Transcript Impact of Oil On Russia’s Economy

Oil in the Russian
Economy
By: Eugene Hohlov
Plan
History Of
Russian Oil
Exportation of
Russian Oil Today
Future of
Russian Oil
Plan
History Of
Russian Oil
Exportation of
Russian Oil Today
Future of
Russian Oil
History of Russian Oil
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Russian Empire, Czar ruled, pumped oil from Azerbaijan
http://www.users.qwest.net/~kryopak/OilGasNews.htm
History of Russian Oil
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Nationalization (Revolution)
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Lenin
Natural resources (Gas + Oil) belong to the
government after 1917
History of Russian Oil
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WWII – “Enemy at The Gates”
 Stalingrad
http://www.thehistorychannel.co.uk/classroom/gcse/pics/stalingrad_map.gif
History of Russian Oil
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Oil Found: * West Siberia * Komi * Volga / Ural
History of Russian Oil
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Early Nineties (1991-1992)
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Collapse of Soviet Union
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Caspian Sea Oilrigs become part of Azerbaijan
Privatization of Oil Industry
 Creation of new independent companies
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Yukos
Sibneft
TNK
History of Russian Oil
Oligarchs
Berezovsky
friends of ex-president
(ex-richest person in Russia) owned Sibneft oil
Outstanding
Currently
warrant on his arrest, assets confiscated
lives in London
Khodorkovsky
Worth
= $8 billion (the richest man in Russia) owns Yukos oil
Currently
Abramovich
Worth
Lives
lives in jail awaiting trial, assets frozen
(future richest person in Russia) owns Sibneft oil
= $5.7 billion
in London, selling off his assets. Future target for arrest
History of Russian Oil

1st Civil War for oil 1994-1996
Chechnya
 45%
of Russian oil

History of Russian Oil
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Czar
Revolution
WWII
After WWII
Early Nineties
Chechnya
The Game Plan
History Of
Russian Oil
Exportation of
Russian Oil Today
Future of
Russian Oil
Russian Oil Today

Number 1 Producer of oil in the world (20022003)
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Russia is pumping 8.3 mm bpd
OPEC
Number 2 Exporter of oil in the world

Russia is exporting 5.4 mm bpd
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More than 25% Of Russia’s Revenue is from
Oil Exportation
Russian Oil Today
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Capital
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Old equipment
Starting to improve
Schlumberger
 Baker Hughes
 Halliburton
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Russian Oil Today
http://www.lib.utexas.edu/maps/commonwealth/soviet_pet_deposit_82.jpg
Russian Oil Today
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Foreign investors
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Improving efficiency of oil extraction
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To reduce dependency on Middle East
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China
Japan
Europe
United States
Russian Oil Today
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International Companies Invest in Russian Oil
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ExxonMobil (largest company)
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Maraphon
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Reserves of more than 21 billion barrels of oil
? Looking to buy YukosSibneft (9.8 bn barrels) ?
? YukosSibneft (4th largest company) ?
Invested in one of Ural oil companies
ChevronTexaco
? Looking to buy a share in YukosSibneft ?
 BP invests 1/8th of all capital into Russia
 Bought 50% of TNK
 Forming TNK-BP
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Yukon-Sibneft
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On November 28, 2003
YukosSibneft merger
called off.
Yukos Stock in freefall
Government interference
http://news.bbc.co.uk/2/hi/business/3245884.stm
Russian Government
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Increased Taxation
Nationalization of Oil Fields?
War against Oligarchs
http://www.jbs.org/error_docs/not_found.html
www.dulug.duke.edu/ ~icon/pictures/
Plan
History Of
Russian Oil
Exportation of
Russian Oil Today
Future of
Russian Oil
Future of Russian Oil
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The latest events lead to ?
Government controlled oil
fields?
 Oligarchs stay in power?
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http://www.mcli.dist.maricopa.edu/show/magic/images/crystal-ball.gif
Future of Russian Oil
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Chechnya 1st & 2nd Civil War
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45% of oil produced was produced in Chechnya
http://www.ciai-s.net/chechnya.jpg
Future of Russian Oil
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World problems with Middle East
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Increases Russia’s exports of oil
OPEC has no control on extraction and
exportation of Russia oil
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Russia promises to join and follow?
Government ?
 Oligarchs ?
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www.index.hu/politika/ kulfold/irakmiert
Future of Russian Oil
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Doubling of Taxation on export of oil
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Government making 25% of its revenue
More expensive to export
 Effect of drop in price on oil
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Exportation
Extraction
Investment
temagami.carleton.ca/jmc/ cnews/22101999/taxes.jpg
Future of Russian Oil
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Long Term Goals:
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Build Refineries
Produce inside
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Kerosene
Mazut
Aircraft fuel
Gasoline
http://www.godardgallery.com/oil6.htm
Future of Russian Oil
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Government
What is Better?
Oligarchs
Questions?