Just as we see Russia combining military and energy deals in Venezuela and Cuba, China is doing the same thing with both Venezuela and Brazil, as the following report details.  China has increased its importation of oil from Brazil, is cementing agreements to further that trend, and is doing military and oil deals with Venezuela as well.    With both Russia and China combining military and energy policy for national security purposes,  Americans must ask what its government is doing to secure its energy future in the face of …

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As the following report by Platt’s describes in more detail, Russia is moving to control oil assets in Venezuela and Cuba. This move coincides with Russian military alliances with Venezuela and with Russia’s new sense of wealth and entitlement that seems to be pushing Russian diplomacy toward aggressive confrontations with the west.  Russia’s swift military reaction to Georgian aggression in the vicinity of an important oil pipeline that feeds Europe is part of the same picture.  Russia, already the world’s largest oil exporter, seems clearly determined to aggregate increasing …

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There’s been an official denial by Finance Minister Alexei Kudrin at the global economic conference in Brazil that Russia is playing a role in restricting global oil output.  But the fact is that Russian oil firms are only shipping 75% of normal exports in November.  It seems more than coincidental that Russia would cut oil exports just as OPEC is also cutting exports to support or raise the price of oil, particularly since the Russian government determines the export tax which in turn determines the amount of oil that …

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The following report from Reuters indicates Russia was able to increase oil production after a period in October after a period of apparently unsought reduction in oil output.  Russian October oil output highest in year Mon Nov 3, 2008 7:31am EST MOSCOW, Nov 3 (Reuters) - Russian oil production in October rose to its highest in 2008, to 9.86 million barrels per day (bpd), data supplied by Russia’s Energy Ministry showed on Monday. Oil exports from Russia via pipeline monopoly Transneft TRNF_p.RTS stood at 4.21 million bpd, slightly up …

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Russian Oil Output May Fall 1.5% Next Year, Lukoil’s Fedun Says By Stephen Bierman and Greg Walters Oct. 29 (Bloomberg) — Russian oil output may fall 1.5 percent next year as the country struggles with aging fields, OAO Lukoil Deputy Chief Executive Officer Leonid Fedun told a conference in Moscow today. Output in Russia’s oil heartland of western Siberia is flagging as older fields mature and companies invest in harder- to-reach regions to tap deposits. In July, parliament approved tax breaks championed by Prime Minister Vladimir …

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The Export Land Model got another piece of strong evidence recently from a report by Bloomberg that Russian oil production dropped .4% in September (boy, that’s quick - seems likely to be revised) but exports dropped 10%!  If true, it almost sounds as though Russia is building some above ground strategic storage capacity.   On the other hand, it also must reflect the arithmetic truth that an oil exporting country with a growing economy will export less oil each month than its production would otherwise suggest, since they …

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Rough Seas This is just simply tough, this business of unwinding the radically leveraged bets of unregulated financial institutions - investments banks and hedge funds - and the unregulated bets of radically leveraged institutions - banks, Freddie, Fanny.  Bear may be followed  by Lehman.  Now hedge funds are liquidating and dropping like pop-ups just past the infield as their investors pass the threshold of acceptable pain and call back what’s left of their funds.  In the wake of hedge funds’ liquidating sales the real worth of great companies like …

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I’d like to keep an eye on how Russian oil and oil product exports behave going forward.  For some crazy reason I have a feeling they will be headed down.  Well, maybe the reason is not so crazy.  It’s based on the fact of monopoly pricing.  Oil and products in Russia are pretty well controlled at the top these days, so the country  operates very much like a monopoly.  Like any monopoly, its profits are maximized when it produces less than it is able to produce because reduced exports will …

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A series of reports by EnergyTechStocks.com suggests that the prospects for Russian oil production going forward are fairly grim.  That sounds about right.  Russian producing fields are old and therefore likely to face increasing decline rates; new fields that could be exploited present difficult technical challenges that apparently require the sophisticated capabilities of western companies; non-state entities have been unfairly exploited by the Russian government over the past few years and therefore western companies are reasonably becoming reluctant to invest in Russia; and the motivations of the Russian government …

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If evidence is needed that the Export Land Model works, Russia has provided it in spades.  The report posted below notes that while production was down in the 1H08 by .8% compared with 1H07, exports suffered a decline of 5.2%.  The implication is that Russian domestic demand ate up the difference between production and exports. 

Of course, that is not necessarily so, as George (Gershwin) once noted.   It could be that Russia simply built its own inventories for whatever (hoarding) reasons.  Or it could be that what seems true …

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The reality that’s been revealed by Russia’s Georgia adventure is captured in the following statement by Prof. Steven Blank at Penn. State: ““Russia’s energy objective is to monopolize all Caspian energy flows to Europe, so that it can then blackmail Europe and force political changes to European policy,” Prof. Blank said.

That is the new national security challenge presented by Russia that I discussed recently.  It’s historical and strategic dimensions are set forth in a excellent piece of journalism published today in the Globe and Mail and …

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I recently had lunch with a top U.S  Department of Energy executive.  He’s “in charge” of half the world - mostly the half that exports oil.  This very charming individual was unable to define what the present U.S. energy policy is.   I suppose he understands, but cannot admit publicly, that our policy under the present nitwit administration is to give oil companies and oil supply companies, e.g. Halliburton, everything they want - tax breaks, drilling rights, lack of oversight - and to give the 44 farm-state senators a mandate …

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News Feature Transit States Russia’s relations with countries that host pipelines shipping oil and gas westwards, many former Soviet Union states, have been characterised by frequent disputes. Georgia, which is in conflict with Russia over two separatist regions, has two pipelines crossing it, bringing oil and gas from Azerbaijan to Turkey. They are the first routes to take Caspian energy to the West that bypass Russia and are particularly valued by the European Union, which is anxious to reduce its dependence on Russian energy. …

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The Chair of BP is quoted by Reuters (below) saying that the recent Russian tax reduction on oil companies will lead to production increases in “a year or two.”  Which often means three or four.  In my view the reality is that Russian production can increase if Mr. Putin wants it to do so.  The new tax reduction still leaves a very high tax rate in place.   It is not clear what Mr. Putin truly wishes, but it seems geologically possible that Russia can increase production if it so desires …

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A well-respected Dutch consultancy supported by substantial corporate interests including Shell has issued a report that warns of severe oil price shocks starting in 2010.  As my readers know, I have been suggesting a similar time frame for severe oil shortages based on my reading of predictions for supply constraints by many analysts and by the Wikipedia Megaprojects works. I have not analyzed the report in depth but my reading of the summary found aspects that were confusing.    For example, the report blames Mexico and Russia …

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