Russia

  • 12 Sep 2007 at 11:28 AM
  • Russia

From Russia During Love

Russia taking hump day quite literally… and getting the day off (U.S. workplace stress reduction initiative anyone?).
Officially, Russians are calling the holiday “family contact day,” which sure beats Rosh Hashanah (you mean there are cooler things to blow than the shofar?).
Russia needs to raise its birth replacement rate soon, or else batty oligarchs won’t have minions to strongarm or masses to repress (every good oligarch needs minions and repressed masses). At Russia’s current rate of replacement, the evil geniuses (genius is such a strong word) running the country will have 40 million fewer people to repress by mid-century.
Russian ‘sex day’ to boost births [BBC]

  • 22 Jun 2007 at 9:14 AM
  • BP

BP forced to take the money in a Putin-hosted game of Deal or No Deal

BP “sold” its share of a Siberian gas field to Gazprom this morning for the better part of a billion dollars, at the polite behest of Vlad Putin. BP teamed up with three Russian oligarchs to form TNK-BP, which controlled the majority stake in the Kovykta gas field. Russia has been trying to oust TNK-BP from Kovykta, which holds as much natural gas as Canada (ie – Russia is big), because the joint venture wasn’t meeting production targets. With Putinprom into the mix, all licensing and regulatory issues are resolved, according to the official KremlinKomment.
BP put $600mm into the project so far and insists that the sale was exactly how the company drew it up. In fact, BP was just warming up the gas field, awaiting Gazprom’s forced takeover. BP’s awkward compliance, from the Wall Street Journal:

BP officials have stressed that Kovykta has no value in its current state, with the prospects for export routes uncertain and little infrastructure near the field. They repeatedly have said they wanted Gazprom to have majority control of the project because it has a monopoly on exporting Russian gas and officials had hoped to sell output to markets in China.

TNK-BP still remains a significant part of BP, which poured $8bn into the venture in 2003. The partnership accounts for 1/5th of BP’s global reserves, 1/4th of its production and 1/10th of its global profit.
BP Sells Stake in Russia Gas Project [Wall Street Journal]

Blankfein Sees Red

Hoping to capitalize on Russia’s “huge potential,” Goldman Sachs announced (for the second time) that it will add 25 bankers to its Moscow office, bringing their total to about 100 by the end of the year. Why didn’t Goldman move in for the kill (particularly in the commodities sector) sooner? Oh, some legal stuff. A question as to whether or not corruption would “mesh” per se with the GS aethestic. Things like that.
“There are a lot of things to do’ in terms of getting rid of corruption in some parts of the economy and creating legal certainty,” Alexander Dibelius, who oversees Goldman’s business in central and eastern Europe told Bloomberg. But that doens’t mean “we should limit our presence here, it just tells us that we have to be conscious about what business we can do and what business we can’t do…And I could definitely see over the near term our Russian business overall going to an interesting triple-digit million- dollar figure in terms of revenues,” Dibelius noted.
Right now Goldman is fighting with Deutsche Bank AG and Barclays Plc in a “tremendous war for talents.” GS managing directors dealing with corporate mergers and stock/bond sales in Russia are earning $7 million plus a year, versus the 2-3 million that guys (and girls) doing the same work in New York are making. Compensation rose 25% for bankers last year in Russia, on account of a 5-year oil boom, a record number of IPOs, and Russia’s place as the fastest growing major European economy.
In other news, the Dr. Omar bin Sulaiman, Governor of the Dubai International Financial Centre (DIFC), inaugurated the new office of Goldman Sachs at the DIFC, opened on account of Dubai’s great public schools.
Earlier: Commie Schadenfreude
Goldman Expands Moscow Office to Tap `Huge Potential’ [Bloomberg]
Goldman Sachs opens office in DIFC [Gulf News]