November 21, 2012

Putin Turning Russia into One Big Enron

Anders Aslund, Moscow Times

AP Photo

In a few quick decisions, President Vladimir Putin has devastated Russia's energy policy. This daring radical change of strategy will primarily hit state revenues. The essence of these policy changes is renationalization, a massive increase in capital expenditure and reduced efficiency. For years, Gazprom has carried out too large capital expenditures, 70 percent of which investment analysts euphemistically with call "value detraction," which really means corruption or waste. Now, Putin has decided to drive it to new heights. This month, Gazprom went ahead with its South Stream project, which is supposed to cost $20 billion, but will probably cost twice as much. Its sole purpose is to circumvent Ukraine. For the same reason, Gazprom plans to build two more Nord Stream pipes at a cost...

Read Full Article ››

TAGGED: Gazprom, energy, oil, Vladimir Putin, Russia

RECOMMENDED ARTICLES

November 8, 2012
The Corruption of Putin's Inner Circle (PDF)
Henry Jackson Society
The Shvalov affair exposes the corruption of Putin's Russia. more ››
November 18, 2012
Complicated Geopolitics of Euro Decline
Walter Russell Mead, TAI
The gradual decline of European powers in global politics is affecting some more than others. These days, Russia may be the European country where that decline is most keenly felt. more ››
November 13, 2012
What Global Energy Looks Like in 2035 (PDF)
Int'l Energy Agency
Taking all new developments and policies into account, the world is still failing to put the global energy system onto a more sustainable path. The New Policies Scenario, our central scenario, shows that several fundamental... more ››
November 19, 2012
Energy Security Problems Shift to Asia
Chatham House
  There is a heavy agenda for President Obama during his three day visit to Cambodia, Thailand and Burma. At the East Asia Summit he will join Asean leaders plus representatives from Russia, Japan and China, seeking common... more ››
November 17, 2012
U.S. Energy Will Change the World, Again
Daniel Yergin, Financial Times
American energy independence, for decades the preserve of quixotic rhetoric, has become a serious prospect thanks to the resurgence in US oil and gas output. The International Energy Agency this week projected that the US could... more ››