From Russia With Love

greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread

I hesitated to even make this post. I want to clarify off the bat that this is only one man's opinion. I'm a crude oil and strategic planning analyst for a Fortune 500 refiner. That's it. I don't claim to be a trader god and I don't see the future. I do however make educated guesses for a living. This is my educated guess on Russia as regards the Y2K problem, specifically Oil and Gas. Additionally, I have added three articles at the end which came out today which were relevant to this analysis. Do your own research with the links at the end, search the reports for Russian progress, and tell me you don't reach the same conclusions. All of this information is for educational and research purposes only:

>From Russia With Love

"This is a management problem every bit as much as it's a technology problem. And the biggest mistake you can make if you are a CEO or a responsible manager is to say, 'My IT guy will fix this.'" -Senator Bob Bennett (R) UT

Aside from government readiness, Russia faces major Y2K challenges in key infrastructure sectors including telecommunications, energy, banking, and government services. In June of 1999 it was projected that Russia was likely to experience a month of disruptions in financial markets, two months for utilities and healthcare, and up to three months of turmoil in transportation and telecommunications. INVESTIGATING THE YEAR 2000 PROBLEM: THE 100 DAY REPORT Senate Special Committee on Y2K Problem

After years of decline, Russias flirtation with capitalism has now reached a critical juncture. The experiment with Western-style capitalism has collapsed. And the invention of Russias peculiar  and wild  brand of capitalism has ended in outrageous scandal and popular discontent. A decade worth of foreign aid and investment has left Russia a pauper nation.

The best global intelligence agency on the world wide web.

Overview/Main Points Russia will experience significant Y2K caused disruptions to energy and other industrial sectors.

Experts all agree that Russias late start on remeditaion will result in severe disruptions.

Russias current socio-economic chaos is not a convenient excuse for denying the seriousness of their situation, but rather a catalyst for the impending disaster.

Russia is/was a superpower. The collapse of this country will not go unoticed in the world economy and will have severe reprocussions for those countries dependent upon Russian energy and materiel. The collapse will likely result in a reversion to old line communism within Russia.

The following countries will experience severe reprecussions as a result of Russian dependency in order of decreasing magnitude: Ukraine, Czechoslovakia, Poland, Germany and Italy.

What the experts have to say:

Y2K failures will occur before and as the date rollover approaches, peaking on 1 January and persisting well beyond that. In some countries, such as Russia, it will likely take a significant amount of time to overcome Y2K failures. Russia and Ukraine are particularly vulnerable to Y2K failures. They got a late start in remediation and lack sufficient resources to identify and correct problems- virtually guaranteeing that the countries will suffer economic and social consequences for some time. Both countries have old capital stock, much of which has not been upgraded since the Soviet era. They are further impeded because of their perception that a limited computer dependence largely "protects" them. Areas of greatest risk are strategic warning and command and control, nuclear power plants, the gas industry, and the electric power grid. Congressional Testimony of Larry Gershwin National Intelligence Officer Central Intelligence Agency October 13, 1999

Russia is at great risk. China and Russia are both considered at accelerated political and economic risk due to Y2K failures. Nick Gogerty, International Monitoring. Congresional Testimony October 13, 1999

"The Year 2000 risk for Russia is in the grid," he told reporters. "It's not inconceivable that what we are going to do by late summer or early fall is look at whether we shouldn't provide direct aid in terms of backups such as batteries and generators John Koskinens comments Chicago Tribune April 1999

Right or wrong computer problems on the eve of the new millennium do not rank high on their scale of concerns Col. Stanislav Lunev, highest ranking military officer ever to defect to the US October 13, 1999

However 21 countries slipped further behind in their efforts and the vast majority of are countries still showing significant risk of infra-structure failure. The most disappointing country was Russia. Senate 100 Day Report, Senate

Russian Industrial Chaos + Y2K = FUBAR

We need only look to newswires for confirmation of the fact that Russia is indeed mired in an economic and sociological chaos which is unparalleled in this century. The situation in Russia is unsustainable notwithstanding any potential Y2K impacts. The events of this past week in Armenia and Chechnya only serve to underscore the coming cataclysmic resolution of Russian difficulties. Russia is a country where prime ministers are shot dead in parliament, explosions in downtown Moscow kill innocent civilians daily and 90,000 troops are massed outside Chechnya waiting to kill their fellow countrymen. Do you really think for a second that this country in its current state could possess the wherewithal to remedial a complex technology problem such as Y2K? The answer is no. The problem is compounded by the fact that the natural resources became top prizes in contest for power within Russias twisted economic environment where domestic sources actually barter for crude oil and must pay prices 10% above exported values. Extreme premiums are available for anyone who has cash, but that would be a small minority indeed. The headlines below show the depth of the problems within the Russian Energy industry. There is precious little hope that these companies have successfully remediated anything.

Gazprom: Operates one of the largest gas pipeline systems in the world with a total length of 373,000 kilometers of pipe controlling 95% of Russias natural gas accounting for approximately 25% of the countries tax base. The distribution network passes through 1,300 cities and 16,000 towns within Russian borders. In total about 1/3 of Russian power is produced by Natural Gas making Gazproms success critical for Russian infrastructure. In September the company announced that 9,000 of its PCs were not Y2K compliant and would need to be replaced. They stated that the bulk of them would be replaced by October and that they would modify the rest. This company lives on the edge of economic and political chaos daily. At this time they are operating over 23,000 miles of line which are in need of repair, 13,000 of which operate at reduced rates already due to the extensive corrosion theyve suffered. Do you really think theyve spent good money on Y2K when they cant even repair their pipes?

Some recent WSJ headlines: Gazprom Investors Want Recompense For Any Share Loss Russia Examines Possible Theft Of $20 Million in Gazprom Stock Russia Tightens Grip on Monopolies As Parliamentary Elections Approach October 1999 WSJ Transneft: Owns the entire 31,000 mile crude oil pipeline system and is responsible for all crude and product movements in Russia. They are one of Russia's biggest hard-currency earners, and control of the company has become the object of an intense political fight in run up to the December parliamentary and June presidential elections. Recently, a new official was installed at the company by the government in an effort to gain further control over the valuable entity. Recently some of Yeltsins cabinet members decided they wanted a new president for Transneft. They promptly made the announcement was made that the old president was out, and sent three hundred armed troops who had to cut through office barricades using chainsaws to get the president elect in to his new office. I can just see his next memo, comrades. let me just say I have appreciated your warm Russkie style velkomme and all your heartfelt anti-personnel mines.. now that the armed troops are being reduced around the perimeter, let us get down to business with this Y2K issue. Such is the state of affairs at Transneft.

Recent Fox News Story: Oil company president installed with help of troops 10.25 a.m. ET (1425 GMT) September 16, 1999

Oil company president installed with help of troops

10.25 a.m. ET (1425 GMT) September 16, 1999 MOSCOW  Russian troops used chain saws to force their way into the headquarters of the Transneft oil pipeline on Thursday and install the newly appointed head of the company in his office. Several dozen Interior Ministry soldiers were dispatched to the companys offices after supporters of a management team that was ousted last week attempted to block Transneft's new chief, Semyon Weinstok, from entering his office. Andrei Vazhnov, a spokesman for ousted Transneft President Dmitry Saveliev, said the troops stormed the building and used chain saws to break down a door and escort Weinstok to his office. Saveliev was fired last week.

According to a spokesman for the Fuel and Energy Ministry, Saveliev's management team had cost the government about $30 million in losses.

However, Saveliev said his dismissal was illegal, because the government didn't call a shareholders' meeting to consider the move, which would have taken 45 days.

Why You Should Care Russia: The worlds largest exporter of natural gas, 60 billion cubic feet per day , 30% of the worlds gas Second largest exporter of energy and petroleum in the world Russian net oil exports averaged 3.1 million barrels per day in 1998 The holder of the second largest coal reserves in the world The world's second largest energy consumer

Who will be affected? Most of Russia's oil exports are destined for European customers, including Germany , Italy and Spain

Germany-most of its oil imports and 30% of its gas imports come from Russia

Italy imports one third of its gas from Russian sources.

Poland imports most of its crude and 80% of its gas from Russia.

Ukraine currently imports nearly 80% of its oil, almost all of which comes from Russia.

Ukraine is the main transit route for Russian natural gas shipments to Europe.

Conclusions I would like to say I think everything will be OK in Russia this winter. Id like to say that the implosion of their infrastructure wont affect the economies which are dependent upon them or ripple through the rest of the world Economic Ebola Zaire, but I simply cant. The regional infrastructure failures will be extremely bad, and the catastrophes they will inevitably engender will likely cause a return to hard line communism within the FSU. If you have anyone you care about in this region, I would strongly encourage them to come to the US if possible.

Russian oil and gas exports will be fully disrupted for 2-4 months minimum, resulting in a net loss of crude exports between 192 million and 384 million barrels of oil. The gas shortages will result in infrastructure failures in Russia and parts of Eastern Europe. The disruptions in crude oil will result in upward price pressure, mostly in the North Sea grades and Mid East, WAF to a lesser extent. I am uncertain of the price impact on crude except that it will be severe upward pressure from this area. The situation will be impacted by other areas, as well as spare production capacity. If I had to hazard a guess, it would be that Dated Brent will crest $24 dollars per bbl in Jan based upon this one area of disruption, it could go higher depending on other disruptions around the globe. Gas prices will disconnect, as the shortages become acute. Gas oil will most likely spike as utilities switch over where they can.

July 1999 Russian Oil and Gas Exports Fact Sheet

September 1998 Russia: Energy Situation Update

Caspian Maps and Graphs

Germany, Ukraine, Italy, Poland and Czech

Gershwins testimony

Other International Testimony

Senate 100 day report

Gogertys testimony

Y2K Russian Style - Stanislav Lunev

Koskys Statements

Fair Use, for educational and research only: 116--US State Department takes Y2K measures for Russia, others Washington (Platt's)--1Nov1999/108 pm EST/1808 GMT The US State Department will allow non-essential employees and their family members to leave Russia, Belarus and Ukraine prior to Jan 1 because of fears of year 2000 computer problems. "In particular, we are concerned about potential disruptions of energy supplies that may impact the health and safety of US citizens" living or traveling in those countries, the State Department said in an Oct 29 advisory, adding "prolonged disruptions in energy supplies in Russia could put other systems dependent on electrical power at risk." US embassies and consulates in Russia, Belarus and Ukraine will remain open and available to provide emergency assistance for US citizens, the State Department said. --Platt's Global Alert-- [0116] [GM] [N] [QQ]

No millennium bug chaos in Russia, says official By Michael Steen MOSCOW, Nov 2 (Reuters) - The official charged with handling the millennium computer bug problem for Russia said on Tuesday he could "boldly declare" his nation safe, although the atomic power agency said there might be minor systems glitches. The United States has said Russia is "somewhat prepared" to prevent potential mayhem when computers across the globe switch their date to January 1, 2000. Experts worry that older computers controlling systems from nuclear power stations to automatic teller machines might get confused with the two zeros at the end of 2000 and cause chaos. "I can boldly declare that nothing anywhere near as terrible will happen as we are presently being frightened with," said Russian Deputy Prime Minister Ilya Klebanov. As well as being charged with Y2K problems, Klebanov is in charge of Russia's defence industry. "That said, we are taking precautionary measures," he told Ekho Moskvy radio. Klebanov said Russians would notice nothing more than the results of the odd "non-critical" system malfunctioning. U.S. authorities have signalled concerns about Russian readiness for the onset of the millennium bug by allowing non-essential embassy staff in Moscow to take leave. U.S. officials have warned that basic services such as heat, water and telephones may not work. Klebanov said there was no reason for anyone to avoid Moscow over the New Year. "What is there to fear in Moscow? The ministry for nuclear power has reported that the problem is solved. Moscow energy authorities will (also) solve it by mid-December," he said. However, RIA news agency quoted the state-owned company which runs most of Russia's nuclear power stations as saying that some auxiliary systems might be affected on December 31. It quoted Rosenergoatom as saying it found no problems with the safety of main atomic power generating units but auxiliary systems, including power supply units, might be affected. Rosenergoatom was not immediately available to clarify its reported remarks nor how problems at the power supply units might affect the operation of the power stations as a whole. Klebanov also played down any worries with Russia's nuclear weapons arsenal, the world's second largest. Russian and U.S. military personnel have agreed to spend New Year's Eve sitting side by side in a missile command centre in Colorado to prevent either side thinking the other has launched any of the missiles in their massive nuclear arsenals. [G] [C] [D] [E] [M] [O] [T] [U] [MTL] [GRO] [SOF] [OIL] [CGO] [RNP] [RU] [NEWS] [EMRG] [EEU] [ASIA] [EUROPE] [US] [Y2K] [SCI] [AER] [LEN] [RTRS]

TABLE-Russia Jan-Oct oil output/exports detailed MOSCOW, Nov 2 (Reuters) - Russia's crude oil and gas condensate output rose in the first 10 months of this year to 253.413 million tonnes from 252.549 million tonnes in January to October 1998, the Fuel and Energy Ministry said on Wednesday. But crude oil exports to destinations outside the Commonwealth of Independent States fell to 93.801 million tonnes from 98.554 million tonnes in the same period last year. The following preliminary data was supplied by the Central Dispatch Unit of Russia's Ministry of Fuel and Energy. All figures are in million tonnes. RUSSIAN JANUARY-OCTOBER CRUDE OIL, GAS CONDENSATE OUTPUT/NON-CIS CRUDE OIL EXPORTS 1999 1998 LUKoil* 44.440/13.351 44.322/16.668 Surgutneftegaz 31.096/10.160 29.202/11.832 YUKOS 28.338/12.198 28.389/ 9.563 Tatneft 20.032/ 6.375 20.427/ 6.675 Tyumen 16.600/ 5.228 16.439/ 5.964 SIDANKO** 16.232/ 3.983 16.671/ 5.036 Sibneft 13.658/ 4.357 14.521/ 4.876 Bashneft 10.255/ 3.238 10.767/ 3.083 Rosneft 10.434/ 4.414 10.587/ 5.391 Slavneft 9.934/ 3.394 9.812/ 3.793 Eastern Oil*** 8.757/ 0.315 8.937/ 3.023 Gazprom 8.125/ 1.543 7.837/ 1.868 Onako 6.633/ 1.768 6.569/ 1.577 KomiTEK 3.020/ 1.251 2.905/ 1.196 Rostopprom 0.295/ 0.088 0.287/ 0.069 Grozneft 0.126/ 0.0 0.818/ 0.566 Ingushneftekhimgazprom 0.115/ 0.104 0.100/ 0.083 Small Russian producers 7.640/ 2.619 7.470/ 3.744 Companies with foreign shareholding 17.440/ 7.222 16.166/ 7.521 Total Russia through Transneft 253.413/90.575 252.549/96.106 Transit through Russia Azerbaijan 1.663 1.980 Kazakhstan 6.534 2.866 Turkmenistan 0.576 0.0 Total Transneft 99.348 100.952 Routes other than Transneft**** 3.226 2.448 Total exports 102.574 103.400 * LUKoil's oil and gas condensate output data does not include production by LUKoil's joint ventures operating in Russia. ** Bankrupt SIDANKO unit Kondpetroleum, which produced 2.084 million tonnes in Jan-Oct 1999, down from 2.136 million in the same period in 1998, was bought in October by Tyumen Oil Company *** Controlled by YUKOS. **** Some companies export crude by sea tankers, filling them at ports close to offshore oilfields, or by rail, so bypassing Transneft, the Russian crude oil pipeline monopoly. ((Moscow Newsroom, +7 095 941-8520 moscow newsroom@reuters.com)) [O] [SHG] [RU] [CRU] [TRD] [SHP] [EUROPE] [ASIA] [LDC] [EMRG] [ENR] [KZ] [TM] [AZ] [LEN] [RTRS]

Happy New Year



-- Gordon (
g_gecko_69@hotmail.com), November 02, 1999

Answers

Gawd, you know I really loved that movie!!! The catfight between those two gypsy chicks was breathless!!!! Still brings a tingle to my dingle....

-- King of Spain (madrid@aol.cum), November 02, 1999.

That is by far the longest hotlink I have ever encountered in my life.

-- (wow@is.all I can say), November 02, 1999.

That is by far the biggest link I've ever seen.

-- Hawk (flyin@high.again), November 02, 1999.

Woaah, talk about synchronicity!! Almost exactly the same words as wow, and I was just seconds behind you. Lol!!

-- Hawk (flyin@high.again), November 02, 1999.

Gordon,

again, thank you very much; astounding work!

Perry

-- Perry Arnett (pjarnett@pdqnet.net), November 02, 1999.



Somehow, I knew I was going to fuck up my html. I'm good with Access, and a pro with Excel, but I suck at web publishing. Sorry.

Here's the addresses: uly 1999 Russian Oil and Gas Exports Fact Sheet http://www.eia.doe.gov/emeu/cabs/rusexp.html

September 1998 Russia: Energy Situation Update http://www.eia.doe.gov/emeu/cabs/russar.html#TAB1

Caspian Maps and Graphs http://www.eia.doe.gov/emeu/cabs/caspgrph.html#TAB3

Germany, Ukraine, Italy, Poland and Czech http://www.eia.doe.gov/emeu/cabs/germany.html

http://www.eia.doe.gov/emeu/cabs/ukraine.html

http://www.eia.doe.gov/emeu/cabs/italy.html

http://www.eia.doe.gov/emeu/cabs/poland.html

http://www.eia.doe.gov/emeu/cabs/czech.html

Gershwins testimony http://www.senate.gov/~y2k/hearings/991013/st991013gershwin. htm

Other International Testimony http://www.senate.gov/~y2k/hearings/991013/

Senate 100 day report http://www.senate.gov/~y2k/documents/100dayrpt/

Gogertys testimony http://www.senate.gov/~y2k/hearings/991013/gogerty_intl.pdf

Y2K Russian Style - Stanislav Lunev http://216.46.238.34/articles/?a=1999/10/26/34625

Koskys Statements http://chicagotribune.com/version1/article/0,1575,SAV - 9904220173,00.html

And here's those stories for educational use only:

116--US State Department takes Y2K measures for Russia, others Washington (Platt's)--1Nov1999/108 pm EST/1808 GMT The US State Department will allow non-essential employees and their family members to leave Russia, Belarus and Ukraine prior to Jan 1 because of fears of year 2000 computer problems. "In particular, we are concerned about potential disruptions of energy supplies that may impact the health and safety of US citizens" living or traveling in those countries, the State Department said in an Oct 29 advisory, adding "prolonged disruptions in energy supplies in Russia could put other systems dependent on electrical power at risk." US embassies and consulates in Russia, Belarus and Ukraine will remain open and available to provide emergency assistance for US citizens, the State Department said. --Platt's Global Alert-- [0116] [GM] [N] [QQ]

No millennium bug chaos in Russia, says official By Michael Steen MOSCOW, Nov 2 (Reuters) - The official charged with handling the millennium computer bug problem for Russia said on Tuesday he could "boldly declare" his nation safe, although the atomic power agency said there might be minor systems glitches. The United States has said Russia is "somewhat prepared" to prevent potential mayhem when computers across the globe switch their date to January 1, 2000. Experts worry that older computers controlling systems from nuclear power stations to automatic teller machines might get confused with the two zeros at the end of 2000 and cause chaos. "I can boldly declare that nothing anywhere near as terrible will happen as we are presently being frightened with," said Russian Deputy Prime Minister Ilya Klebanov. As well as being charged with Y2K problems, Klebanov is in charge of Russia's defence industry. "That said, we are taking precautionary measures," he told Ekho Moskvy radio. Klebanov said Russians would notice nothing more than the results of the odd "non-critical" system malfunctioning. U.S. authorities have signalled concerns about Russian readiness for the onset of the millennium bug by allowing non-essential embassy staff in Moscow to take leave. U.S. officials have warned that basic services such as heat, water and telephones may not work. Klebanov said there was no reason for anyone to avoid Moscow over the New Year. "What is there to fear in Moscow? The ministry for nuclear power has reported that the problem is solved. Moscow energy authorities will (also) solve it by mid-December," he said. However, RIA news agency quoted the state-owned company which runs most of Russia's nuclear power stations as saying that some auxiliary systems might be affected on December 31. It quoted Rosenergoatom as saying it found no problems with the safety of main atomic power generating units but auxiliary systems, including power supply units, might be affected. Rosenergoatom was not immediately available to clarify its reported remarks nor how problems at the power supply units might affect the operation of the power stations as a whole. Klebanov also played down any worries with Russia's nuclear weapons arsenal, the world's second largest. Russian and U.S. military personnel have agreed to spend New Year's Eve sitting side by side in a missile command centre in Colorado to prevent either side thinking the other has launched any of the missiles in their massive nuclear arsenals. [G] [C] [D] [E] [M] [O] [T] [U] [MTL] [GRO] [SOF] [OIL] [CGO] [RNP] [RU] [NEWS] [EMRG] [EEU] [ASIA] [EUROPE] [US] [Y2K] [SCI] [AER] [LEN] [RTRS]

TABLE-Russia Jan-Oct oil output/exports detailed MOSCOW, Nov 2 (Reuters) - Russia's crude oil and gas condensate output rose in the first 10 months of this year to 253.413 million tonnes from 252.549 million tonnes in January to October 1998, the Fuel and Energy Ministry said on Wednesday. But crude oil exports to destinations outside the Commonwealth of Independent States fell to 93.801 million tonnes from 98.554 million tonnes in the same period last year. The following preliminary data was supplied by the Central Dispatch Unit of Russia's Ministry of Fuel and Energy. All figures are in million tonnes. RUSSIAN JANUARY-OCTOBER CRUDE OIL, GAS CONDENSATE OUTPUT/NON-CIS CRUDE OIL EXPORTS 1999 1998 LUKoil* 44.440/13.351 44.322/16.668

Surgutneftegaz 31.096/10.160 29.202/11.832

YUKOS 28.338/12.198 28.389/ 9.563

Tatneft 20.032/ 6.375 20.427/ 6.675

Tyumen 16.600/ 5.228 16.439/ 5.964

SIDANKO** 16.232/ 3.983 16.671/ 5.036

Sibneft 13.658/ 4.357 14.521/ 4.876

Bashneft 10.255/ 3.238 10.767/ 3.083

Rosneft 10.434/ 4.414 10.587/ 5.391

Slavneft 9.934/ 3.394 9.812/ 3.793

Eastern Oil*** 8.757/ 0.315 8.937/ 3.023

Gazprom 8.125/ 1.543 7.837/ 1.868

Onako 6.633/ 1.768 6.569/ 1.577

KomiTEK 3.020/ 1.251 2.905/ 1.196

Rostopprom 0.295/ 0.088 0.287/ 0.069

Grozneft 0.126/ 0.0 0.818/ 0.566

Ingushneftekhimgazprom 0.115/ 0.104 0.100/ 0.083

Small Russian producers 7.640/ 2.619 7.470/ 3.744

Companies with foreign shareholding 17.440/ 7.222 16.166/ 7.521

Total Russia through Transneft 253.413/90.575 252.549/96.106

Transit through Russia Azerbaijan 1.663 1.980

Kazakhstan 6.534 2.866

Turkmenistan 0.576 0.0

Total Transneft 99.348 100.952

Routes other than Transneft**** 3.226 2.448

Total exports 102.574 103.400

* LUKoil's oil and gas condensate output data does not include production by LUKoil's joint ventures operating in Russia. ** Bankrupt SIDANKO unit Kondpetroleum, which produced 2.084 million tonnes in Jan-Oct 1999, down from 2.136 million in the same period in 1998, was bought in October by Tyumen Oil Company *** Controlled by YUKOS. **** Some companies export crude by sea tankers, filling them at ports close to offshore oilfields, or by rail, so bypassing Transneft, the Russian crude oil pipeline monopoly. ((Moscow Newsroom, +7 095 941-8520 moscow newsroom@reuters.com))

UK companies see perils in Russian ventures By Dominic Evans LONDON, Nov 2 (Reuters) - British companies venturing into Russia's post-communist business world face perilous challenges from the country's economic woes, rampant corruption and a confused legal framework, businessmen told MPs on Tuesday. They said Russia's tortuous road to a market economy had only just begun and compared Western investors in Russia to pioneering frontiersmen. "Certainly it sometimes feels like the Indians are circling the wagons," BP Amoco's Director of Government Affairs Howard Chase told parliament's foreign affairs committee. Chase said corruption in Russia "reaches deeply into the fabric" of government and business, while the troubled economy suffered from a chronic lack of investment. Resistance to competition remained among the elite, as did suspicion of foreign ownership in business, he added. Companies trying to establish a footing in the Russian Federation faced complex and often contradictory legislation. "'Maze' is a kind description of the legalities you have to fight," he told the committee. Many investors had overestimated the country's capacity to switch almost overnight from a command to a demand economy. "Money was tipped into Russia at a greater rate than the market could productively use it," he said. Barclays Bank's Group Risk Director Alan Brown agreed businesses may have piled into Russia too fast. "We were over-optimistic. (Western companies) participated in trying to finance a rate of change which was unsustainable," said Brown. Barclays closed its representative office in Russia in June and says business, both in money transfers and bank accounts, has fallen. Few business representatives saw signs of a swift upturn in Russia's economic fortunes. "Russia is frequently referred to as Tomorrow Land. I would not now go out and say to companies go out and invest in Russia," said David Cant, executive director of the Russo-British Chamber of Commerce. "That would be irresponsible." "But, done by companies with their eyes open, it can pay off," he said. David Riley of the International credit rating agency Fitch IBCA said there were particular concerns over lack of government control over spending by state departments. He predicted Russia's economy, now roughly the size of Denmark's in terms of GDP, was likely in the near future "to trundle along the bottom with periodic crises". "It is not an economic superpower. That it has the potential is clear...but there is much that has to be done in terms of transformation," he said.



-- Gordon (g_gecko_69@hotmail.com), November 02, 1999.


Gordo: LOVE the looooong link.....do you mudwrestle?

-- preparing (preparing@home.com), November 02, 1999.

Ooooh, Preparing feeling a bit feisty this eve? Didn't you say you had a hubby? Shame, shame, naughty, naughty, tisk, tisk, tisk.

-- My Kids Mom (Dr.@Laura.Sclessinger), November 02, 1999.

Gordon: You continue to provide the most informative and trustworthy data on the oil sector, bar none. Thanks again for all your hard work.

God Bless your mother, and

Godspeed,

-- Pinkrock (aphotonboy@aol.com), November 03, 1999.


Russian troops used chain saws to force their way into the headquarters of the Transneft oil pipeline on Thursday and install the newly appointed head of the company in his office.

Gotta love their style though...

-- a programmer (a@programmer.com), November 03, 1999.



Here's a second reason "why you should care"

Russia has the biggest thermonuclear arsenal on the planet. It has the biggest arsenal of biological weapons on the planet. It has a large, extensively developed civil defense system. It has an extensive anti-ballistic missle system. It is ruled by people who do not consider nuclear war to be "unthinkable" or "unwinnable."

Russia's leaders consider the western doctrine of "mutually assured destruction" to be an irresponsible, incomprehensible default on the first responsibility of any government, the protection of the citizenry from external military threats. They're right, it is.

We're going to have some real problems from this quarter. You can take that to the bank (if it's still open).

Thank you Mr. Gecko, great post.

-- Not Whistlin' Dixie (not_whistlin_dixie@yahoo.com), November 03, 1999.


Gordo,

I think you might be right but I'm skeptical.

I've endured 6 different month+ trips into Russia, Ukraine and E Europe studying the post commie oil biz. I've worked with Kortes (formerly the largest Russian private oil info co.), the Hermes Group, the Moscow Oil Exchange and had numerous Moscow meetings with TransNeft, Neste, Sidanko, Mark Rich's group and several others. I was the US rep for Valeri Neverov, Vladimir Moryzhenkov, the Hermes Group for years and did business plans for them on their NYMEX seat acquisition and their international expansion.

Here's why I think they might be OK and I'll concede its unfortunately based on one Moscow area refinery tour. The whole refinery was archaic - like 40s and 50s technologies. It was originally built in '38 and nothing was newer that a cat cracker installed in '83. IT WAS ALL ANALOG. I didn't see any electronics. It had maybe 20 to 30 times the staffing of a western refinery. I was told their pipelines are the same way-ANALOG, gagues, pumps, meters, everything. Most of the product still goes out by railcar! Another vulnerability would be their power grid. I can't comment on that but if any country is used to unstable electricity, its Russia.

I really don't know. My contacts over there went south with the '98 Ruble crisis and my corresponding compensation crisis but I thought I'd interject my limited, ugly experience over there. I actually think a place like Cuba or rural Ukraine might be an ideal place to ride this thing out. They're still using alot of field oxen/horses and they won't notice any difference.

Any computers they have are toast. Its all pirated software. And its totally top down management. Boris the Boss will say 'fix it' and he'll be oblivious to probs, objections or feedback. He'll be the one that suffers if it does sputter, or at least his offshore account will...

-- Downstreamer (downstream@bigfoot.com), November 03, 1999.


Downstreamer--

Can we assume that MOST of their chainsaws are onalog?

-- Michael (mikeymac@uswest.net), November 03, 1999.


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