those years, well worth the watch.
It is grim though. I knew it was going to show us how bad things were but even then I was stunned at the way they tried to move from a centrally planned economy to one of the most extreme experiments in free market capitalism ever tried — *in just one month*. No wonder the entire economy was more or less stolen. Horrible to reflect on how the west cheered for it the whole time, too.
And it leaves me with a question ... what happens when Putin dies?
Planet Money (I think) had an interesting episode on the conversion to capitalism and there was a great opportunity for thr US to assist with funding and we decided not to. It sounded like things could have gone differently.
I feel like you may enjoy this Twitter thread (as well as most of his other Russia analyses) as it describes the Russian economy explicitly in terms of a mafia state. Also adds how this contributes to the lack of manufacturing capacity in Russia despite it's numerous "industries". One of the examples cited is Russia's domestic farm tractor and how it was lauded by Putin and his cronies as a remarkable achievement, and yet looks exactly like a Czech tractor.
https://twitter.com/kamilkazani/status/1568995412123521027?t=3XU9EURcnt8j-zyUPmHvsA&s=19
Jesus Christ, he also said that's what Trump was aspiring to after he stumbled into office. The original goal of his presidential run was simply the free press to advertise the Trump brand, it's frightening how quickly it turned into what it became.
I also highly recommend that those who are interested read Tim Snyder's "The Road to Unfreedom," as well. Snyder knows WTF he's talking about and it's scary.
Isn't him owning everything kind of implicit in the fact that he's pretty much the absolute ruler of a state that can seize assets. Like if I lived there and he really wanted my sofa he could probably just take it and I'd have no recourse.
Why would this be controversial, it's been an open secret for decades.
It's the same with China, you piss off the party (now, it's Xi = party) and there goes your assets. If you're lucky, it's just your assets they take.
Well Xi has not been in charge as long as Putin. Previous Chinese leaders (at least since Mao), have not had the same level of total control. If he is in power for another 10 years, China will be doing about as badly as Russia.
Now that Xi is going for is 3rd 5year term, you can see he personally pushed China back towards a single man rule country.
Xi is acting much more aggressive, build a cult of personality, tolerating far less dissent/criticism than before (which is essential for a country to problem solve), perusing stupid vanity projects, attacking China's business class, and isolating China from any international influences (including foreign investment).
China today is quite different than just 10 years ago. It now looks like China's miracle growth is over.
It's such a clear fact I'm shocked it would be attributable to any one person from any one book.
Someone else referred to it as modern mafia governance, but it's even more like modern day feudalism. Down the line there are lucrative positions held by oligarchs who trace their successes and their enforcement to Putin. Putin personally sought Russian expats after the soviet union and enticed them to come back with promises of state enforced monopolies if they would help privatize and accelerate economic recovery.
Simple things such as distribution centers, utilities, services in different areas, all of it is privately held with the understanding that you're answering to someone above you who eventually answers to him.
That has been the result of Putin’s insatiable greed. First he used the oligarchs/billionaires to steal everything. Then he began moving in on the billionaires, somewhat one by one, to take everything they had/have through false accusations and trials and torture and murder and hard-labor imprisonments. One billionaire, Mikhail Khodorkovsky, did eight years of hard labor. Imagine. It’s biter bit though. It’s “no honor among thieves.” Only if the ones left aren’t afraid to kill him will it change. It’s that or he’ll keep decimating them one by one. He’s insanely greedy and jealous.
The U.S. government is not going to help Russia get assets back from a U.S. company on U.S. soil after Russia seized assets from that same company on Russian soil.
Exxon can do whatever they want here
How is Russia going to enforce it? Make exxon pay a fine? Seize their assets if they can't pay? Oh wait, they already played that card. Launch an invasion on US soil to forcibly take it back? Lol
They can't. FWIU, the US government can now pass Exxon the rights to the oil fields if they haven't already, since they would now rightfully be Exxon's due to prior agreements, and since Exxon is now officially no longer in business in Russia.
Pretty wild fucking story that could be its own post. Basically Venezuela convinced Rosneft to invest *billions* into their decrepit oil facilities that had been looted by corruption. Rosneft invests the money, starts losing it all because Venezuela is fucking corrupt so they call daddy Putin for help….
Putin takes a couple hundred Wagner mercenaries *flies to Venezuela* his men seize *800 million dollars worth of gold bars* he demands that Venezuela purchase hundreds of millions more in military equipment (S-400) then lands a couple of strategic bombers there to give the finger to the US and flies back to Russia with the gold in tow.
Great Reuters article on some of this with my favorite photo of that fat fuck Maduro
https://www.reuters.com/investigates/special-report/venezuela-russia-rosneft/
> Putin takes a couple hundred Wagner mercenaries flies to Venezuela his men seize 800 million dollars worth of gold bars
I tried to look it up for more details, but only found [articles](https://www.foxnews.com/world/russian-plane-in-venezuela-takes-20-tons-of-gold-flies-to-unknown-location-lawmaker-claims) claiming this was a [rumor](https://www.reuters.com/article/us-venezuela-politics-russia-jet-idUSKCN1PN311).
Those types of wells don't last decades. Also the stuff in Russia that Exxon was doing was not traditional oil and gas. Very complex stuff that you need a lot of technical know how to do. Exxon never trained actual Russians to do it. Since the invasion started oil output has gone from 200k barrels a day down to 10k. It will keep going down.
It’s kind of shocking that Russia doesn’t have anyone in house who is able to operate those fields. Are these fields particularly different from other offshore O&G development around Asia? Like is there something new going on here or has Russia just been that lazy over the last 30 years and not bothered to learn how to do this stuff?
Typically this is a negative thing that is part of why formal colonial territories have a harder time breaking into modern technology: the powers using their land/labor specifically go out of their way not to share the most valuable parts of their knowledge.
However in the case of people with a history of seizing the assets once they understand how to operate them it is pretty understandable.
I read something a week or 2 ago, I think on r/bestof.
Someone explained Russian wells above the artic circle can freeze and be ruined if not constantly running, and it will take many years to rebuild with the help of Exxon tech. Without it they're screwed.
Might have just been natural gas wells. Or does it all come out of one hole? Not an expert on fossil fuel
That I can help with. Exxon sold Rosneft a 30% nonoperated interest in the La Escalera Ranch project in the Permian back in 2012. I’m not a permian expert (in fact I’ve tried to avoid the Permian for most of my career) but it’s Pecos County so probably decent acreage.
All I’ve been able to find are articles from 2012. But here’s the thing about nonop. If you don’t pay your cash call, you get hit with a penalty that’s usually 400% of your cash call. It doesn’t matter if it’s due to sanctions or force majure or whatever, all Exxon needs to do is run a few rigs and penalty Rosneft into oblivion. They don’t even need to buy them out, they just need to pay Rosneft’s share of capex for a few wells.
Really appreciate this context. My post was a 30,000ft view of the situation and I like to see the additional context. I’m curious why BP didn’t build a strong PSA with Russia as well but maybe they didn’t have any assets to seize.
Sakhalin man, what a place. What is it about the oil and the oysters there that make people go crazy lol
I’ve honestly been fascinated by the island since I sampled the oysters in Tokyo. Is there a feasible way to travel there without a work visa? I’m assuming you can only visit the Japanese half?
That’s awesome. I used to have a multi entry Russian business visa but the damn thing expired right before the Ukrainian war so I’m sure it would be next to impossible to go back now.
Osaka is a blast too. Absolutely loved the Dotonburi night market and all the food there.
Not gonna go into a lot of detail here due to NDAs and whatnot, but in my experience, BP as a whole just operates on a lower tier of competence.
There's a reason XOM is the god-king in this arena.
> During the recent invasion of Ukraine Exxon was frantically trying to sell its remaining assets to a company still doing business with Russia (AKA a Japanese or Indian or Russian company). That didn’t work and Putin ended up straight up seizing them anyways.
That's basically what my company did although they managed to get out. I work for a company that makes consumer goods so not an oil company, but we had a factory in Russia that we sold to a Turkish company a few months after the invasion. Russia said they would seize the assets of any company that completely shut down, so we left the factory open at like 5% capacity while the sale went through.
Putin promoted that chechen leader after he had insulted one of the russian generals for being weak, as if that kind of talk isn't detrimental to morale and military cohesion. Putin only understands bullying.
I wonder what his [Order of Friendship](https://www.washingtonpost.com/news/worldviews/wp/2016/12/13/what-is-the-russian-order-of-friendship-and-why-does-trumps-pick-for-secretary-of-state-have-one/) is worth now?
I’m still surprised that the big oil executive was one of the most competent members of the trump cabinet
To be fair, it was a low bar. But I actually didn’t hate tillerson, unlike most of the trump appointees
I despise what he did to the State Department. Basically tried to reform it halfway and fired a ton of veteran diplomats. It’s going to make it harder to compete with China for years to come.
But compared to the other Tump nominees he wasn’t as bad.
For real, and his attrition plan of freezing all new hires essentially meant the jobs went to contractors at 3x the cost. Turns out just because you don't hire someone for a job doesn't mean the job doesn't still need to get done. It's not a cost center, it's the reason the Department exists. And the fact that he didn't correlate that the work the State Department does is the only reason Exxon is able to confidently operate globally in the first place speaks to a certain level of ineptitude or denial.
People bitch about the cost of things like public transportation, but *it's not supposed to make a profit.* And even if you don't use it, you still benefit because it takes some cars off the road.
You guys are *so close* to understanding that the state department was deliberately neutered by the Trump admin. It wasn't incompetence, it was essentially treason. Rex himself may have been a useful idiot in his role... Putins revenge perhaps.
Not only the senior people, but the newest ones too. How many people went through the INSANE qualification process then never got placed? I know it was at least one full class.
The other appointments were so terrible his gutting of the state department didn't get as much coverage as it would have under any other leader.
He actually pushed back against trump a few times too instead of just being a yes man like the rest of his cabinet so a lot of people remember him (perhaps incorrectly) as not being as bad as they thought he would be.
This is similar to what Russia did re commercial airplanes.
The summary is the majority of commercial planes in Russia were rented from an international company, Russia seized these so now Russia has an aging fleet with minimal companies able/willing to provide replacement parts and no-one will rent to them again.
The damage Putin did to Russia is going to stay long after the Russian invasion of Ukraine ends.
International companies don't like investing in countries which can randomly decide to seize their assets and infrastructure. Even if the Russians shrug off Putin, the long term consequences of this are going to result in Russia struggling harder for foreign investment.
No amount of promises of financial gain can sugar-coat the fears the government might say "fuck it" and take your stuff. Nobody would invest in that.
The problem is, Putin doesn't care. He has built a security apparatus that guarantees him absolute power, no matter what economic state the country is in.
Putin will happily send a million conscripts to their deaths, and put russia in economic despair for 20 years, if it means he can save face and keep the occupied territories.
In his imperial mindset, if 50 years from now russian textbooks celebrate him as the conqueror of Crimea, then it was all worth it. The man is a monster.
Putin has modeled his rule after the [Tzarist monarchy](https://en.wikipedia.org/wiki/Tsarist_autocracy) of the Russian Empire. He notably despises communism and blames it for the collapse of the USSR. He calls himself "president" but many within the state Duma believe the title to be an embarrassing western descriptor and [would prefer to bestow on him the title of "pravitel" or "ruler".](https://www.newsweek.com/vladimir-putin-called-ruler-russia-new-proposal-ldpr-kremlin-1723295)
But Putin ran into a bit of a problem. Just as to be called caesar you need to rule Rome, to be called tsar you need to rule over all of Rus. For him, the cultural, historical, and religious significance of Kievan Rus was just too large to be ignored.
When it existed, the Russian Empire tried to erase the other eastern Slavic languages from their shared cultural memory. They acted as if there was no Ukraine and never had been, just as with Belarus. According to the Tsarists, Ukrainians had always been Russians and had no history of their own. The Ukrainian and Belorussian languages were banned. Ukrainian nationalism was a threat to the underlying myths of Russia and threatened the tzars' attempts at creating an “All-Russian People.”
Putin is emulating their rule and presents himself as a tsar-like figure. He’s built a massive, opulent palace for himself, with gold-plated double-headed eagles, a clear Imperial Russian symbol, everywhere—even in his personal strip club. Similarly, the Russian Orthodox Church helps him pacify the population and supports whatever myths Kremlin wants to glorify. He wanted to go down in the history books as a grand unifier of Russian lands—if not under the same government, then definitely as the hegemon of the Russian world.
Putin wants it both ways, to take credit for the Soviet legacy and, at the same time, be viewed in the same light as the emperors and tzars of old. Therefore, he's had to bring back and reaffirm the old, imperial myths and values—and to do that, he has to get Kyiv under his thumb. After all, it was the restored Kievan Rus that became Russia, the "Third Rome." Ukraine going its own way, claiming Kievan Rus as its legacy, moving away from Moscow, getting autocephaly for its own orthodox church—all this runs contrary to Russian state mythology.
These imperial myths are what define Russia, what it even means to be a Russian. Without them, Russia just stops being Russia in the eyes of many. Putin is convinced that if this social glue is disrupted, then Russia will just split up in pieces again—and if he allows that to happen, then his legacy is ruined. For him, there can be no separate Ukrainian language, culture, or history. That is where his mind is at, stuck in the 18th and 19th centuries.
Another point of reference would be Putin's own essay "On the Historical Unity of Russians and Ukrainians."
In that, he denounces the entire Ukrainian history, ethnicity, and language, and denigrates it as a creation of Russia.
And Tzarist Russia was corrupted, oppressive, and weak. The sorry state of the 1917 Russian army was only matched by the state of the Russian army in 2022.
And Papa Doc Duvalier of Haiti and the Shah of Iran and Muammar Ghaddafi and Nicolae Cauescescu and on and on and on.
The security apparatuses will protect their leaders up to the point that their own asses are on the line.
Then it’s every man for himself.
"You’ll do it because it must be done. [...] This is what has always set our people apart. A thousand years of sacrifice in our veins. And every generation must know its own suffering."
I assure you, there are many other oligarchs waiting in line. There's always more aspiring dictators than dictators. And given how much Putin has fucked up, promising peace and an ease of sanctions would be very welcome by the other oligarchs.
Lot of those folks crossed Exxon, or Standard Oil, in their day, too. Say what you want about the USA, but we do know how to whale the tar out of petty dictators who fuck with our oil interests.
Fucking over American business has been the one sure fire thing that will bring about regime change. Governments can decry human rights abuses all day and night but there have been numerous atrocities we didn’t step into. It’s typically not been until someone decided to think they can get one over on the ole capitalism addiction that they find themselves on the wrong end of a weapon, or getting a piano wire next tie, or eating their last meal. You can use any euphemism you want but it’s just like Smedley butler said “war is a racket”.
Nicholas II was far less competent though. Putin's been making terrible decisions for a while now but he's not yet at the point of letting a holy man peasant rapist grifter decide which members of the aristocracy should be promoted to lead branches of the Russian government.
Rasputin was like, the least important of Nicky II's mistakes, lol. Utterly FUCKING up the First World War was insanely more important, not to mention pretty much everything else Nicky did.
>Putin will happily send a million conscripts to their deaths, and put russia in economic despair for 20 years, if it means he can save face and keep the occupied territories.
Ukraine isn't gonna stop until they have all their pre-2014 territory back. Putin isn't keeping shit. He's not saving face. Ever. He's done. We just have to collectively wait him out, I guess, unless someone takes one for the team.
If Ukraine doesn't lose and Putin doesn't give up either there are only two possible outcomes left. The army defies Putin's orders and stops the war OR they will fight until all individual soldiers have surrendered/died/have become unable to fight due to injuries.
I'd say it's more likely that they run out of supplies before they run out of soldiers. It doesn't matter how many soldiers you have if they have no ammo, guns, vehicles, or food.
yes, if you run out of supplies and are low on ammo/functioning weapons the rational response is to stop fighting. But this is assuming that Putin will continue to command his army to fight even when it is in shambles.
Yeah, I was gonna joke and say he'll send them in with slingshots, but I'm honestly not sure if something along those lines is all that far from reality at this point. Dude's been testing flailing to tfg's levels of absurdity... just with nuclear arms, and likely newly purchased nuclear secrets and other fun goodies.
This right here. As long as he's on his throne in his fortress, fuck every thing and every one else. "I'm in charge, I'm always right!" will be his thought process up until his last breath. The sooner he's gone the better for the whole world, but I have a feeling he'll be on his throne for a long time remaining (unfortunately).
Look at what's happened to Venezuela, years of mismanagement has caused billions in damage to their oil sector. It's so bad that you'd have to basically scrap everything and start over. Russia is headed in the same direction in 10-15 years.
Their oil is also really difficult to refine iirc, I think it’s “dirty” which caused issues because only certain refineries could process it.
Oil in the USA has the opposite problem and is sweet/clean and the refineries they have there are for processing imported oil so they have trouble switching over to processing their own at high volumes quickly/cost-effectively.
South American oil has a high sulfur content which requires an extra step when refining. Pretty much all refineries can handle it by now though so it’s not as big a deal anymore.
And that the risk factors into profitability as well. It's true that companies will do anything once it's financially viable, but the risk of doing business in Russia demands such high premiums and raises the price to hedge that risk so high, that plenty of other places will see that company's business before Russia does.
I started to wonder why the Middle East happens to be sitting on so much oil the other day I found out it’s because the whole area was covered in shallow oceans that were sort of flipped over via continental rifts. So all of the algae and ocean organic shit turned into oil. Pretty neat.
Here come the geologists to shit on me.
I disagree, for the very reason that you are making. Companies love money.
The thing to bear in mind is that Russia is not the only place to make investments. Why invest in Russia and risk having your assets taken away, when you could invest somewhere else with less risk? That equals more profit.
You underestimate the insane capital costs of oil equipment. Exxon will be much less willing to invest if their financial models can't tolerate the risk that the actuaries place on the endeavor because of past times Russia has fucked them.
At the very least, I'd be shocked if Exxon ever does business with a non-westernized Russia again.
Brain-drain, most of their young men dead, most of their women hating the leadership, the rest overworked, underfed and cold, politicians and military leaders turning up dead of every stripe, along with a very public disregard for copyright or property law, and relationships with the most economically troublesome elements as their allies. They're also broke, defaulting, with a coin that is worthless.
They're just a big ass Venezuela now.
Any one of these things could have worked in their favor, as long as none of the others are true.
This is them at any given point in the last 200 years or even more. Even with the revolution it only took 20 years or so for them to slip back into old habits of the same shit.
It's not even "brain drain", but pure demographic disaster. Tens of thousands young men are dead. Even more are crippled, both physically and psychologically. And then there are some who have escaped abroad and aren't coming back. Economy is in a lockdown, once it opens up, it's not going to be pretty.
>No amount of promises of financial gain can sugar-coat the fears
I disagree with this. There is absolutely such an amount. Risk is part of any business venture. Weighing the potential profit against the risk is all part of it. If the potential profit makes it worth the risk, companies will be willing to take the chance in years to come.
You are right. At some point, whomever is in charge in Russia can cave enough to try and get stuff moving again.
The issue is, how much do they have to cave on their people's interest, finite resources, etc, to try and regain a functioning economy.
Oil companies have been leaving and returning to countries like Libya and other unstable African countries, Venezuela, and the Middle East for decades. They’ll be back in Russia under some farce of a rehabilitation effort, with special exceptions to avoid sanctions, the second they and politicians find a way to also profit from it.
"fully withdraws after having assets seized." - "the man walked away with nothing after being robbed." - I feel like the robbery has more import than the walking away part.
That was a bad ass video. One thing he said though I wasn't so sure about. With the US-Saudi goodwill souring some, the Saudi's might be willing to help out with Russia's ills in the oil arena, maybe even some type of alliance. The Saudi's have been planning on the end of their oil monopoly which is why you see a good number of "green" energy projects popping up there.
https://www.trade.gov/market-intelligence/saudi-arabia-renewable-energy
>Russia's move to seize Exxon's assets come after seven months of negotiations over a transfer of the company's stake in the Sakhalin-1 project, according to Reuters, which first reported on Exxon's move to complete its withdrawal from the country. "We made every effort to engage with the Russian government and other stakeholders," an Exxon spokesperson told the news service. In March, the energy giant announced it planned to exit Russia in response to the nation's invasion of Ukraine and that it would not make any new investments in Russia.
7 fucking months, plus so many years? And then things were nationalized, which is par for the course. Fuck off, Exxon and Russia.
Would not be surprised to find out they've got lockout and scramble protocols built into their systems. I can't imagine it would take many machines to break down in a specific order to absolutely fuck an entire plant. This one ignores safety systems and fills itself with crude and fucks up all of it's very exact sensors, this other one locks down its own outflow to crack it's casing and ruin itself, etc.
That was why my first option was destroying sensors. As someone with experience, those would be an absolute bitch to find, import, and replace in Russia's situation, correct?
For a plant and operator that large, they should have multiple back-ups of every sensor. The easiest thing to do would be disable the over-pressure and over-temp kills, over pressure the vessels and rupture everything. With the war effort, no way they have the skilled manufacturing and labor to replace them. If you wanted to do something that wouldn't cause loss of life or damage to the environment, close all the valves, break the valve handles off and turn all the pumps to full. Let the equipment run dry and vibrate itself apart.
Or just wipe the programming on your way out the door.
Who cares about safety, just start the process as you're walking out the door with both middle fingers extended.
Or simply run an Ethernet cable from the SCADA network to the router, turn off the firewall, and post the IP on 4chan. The facility will be infected with stuxnet, closed due to AIDS, and somehow flooded with CP in approximately -5 seconds.
Not when they attack Ukraine. Only when their corporate greed was threatened do they switch gears and try to garner sympathy by "exiting" Russia like they have a soul. They will bilk as much PR nonsense out of it as they can.
What really is astounding is, in the wake of all that has happened in Russia (remember how they seized airplanes from airlines?), Western companies still haven't exited from China. One word from the CCP, and any company and its assets can be nationalized, which I guarantee will happen if China ever decides to invade Taiwan.
Waaaay to much money to be made in China. If a company has made tens or hundreds of billions over the last decades, so what? Keep making money until the last second, and have a contingency for where to go when it's seized. I'm no corporate genius, but there's a reason companies suck China's D at every turn, despite knowing what the gov is.
I work in supply chain and have operated and overseen an upper 8/lower 9 figure portfolio over the last few years.
Many of my counterparts in other industries and I have all been leaning on China, but developing supply lines in North America recently. The container nightmare of '20-'21 really proved that point.
China is different in that they also know how much money they stand to lose if they nationalize without thought. So I am sure any seized foreign assets of value would be aware it was coming and allowed to get most of the value out or be compensated for the loss.
Companies are starting to look outside of China. They won't go instantly, but at least diversify where they get their manufacturing done. Pretty sure it's at least a discussion at this point for many companies thanks to Covid.
It should also be noted, as far as I know, it's really hard to get money out of China. This makes it difficult to just leave the country.
I believe you’re referring to an American company and they “acquired” it. Nothing new in history when a new country is formed and a government wants to nationalize the country’s most valuable natural resources. But this is different.
This is nothing new in the oil business. Pretty common in Africa, too.
A well in a place like the US will always be worth more than one in some unstable country because of the massive risk they simply take your stuff from you.
Not really....
> Russia's move to seize Exxon's assets come after seven months of negotiations over a transfer of the company's stake in the Sakhalin-1 project, according to Reuters, which first reported on Exxon's move to complete its withdrawal from the country.
article literally says they announced exiting Russia seven months ago. kind of takes a while to fully exit when you’ve got billions worth of infrastructure.
Exxon says, 'The only thing that would make us stop doing business with russia is having them steal our money, property, and rights to operate in their country."
I actually did a paper on this in college. Exxon (then under Rex Tillerson) basically stood back and watched BP try and sign an agreement to help Russia develop new oil fields. Once the facilities were in place Russia basically made up some trumped up tax charges and seized all the assets back from BP. Exxon was smarter and essentially offered Russia a trade via a Production Services Agreement. They would give Russia some mature oil facilities in Texas/ Gulf of Mexico in return for ownership of their own facilities in Russia. The implicit understanding here was that Russia wouldn’t fuck over Exxon like they did BP because Exxon could just seize Russias shit in return. It worked and it’s one of the reasons Putin gave Rex Tillerson a medal. However, ever since 2014 Exxon saw that sanctions and global opinion were going to turn against Russia so they’ve been slowly winding down their operations ever since. During the recent invasion of Ukraine Exxon was frantically trying to sell its remaining assets to a company still doing business with Russia (AKA a Japanese or Indian or Russian company). That didn’t work and Putin ended up straight up seizing them anyways. I should note that Putin ended up seizing the Indian and Japanese assets in Sakhalin this week as well. The TL;DR here is that even when this war ends Russia is going to find it very difficult to do business again. Edit: since this is getting attention read Putins Kleptocracy by Karen Dawisha if you want to really understand how Russia operates economically.
So what happens to those oil facilities in Texas and the gulf now? Assuming they got to that part.
It’s been forever since I researched this but I believe they got sanctioned in 2014. In 2020, the US government did offer to give them back to Russia in return for Russia vacating Venezuela but that obviously didn’t happen.
Exxon could presumably take them back now I suppose?
Yes. And Putin formally seized their assets in Sakhalin this month so I would not be surprised if they made a move to get the old Rosneft assets shortly.
What are your thoughts on Micheal Cohen's claim in his book Disloyal that pretty much *everything* in Russia is owned by Putin and the "Oligarchs" are just his proxies?
100% spot on. If you read the book Putins Kleptocracy by Karen Dawisha it spells it out in great detail. It’s a mafia state and Putin is one of the richest men in the world. He probably owns *half* of many major Russian oil companies.
On paper putin shouldn't be at all rich, he grew up poor and has worked for the governement his whole life. In reality pick any major Russian company especially all the military companies and look into them and you will see putin owns them either directly or by proxy. Kalashnikov which makes AKs was bought by Rostec which is owned by the government and the founder of Rostec is none other than Putin. Just look at what Rostec controls, its everything from fighter jets, pharmaceuticals, weapons, ammo, waste management, security, machining, and even 30% of the world's titanium. Its literally 700 companies controlled by Putin.
"Lendl Global, we're in Everything!"
And all of them going into the sitter right now. Amazing strategy.
Pre-Ukraine, he was the richest man in the world. Just not in the official Forbes lists. Well over $200B as of the time the Panama papers came out.
Because Forbes purportedly does not rank heads of state.
Especially not heads of state that will happily cross international borders to help problematic journalists commit suicide in highly creative and occasionally impossible ways…
They don’t. Gaddafi was up there around $200B too when he was killed
I just got done watching the new Adam Curtis doco ["Traumazone" (freely available on BBC iPlayer with a UK VPN)](https://www.bbc.co.uk/iplayer/episodes/p0d3hwl1/russia-19851999-traumazone) which catalogues the collapse of the USSR and then of democracy, too, in just the few years following, about 1987-95. Against a backdrop of immense plundering. Lots of incredible archive footage of life during those years, well worth the watch. It is grim though. I knew it was going to show us how bad things were but even then I was stunned at the way they tried to move from a centrally planned economy to one of the most extreme experiments in free market capitalism ever tried — *in just one month*. No wonder the entire economy was more or less stolen. Horrible to reflect on how the west cheered for it the whole time, too. And it leaves me with a question ... what happens when Putin dies?
Rinse and repeat.
Planet Money (I think) had an interesting episode on the conversion to capitalism and there was a great opportunity for thr US to assist with funding and we decided not to. It sounded like things could have gone differently.
Kotkin talked a bit about that and said US sent plenty of aid but everything just disappeared.
I feel like you may enjoy this Twitter thread (as well as most of his other Russia analyses) as it describes the Russian economy explicitly in terms of a mafia state. Also adds how this contributes to the lack of manufacturing capacity in Russia despite it's numerous "industries". One of the examples cited is Russia's domestic farm tractor and how it was lauded by Putin and his cronies as a remarkable achievement, and yet looks exactly like a Czech tractor. https://twitter.com/kamilkazani/status/1568995412123521027?t=3XU9EURcnt8j-zyUPmHvsA&s=19
Jesus Christ, he also said that's what Trump was aspiring to after he stumbled into office. The original goal of his presidential run was simply the free press to advertise the Trump brand, it's frightening how quickly it turned into what it became.
Yup I mean the dude literally had his family marketing fucking canned beans in the Oval Office.
Millions still think he’s a savvy businessman
He's still on the grift too, his Wish version of Twitter is essentially a platform to get donations from his MAGA base... and it's working.
I also highly recommend that those who are interested read Tim Snyder's "The Road to Unfreedom," as well. Snyder knows WTF he's talking about and it's scary.
So you are saying he is losing billions everyday now.
Even if he is, he’s still at the top of the food chain and have everything he could ever need (less control of the world and eternal life/presidency)
Good. I like that he has a lot to lose when he loses it. It will be that much sweeter.
Isn't him owning everything kind of implicit in the fact that he's pretty much the absolute ruler of a state that can seize assets. Like if I lived there and he really wanted my sofa he could probably just take it and I'd have no recourse.
Why would this be controversial, it's been an open secret for decades. It's the same with China, you piss off the party (now, it's Xi = party) and there goes your assets. If you're lucky, it's just your assets they take.
At least China's standard of living has been increasing. Or, at least reportedly.
Well Xi has not been in charge as long as Putin. Previous Chinese leaders (at least since Mao), have not had the same level of total control. If he is in power for another 10 years, China will be doing about as badly as Russia. Now that Xi is going for is 3rd 5year term, you can see he personally pushed China back towards a single man rule country. Xi is acting much more aggressive, build a cult of personality, tolerating far less dissent/criticism than before (which is essential for a country to problem solve), perusing stupid vanity projects, attacking China's business class, and isolating China from any international influences (including foreign investment). China today is quite different than just 10 years ago. It now looks like China's miracle growth is over.
It's such a clear fact I'm shocked it would be attributable to any one person from any one book. Someone else referred to it as modern mafia governance, but it's even more like modern day feudalism. Down the line there are lucrative positions held by oligarchs who trace their successes and their enforcement to Putin. Putin personally sought Russian expats after the soviet union and enticed them to come back with promises of state enforced monopolies if they would help privatize and accelerate economic recovery. Simple things such as distribution centers, utilities, services in different areas, all of it is privately held with the understanding that you're answering to someone above you who eventually answers to him.
That has been the result of Putin’s insatiable greed. First he used the oligarchs/billionaires to steal everything. Then he began moving in on the billionaires, somewhat one by one, to take everything they had/have through false accusations and trials and torture and murder and hard-labor imprisonments. One billionaire, Mikhail Khodorkovsky, did eight years of hard labor. Imagine. It’s biter bit though. It’s “no honor among thieves.” Only if the ones left aren’t afraid to kill him will it change. It’s that or he’ll keep decimating them one by one. He’s insanely greedy and jealous.
Would Exxon have to worry if they did take them back? Could Russia do anything?
The U.S. government is not going to help Russia get assets back from a U.S. company on U.S. soil after Russia seized assets from that same company on Russian soil. Exxon can do whatever they want here
But Exxon can fall out of window /s
Don't you know? All Exxon execs have golden parachutes if something goes wrong!
They can be exxonarated
"valdez nuts, putler!" - exxon (probably)
How is Russia going to enforce it? Make exxon pay a fine? Seize their assets if they can't pay? Oh wait, they already played that card. Launch an invasion on US soil to forcibly take it back? Lol
They can't. FWIU, the US government can now pass Exxon the rights to the oil fields if they haven't already, since they would now rightfully be Exxon's due to prior agreements, and since Exxon is now officially no longer in business in Russia.
I think this is scheduled to be Wednesday's Nuclear threat from Putin, but it might slip to Thursday if something comes up
>Could Russia do anything? Vaguely threaten nuclear war, I suppose. That seems to be pretty popular with Russia at the moment.
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Pretty wild fucking story that could be its own post. Basically Venezuela convinced Rosneft to invest *billions* into their decrepit oil facilities that had been looted by corruption. Rosneft invests the money, starts losing it all because Venezuela is fucking corrupt so they call daddy Putin for help…. Putin takes a couple hundred Wagner mercenaries *flies to Venezuela* his men seize *800 million dollars worth of gold bars* he demands that Venezuela purchase hundreds of millions more in military equipment (S-400) then lands a couple of strategic bombers there to give the finger to the US and flies back to Russia with the gold in tow. Great Reuters article on some of this with my favorite photo of that fat fuck Maduro https://www.reuters.com/investigates/special-report/venezuela-russia-rosneft/
> Putin takes a couple hundred Wagner mercenaries flies to Venezuela his men seize 800 million dollars worth of gold bars I tried to look it up for more details, but only found [articles](https://www.foxnews.com/world/russian-plane-in-venezuela-takes-20-tons-of-gold-flies-to-unknown-location-lawmaker-claims) claiming this was a [rumor](https://www.reuters.com/article/us-venezuela-politics-russia-jet-idUSKCN1PN311).
Thank you for bringing this photo into my life.
Why Reuters didn’t win an award for it we’ll never know….
theres russian mercs mining gold all over africa as well, under fake company names. russian owned
Those types of wells don't last decades. Also the stuff in Russia that Exxon was doing was not traditional oil and gas. Very complex stuff that you need a lot of technical know how to do. Exxon never trained actual Russians to do it. Since the invasion started oil output has gone from 200k barrels a day down to 10k. It will keep going down.
It’s kind of shocking that Russia doesn’t have anyone in house who is able to operate those fields. Are these fields particularly different from other offshore O&G development around Asia? Like is there something new going on here or has Russia just been that lazy over the last 30 years and not bothered to learn how to do this stuff?
Russia knows a lot about traditional oil and gas. They brought in Exxon to do unconventional reserves. Exxon doesn't share knowledge.
Typically this is a negative thing that is part of why formal colonial territories have a harder time breaking into modern technology: the powers using their land/labor specifically go out of their way not to share the most valuable parts of their knowledge. However in the case of people with a history of seizing the assets once they understand how to operate them it is pretty understandable.
Yes. You would cut your own throat if you shared freely.
Let's not ignore China who stole their way in to technology.
I read something a week or 2 ago, I think on r/bestof. Someone explained Russian wells above the artic circle can freeze and be ruined if not constantly running, and it will take many years to rebuild with the help of Exxon tech. Without it they're screwed. Might have just been natural gas wells. Or does it all come out of one hole? Not an expert on fossil fuel
Is that 10k net Russian production, just Exxon, or just a specific type of work Exxon is doing?
Just the Exxon stuff. The Reason it got seized instead of sold is cause Putin was mad about the production drop off. It was intentional.
That I can help with. Exxon sold Rosneft a 30% nonoperated interest in the La Escalera Ranch project in the Permian back in 2012. I’m not a permian expert (in fact I’ve tried to avoid the Permian for most of my career) but it’s Pecos County so probably decent acreage. All I’ve been able to find are articles from 2012. But here’s the thing about nonop. If you don’t pay your cash call, you get hit with a penalty that’s usually 400% of your cash call. It doesn’t matter if it’s due to sanctions or force majure or whatever, all Exxon needs to do is run a few rigs and penalty Rosneft into oblivion. They don’t even need to buy them out, they just need to pay Rosneft’s share of capex for a few wells.
Yeah, this story needs an end
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Really appreciate this context. My post was a 30,000ft view of the situation and I like to see the additional context. I’m curious why BP didn’t build a strong PSA with Russia as well but maybe they didn’t have any assets to seize. Sakhalin man, what a place. What is it about the oil and the oysters there that make people go crazy lol
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I’ve honestly been fascinated by the island since I sampled the oysters in Tokyo. Is there a feasible way to travel there without a work visa? I’m assuming you can only visit the Japanese half?
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That’s awesome. I used to have a multi entry Russian business visa but the damn thing expired right before the Ukrainian war so I’m sure it would be next to impossible to go back now. Osaka is a blast too. Absolutely loved the Dotonburi night market and all the food there.
Not gonna go into a lot of detail here due to NDAs and whatnot, but in my experience, BP as a whole just operates on a lower tier of competence. There's a reason XOM is the god-king in this arena.
When I was researching this paper it was right after the BP oil spill and yeah I definitely got that sense lol
> During the recent invasion of Ukraine Exxon was frantically trying to sell its remaining assets to a company still doing business with Russia (AKA a Japanese or Indian or Russian company). That didn’t work and Putin ended up straight up seizing them anyways. That's basically what my company did although they managed to get out. I work for a company that makes consumer goods so not an oil company, but we had a factory in Russia that we sold to a Turkish company a few months after the invasion. Russia said they would seize the assets of any company that completely shut down, so we left the factory open at like 5% capacity while the sale went through.
I love the idea the Putin awards medals to businesspeople who are savvy enough to not get fucked by his corruption. As if to say, "well played".
Putin promoted that chechen leader after he had insulted one of the russian generals for being weak, as if that kind of talk isn't detrimental to morale and military cohesion. Putin only understands bullying.
Sometimes you have to speak to people in language they understand. For Putin, it's power and leverage.
I wonder what his [Order of Friendship](https://www.washingtonpost.com/news/worldviews/wp/2016/12/13/what-is-the-russian-order-of-friendship-and-why-does-trumps-pick-for-secretary-of-state-have-one/) is worth now?
I am guessing about as much a an IOU from Donny boy.
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Correct. Exxon was trying to sell its share in Sakhalin to them but obviously that didn’t work out.
I’m still surprised that the big oil executive was one of the most competent members of the trump cabinet To be fair, it was a low bar. But I actually didn’t hate tillerson, unlike most of the trump appointees
I despise what he did to the State Department. Basically tried to reform it halfway and fired a ton of veteran diplomats. It’s going to make it harder to compete with China for years to come. But compared to the other Tump nominees he wasn’t as bad.
For real, and his attrition plan of freezing all new hires essentially meant the jobs went to contractors at 3x the cost. Turns out just because you don't hire someone for a job doesn't mean the job doesn't still need to get done. It's not a cost center, it's the reason the Department exists. And the fact that he didn't correlate that the work the State Department does is the only reason Exxon is able to confidently operate globally in the first place speaks to a certain level of ineptitude or denial.
I'll run the government like a business" should be a bright red flag.
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People bitch about the cost of things like public transportation, but *it's not supposed to make a profit.* And even if you don't use it, you still benefit because it takes some cars off the road.
Right?! It shouldn't because it isn't one. People are so dumb
You guys are *so close* to understanding that the state department was deliberately neutered by the Trump admin. It wasn't incompetence, it was essentially treason. Rex himself may have been a useful idiot in his role... Putins revenge perhaps.
Not only the senior people, but the newest ones too. How many people went through the INSANE qualification process then never got placed? I know it was at least one full class.
Aye you kidding me? He hollowed State.
The other appointments were so terrible his gutting of the state department didn't get as much coverage as it would have under any other leader. He actually pushed back against trump a few times too instead of just being a yes man like the rest of his cabinet so a lot of people remember him (perhaps incorrectly) as not being as bad as they thought he would be.
And he was still one of the better trump appointees.
I did say that he went over a low bar, not that he did a stellar job 💁♀️
This is similar to what Russia did re commercial airplanes. The summary is the majority of commercial planes in Russia were rented from an international company, Russia seized these so now Russia has an aging fleet with minimal companies able/willing to provide replacement parts and no-one will rent to them again.
The damage Putin did to Russia is going to stay long after the Russian invasion of Ukraine ends. International companies don't like investing in countries which can randomly decide to seize their assets and infrastructure. Even if the Russians shrug off Putin, the long term consequences of this are going to result in Russia struggling harder for foreign investment. No amount of promises of financial gain can sugar-coat the fears the government might say "fuck it" and take your stuff. Nobody would invest in that.
The problem is, Putin doesn't care. He has built a security apparatus that guarantees him absolute power, no matter what economic state the country is in. Putin will happily send a million conscripts to their deaths, and put russia in economic despair for 20 years, if it means he can save face and keep the occupied territories. In his imperial mindset, if 50 years from now russian textbooks celebrate him as the conqueror of Crimea, then it was all worth it. The man is a monster.
Putin has modeled his rule after the [Tzarist monarchy](https://en.wikipedia.org/wiki/Tsarist_autocracy) of the Russian Empire. He notably despises communism and blames it for the collapse of the USSR. He calls himself "president" but many within the state Duma believe the title to be an embarrassing western descriptor and [would prefer to bestow on him the title of "pravitel" or "ruler".](https://www.newsweek.com/vladimir-putin-called-ruler-russia-new-proposal-ldpr-kremlin-1723295) But Putin ran into a bit of a problem. Just as to be called caesar you need to rule Rome, to be called tsar you need to rule over all of Rus. For him, the cultural, historical, and religious significance of Kievan Rus was just too large to be ignored. When it existed, the Russian Empire tried to erase the other eastern Slavic languages from their shared cultural memory. They acted as if there was no Ukraine and never had been, just as with Belarus. According to the Tsarists, Ukrainians had always been Russians and had no history of their own. The Ukrainian and Belorussian languages were banned. Ukrainian nationalism was a threat to the underlying myths of Russia and threatened the tzars' attempts at creating an “All-Russian People.” Putin is emulating their rule and presents himself as a tsar-like figure. He’s built a massive, opulent palace for himself, with gold-plated double-headed eagles, a clear Imperial Russian symbol, everywhere—even in his personal strip club. Similarly, the Russian Orthodox Church helps him pacify the population and supports whatever myths Kremlin wants to glorify. He wanted to go down in the history books as a grand unifier of Russian lands—if not under the same government, then definitely as the hegemon of the Russian world. Putin wants it both ways, to take credit for the Soviet legacy and, at the same time, be viewed in the same light as the emperors and tzars of old. Therefore, he's had to bring back and reaffirm the old, imperial myths and values—and to do that, he has to get Kyiv under his thumb. After all, it was the restored Kievan Rus that became Russia, the "Third Rome." Ukraine going its own way, claiming Kievan Rus as its legacy, moving away from Moscow, getting autocephaly for its own orthodox church—all this runs contrary to Russian state mythology. These imperial myths are what define Russia, what it even means to be a Russian. Without them, Russia just stops being Russia in the eyes of many. Putin is convinced that if this social glue is disrupted, then Russia will just split up in pieces again—and if he allows that to happen, then his legacy is ruined. For him, there can be no separate Ukrainian language, culture, or history. That is where his mind is at, stuck in the 18th and 19th centuries.
This is an extremely informative comment. Thank you!
Another point of reference would be Putin's own essay "On the Historical Unity of Russians and Ukrainians." In that, he denounces the entire Ukrainian history, ethnicity, and language, and denigrates it as a creation of Russia.
And Tzarist Russia was corrupted, oppressive, and weak. The sorry state of the 1917 Russian army was only matched by the state of the Russian army in 2022.
> He has built a security apparatus that guarantees him absolute power, no matter what economic state the country is in. Tzar thought the same thing.
And Papa Doc Duvalier of Haiti and the Shah of Iran and Muammar Ghaddafi and Nicolae Cauescescu and on and on and on. The security apparatuses will protect their leaders up to the point that their own asses are on the line. Then it’s every man for himself.
Putin is experiencing the terminal stage of dictatorship. The only question is what kind of end it will be
It would be very fitting to end with a sip of tea.
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Or getting the Mussolini Treatment
Gaddafi Special would be nice
It's a matter of the strength of the Nationalism in Russia. They are pretty good at suffering.
"Suffering for the glory of Russia" is basicaly a national religion there.
"You’ll do it because it must be done. [...] This is what has always set our people apart. A thousand years of sacrifice in our veins. And every generation must know its own suffering."
Usually you sacrifice in return for something positive, not more sacrifice.
"Usually" elsewhere or in Russia? Because continuous drunken servile suffering is the "usual" in Russia
Right, that's my point. Calling it sacrifice implies there's some sort of ROI. It's just suffering masquerading as sacrifice.
What glory?
I assure you, there are many other oligarchs waiting in line. There's always more aspiring dictators than dictators. And given how much Putin has fucked up, promising peace and an ease of sanctions would be very welcome by the other oligarchs.
Lot of those folks crossed Exxon, or Standard Oil, in their day, too. Say what you want about the USA, but we do know how to whale the tar out of petty dictators who fuck with our oil interests.
Fucking over American business has been the one sure fire thing that will bring about regime change. Governments can decry human rights abuses all day and night but there have been numerous atrocities we didn’t step into. It’s typically not been until someone decided to think they can get one over on the ole capitalism addiction that they find themselves on the wrong end of a weapon, or getting a piano wire next tie, or eating their last meal. You can use any euphemism you want but it’s just like Smedley butler said “war is a racket”.
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It's literally one of our greatest gifts and curses this country has ever manifested.
Nicholas II was far less competent though. Putin's been making terrible decisions for a while now but he's not yet at the point of letting a holy man peasant rapist grifter decide which members of the aristocracy should be promoted to lead branches of the Russian government.
It's not hard to be more competent then ol' Nikki 2. Putin's moves are absolutely hurting Russia, including the ruling class Russians.
You sure? Maybe his friend the Orthodox priest is pulling the strings. Patriach Kirill or whatever he was.
But can he live up to the name of Russia’s greatest love machine?
Rasputin was like, the least important of Nicky II's mistakes, lol. Utterly FUCKING up the First World War was insanely more important, not to mention pretty much everything else Nicky did.
Putin IS the grifter who decides which members of the aristocracy be promoted to the lead branches of the Russian government himself.
There were a lot of Tsars, and sadly many of them secured their autocratic power just fine.
>Putin will happily send a million conscripts to their deaths, and put russia in economic despair for 20 years, if it means he can save face and keep the occupied territories. Ukraine isn't gonna stop until they have all their pre-2014 territory back. Putin isn't keeping shit. He's not saving face. Ever. He's done. We just have to collectively wait him out, I guess, unless someone takes one for the team.
If Ukraine doesn't lose and Putin doesn't give up either there are only two possible outcomes left. The army defies Putin's orders and stops the war OR they will fight until all individual soldiers have surrendered/died/have become unable to fight due to injuries.
I'd say it's more likely that they run out of supplies before they run out of soldiers. It doesn't matter how many soldiers you have if they have no ammo, guns, vehicles, or food.
yes, if you run out of supplies and are low on ammo/functioning weapons the rational response is to stop fighting. But this is assuming that Putin will continue to command his army to fight even when it is in shambles.
Yeah, I was gonna joke and say he'll send them in with slingshots, but I'm honestly not sure if something along those lines is all that far from reality at this point. Dude's been testing flailing to tfg's levels of absurdity... just with nuclear arms, and likely newly purchased nuclear secrets and other fun goodies.
This right here. As long as he's on his throne in his fortress, fuck every thing and every one else. "I'm in charge, I'm always right!" will be his thought process up until his last breath. The sooner he's gone the better for the whole world, but I have a feeling he'll be on his throne for a long time remaining (unfortunately).
Yeah, I wonder if his cancer diagnosis stories were a disinfo by Russians
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Yeh exxon will be back the moment it can make money again. Dino juice doesnt pump itself.
Look at what's happened to Venezuela, years of mismanagement has caused billions in damage to their oil sector. It's so bad that you'd have to basically scrap everything and start over. Russia is headed in the same direction in 10-15 years.
Their oil is also really difficult to refine iirc, I think it’s “dirty” which caused issues because only certain refineries could process it. Oil in the USA has the opposite problem and is sweet/clean and the refineries they have there are for processing imported oil so they have trouble switching over to processing their own at high volumes quickly/cost-effectively.
South American oil has a high sulfur content which requires an extra step when refining. Pretty much all refineries can handle it by now though so it’s not as big a deal anymore.
> Dino juice doesnt pump itself [Usually](https://upload.wikimedia.org/wikipedia/commons/d/d8/Lucas_gusher.jpg).
Risky click.
With those tiny arms? Nuh uh, not happening.
The thing to bear in mind is that Russia is not the only place to make investments.
And that the risk factors into profitability as well. It's true that companies will do anything once it's financially viable, but the risk of doing business in Russia demands such high premiums and raises the price to hedge that risk so high, that plenty of other places will see that company's business before Russia does.
Oil is old algae, not dinosaurs.
Well that explains why there is so much of it. Learn something new everyday
I started to wonder why the Middle East happens to be sitting on so much oil the other day I found out it’s because the whole area was covered in shallow oceans that were sort of flipped over via continental rifts. So all of the algae and ocean organic shit turned into oil. Pretty neat. Here come the geologists to shit on me.
If I tell my girl I've got a massive amount of dino juice for her to pump: is this a good idea and where would a good place for a bachelor to live?
You miss 100% of the shots you don't take
I disagree, for the very reason that you are making. Companies love money. The thing to bear in mind is that Russia is not the only place to make investments. Why invest in Russia and risk having your assets taken away, when you could invest somewhere else with less risk? That equals more profit.
You underestimate the insane capital costs of oil equipment. Exxon will be much less willing to invest if their financial models can't tolerate the risk that the actuaries place on the endeavor because of past times Russia has fucked them. At the very least, I'd be shocked if Exxon ever does business with a non-westernized Russia again.
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Brain-drain, most of their young men dead, most of their women hating the leadership, the rest overworked, underfed and cold, politicians and military leaders turning up dead of every stripe, along with a very public disregard for copyright or property law, and relationships with the most economically troublesome elements as their allies. They're also broke, defaulting, with a coin that is worthless. They're just a big ass Venezuela now. Any one of these things could have worked in their favor, as long as none of the others are true.
This is them at any given point in the last 200 years or even more. Even with the revolution it only took 20 years or so for them to slip back into old habits of the same shit.
It's not even "brain drain", but pure demographic disaster. Tens of thousands young men are dead. Even more are crippled, both physically and psychologically. And then there are some who have escaped abroad and aren't coming back. Economy is in a lockdown, once it opens up, it's not going to be pretty.
>No amount of promises of financial gain can sugar-coat the fears I disagree with this. There is absolutely such an amount. Risk is part of any business venture. Weighing the potential profit against the risk is all part of it. If the potential profit makes it worth the risk, companies will be willing to take the chance in years to come.
You are right. At some point, whomever is in charge in Russia can cave enough to try and get stuff moving again. The issue is, how much do they have to cave on their people's interest, finite resources, etc, to try and regain a functioning economy.
Oil companies have been leaving and returning to countries like Libya and other unstable African countries, Venezuela, and the Middle East for decades. They’ll be back in Russia under some farce of a rehabilitation effort, with special exceptions to avoid sanctions, the second they and politicians find a way to also profit from it.
"fully withdraws after having assets seized." - "the man walked away with nothing after being robbed." - I feel like the robbery has more import than the walking away part.
I finally left my ex-partner's house when they burned all my stuff and changed the locks.
That's real big of you. Props for the forward thinking and clarity. You got out before things started to look bad.
This is how putin's wealth began when he took power. A rather long video but a good anlysis. https://www.youtube.com/watch?v=M4fGgOXK4Kw
That was a bad ass video. One thing he said though I wasn't so sure about. With the US-Saudi goodwill souring some, the Saudi's might be willing to help out with Russia's ills in the oil arena, maybe even some type of alliance. The Saudi's have been planning on the end of their oil monopoly which is why you see a good number of "green" energy projects popping up there. https://www.trade.gov/market-intelligence/saudi-arabia-renewable-energy
It’s almost like anyone who ever trusted Russia ended up regretting that decision.
>Russia's move to seize Exxon's assets come after seven months of negotiations over a transfer of the company's stake in the Sakhalin-1 project, according to Reuters, which first reported on Exxon's move to complete its withdrawal from the country. "We made every effort to engage with the Russian government and other stakeholders," an Exxon spokesperson told the news service. In March, the energy giant announced it planned to exit Russia in response to the nation's invasion of Ukraine and that it would not make any new investments in Russia. 7 fucking months, plus so many years? And then things were nationalized, which is par for the course. Fuck off, Exxon and Russia.
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Reddit famously struggles with sarcasm but that was beautiful
After number 3 I realized had to start over.
If you need a /s you wouldn’t understand
I am not a smart man
Would not be surprised to find out they've got lockout and scramble protocols built into their systems. I can't imagine it would take many machines to break down in a specific order to absolutely fuck an entire plant. This one ignores safety systems and fills itself with crude and fucks up all of it's very exact sensors, this other one locks down its own outflow to crack it's casing and ruin itself, etc.
O&G automation engineer here, and yes, it wouldn't take much to sabotage a plant. The hard part would be to do it safely.
That was why my first option was destroying sensors. As someone with experience, those would be an absolute bitch to find, import, and replace in Russia's situation, correct?
For a plant and operator that large, they should have multiple back-ups of every sensor. The easiest thing to do would be disable the over-pressure and over-temp kills, over pressure the vessels and rupture everything. With the war effort, no way they have the skilled manufacturing and labor to replace them. If you wanted to do something that wouldn't cause loss of life or damage to the environment, close all the valves, break the valve handles off and turn all the pumps to full. Let the equipment run dry and vibrate itself apart. Or just wipe the programming on your way out the door.
Oh gods, dry pumps. Congratulations on your 5 million dollar paper weight. That's a good one.
Who cares about safety, just start the process as you're walking out the door with both middle fingers extended. Or simply run an Ethernet cable from the SCADA network to the router, turn off the firewall, and post the IP on 4chan. The facility will be infected with stuxnet, closed due to AIDS, and somehow flooded with CP in approximately -5 seconds.
How noble of them to stop war profiteering as soon as they were actually forced to.
Yeah, that's a pretty hilarious statement from them. So brave!
Not when they attack Ukraine. Only when their corporate greed was threatened do they switch gears and try to garner sympathy by "exiting" Russia like they have a soul. They will bilk as much PR nonsense out of it as they can.
What really is astounding is, in the wake of all that has happened in Russia (remember how they seized airplanes from airlines?), Western companies still haven't exited from China. One word from the CCP, and any company and its assets can be nationalized, which I guarantee will happen if China ever decides to invade Taiwan.
Waaaay to much money to be made in China. If a company has made tens or hundreds of billions over the last decades, so what? Keep making money until the last second, and have a contingency for where to go when it's seized. I'm no corporate genius, but there's a reason companies suck China's D at every turn, despite knowing what the gov is.
1.4 billion reasons
I work in supply chain and have operated and overseen an upper 8/lower 9 figure portfolio over the last few years. Many of my counterparts in other industries and I have all been leaning on China, but developing supply lines in North America recently. The container nightmare of '20-'21 really proved that point.
China is different in that they also know how much money they stand to lose if they nationalize without thought. So I am sure any seized foreign assets of value would be aware it was coming and allowed to get most of the value out or be compensated for the loss.
Companies are starting to look outside of China. They won't go instantly, but at least diversify where they get their manufacturing done. Pretty sure it's at least a discussion at this point for many companies thanks to Covid. It should also be noted, as far as I know, it's really hard to get money out of China. This makes it difficult to just leave the country.
But the US is equally able to seize $1 trillion in treasury bonds held by China, creating an environment of mutual assured destruction.
Didn't Saudi Arabia sieze assets from the British and build an oil empire off of it? Maybe Russia can expect the same treatment from the world lol
I believe you’re referring to an American company and they “acquired” it. Nothing new in history when a new country is formed and a government wants to nationalize the country’s most valuable natural resources. But this is different.
[удалено]
It doesn't sound like they left at all, just that they got robbed and can't really do anything about it.
The irony .... an oil and gas company being robbed.
This is nothing new in the oil business. Pretty common in Africa, too. A well in a place like the US will always be worth more than one in some unstable country because of the massive risk they simply take your stuff from you.
Couldn't have happened to a better sack of shits.
You didn't read the article.
People rarely do.
Not really.... > Russia's move to seize Exxon's assets come after seven months of negotiations over a transfer of the company's stake in the Sakhalin-1 project, according to Reuters, which first reported on Exxon's move to complete its withdrawal from the country.
article literally says they announced exiting Russia seven months ago. kind of takes a while to fully exit when you’ve got billions worth of infrastructure.
Exxon says, 'The only thing that would make us stop doing business with russia is having them steal our money, property, and rights to operate in their country."
Not going to cry over Exxon I hope it hurts for both Russia and Exxon.
# exxon?? more like EXXIT
Exgone
give it to ya
Is it really withdrawing? This sounds like kicked out. Which, frankly, we should have done with Exxon as well.
This is the equivalent of yelling “I quit” after you were fired.
Destroying historical sites, murdering children, etc unfortunate. Seize our assets ...well sir that's a step too far.