OIL GIANT BP, QUITS RUSSIA

The question I'd like this thread to look at, investigate, speculate on and, of course,
debate, is: will the costs of Putin's Ukranian Adventure, make it worthwhile, in the end?

There were indications that Putin's own Supreme Council, felt that this was a bad idea, but were going along, only out of fear of Putin. Though Putin has the reputation of being skillful in his risk/benefit analyses-- some might even call him, "savvy" -- this campaign, already, has been underperforming the expectations, of Russia's military forces; the response from other nations, while brushed- off, by Putin, has been more robust, & coordinated, certainly, than he'd anticipated, both in regard to economic sanctions, as well as (with the fighter jets, now being sent by the EU) in the military equipment, the EU is supplying; and, perhaps most importantly, there is a great deal of skepticism, and even some very brave protestors, within the Russian population, itself.

To all that, I am here, adding another dimension. Whether one wishes to attribute it to a Corporate, Ethical Conscience, or just the self- interested efflux of business, resulting from negative public opinion, the bad P.R. of Putin's blatant power grab (showing impatience, uncharacteristic of the Soviet tradition and, from my impression, of Putin's prior machinations), is now being felt in the desertion of Russia, by some Western Corporations. I cannot believe that Putin had calculated, adequately, for the hit that Russia's economy (& his own pocket) will suffer, from these business defections.

The one with which I begin this thread, has got to hit hard. British Petroleum, the biggest foreign investor in Russia, is selling off it's entire stake in Rosneft, a main supplier of Russian oil. One is always hearing, how Russia is dependent on foreign companies, for its oil drilling, so losing its access to this financing, not to overlook BP's expertise, and probably Western equipment, as well, must hurt.

As this situation continues, however, the article notes that this move by BP, will only ratchet up the pressure on other companies, like Shell Oil (British), or TotalEnergies (French), to follow suit. The great expense to BP, of this departure-- accounting for a third of BP's oil & gas production, and about half of its reserves-- did not prevent them, now taking the step. Just last week, I will note, BP had said it would comply with Western sanctions, but stick with its Russian business.

What a difference a week makes, as the world's admiration builds, for the bravery of the resisting, Ukranian patriots, and Russia's image sinks, ever- lower. I can imagine China's Xi Jinping, watching from the sidelines, and thinking, "TikTok."


[SNIP]
LONDON (Reuters) - BP is abandoning its stake in Russian oil giant Rosneft in an abrupt and costly end to three decades of operating in the energy-rich country, marking the most significant move yet by a Western company in response to Moscow's invasion of Ukraine.

Rosneft accounts for around half of BP's oil and gas reserves and a third of its production and divesting the 19.75% stake will result in charges of up to $25 billion, the British company said, without saying how it plans to extricate itself.

"I have been deeply shocked and saddened by the situation unfolding in Ukraine and my heart goes out to everyone affected. It has caused us to fundamentally rethink bp's position with Rosneft," BP Chief Executive Bernard Looney said.

The rapid retreat represents a dramatic exit for BP, the biggest foreign investor in Russia, and puts the spotlight on other Western companies with operations in the country including France's TotalEnergies and Britain's Shell, amid an escalating crisis between the West and Moscow.

It also underscores growing pressure from Western governments on their companies to curtail operations in Russia as they widen a net of economic sanctions against Moscow.

British Business Secretary Kwasi Kwarteng, who on Friday had expressed "concern" over BP's Rosneft, welcomed the decision.

"Russia's unprovoked invasion of Ukraine must be a wake up call for British businesses with commercial interests in (President Vladimir) Putin's Russia," Kwarteng said on Twitter.

Rosneft blamed BP's decision on "unprecedented political pressure", Russian news agencies reported, saying 30 years of successful cooperation had been ruined.

Susannah Streeter, senior investment analyst at British retail stock broker Hargreaves Lansdown, said it will be "highly difficult" for BP "to recover anywhere near what was considered to be the full value" of Rosneft.

Last week, Looney said that BP was sticking to its Russian business and would comply with any Western sanctions on Moscow.

[END SNIP]

https://taboolanews.com/article/b55..._news&dc_data=2497843_tracfone-portal-mysites

 

It's my understanding that when it comes to oil/gas exploration and drilling technology Russia is dependent on the expertise of foreign companies. If what I've heard is right the prospect of western energy companies refusing to deal with Russia in the future is going to have a profound impact on Russia's main source of revenue.
OTOH, many companies here announced they would no longer give campaign contributions to the roughly 130 Repubs in Congress that supported the coup immediately after 1/6. Many have gone back on their word.

 

Good for BP.

 

At least smart of BP. I don't think they are doing this to "punish" Russia. It is a business decision based on risk and profit.

 

BP are doing it knowing they will take an economic hit. Impressive! Sanctions and actions like these are going to make a HUGE difference and is diminishing Putin by the day.

 

Their stock is down 6%.

 

Every bit helps.

 

HIT #2: The Famously Neutral Swiss, announced that they will be going along with the Banking Sanctions, imposed by the E.U. and United States.

Not being able to depend on Switzerland as a safe haven, any longer, you'd better believe, has Russian Oligarchs worried.

https://www.google.com/amp/s/www.ma...sia-eu-sanctions-will-apply-there-01646000218

[SNIP]
GENEVA — Russia’s invasion of Ukraine has put Switzerland’s much-vaunted neutrality to the test — and along with it, the country’s traditional role as international intermediary and reputation as a safe haven for the assets of Russia’s richest and most powerful.

The Swiss executive branch stopped short of announcing unilateral sanctions against Russian interests after Moscow’s blistering military action in Ukraine. Instead, the Federal Council opted to fall in line with the European Union and pledge that Russian individuals and companies hit with EU sanctions won’t be able to evade them in Switzerland, which is not one of the EU’s 27 member states.
[END SNIP]

additional source:

https://www.google.com/amp/s/amp.usatoday.com/amp/6969216001


PART B:
To guard against runaway inflation, concurrent with the Ruble's free fall, the Russian Central Bank raised their interest rate from 9.5%, to 20%

 

I don't think Putin expected this. When Germany cut off funding for the NORD 2 pipeline, they essentially announced that they were willing to take the hit. Now BP does the same, and I think many others will follow that lead. I think Putin underestimated and miscalculated the lengths to which the rest of the world would be willing to go.

 

And that will be his downfall. One should never underestimate another - especially their 'enemies'.

 

Oh dear, how terrible for Russia. If I were a Russian oil oligarch what ever would I do with an extra 20% share of the oil revenue?

 

Yeah, because Russia was just cutting BP in, to be chummy.


Unfortunately, you may have to keep that extra 20%, in a Russian bank, now that the Swiss have hopped on-board, the sanctions train.

Toot- toot! Runaway inflation, barrelling down the tracks!


(Well, I guess there's also the Russian Stock market-- when they reopen, that is).

 

I think very soon any company that does business with Russia will be viewed as anti-democracy and will automatically and swiftly be boycotted.

Things are not going well for Putin/Trump/Tucker Carlson... and their supporters, it would seem

 

Looks like it will be quite a task for Rosneft without BP distribution, without ports allowing Russian ships in their boarders, without an International bank system to make transactions, without an international market to trade stocks...

Putin definitely underestimated Biden.

 

Not at all the increase of European defense spending alone makes his strategy fatally flawed. He took a passive fracturing alliance with waning support in it's largest contributor, and made it not only relevant, but motivated. While simultaneously pushing the remaining neutral nations into NATO in a manner that would have been unthinkable a few months ago.

Everything else is just shoveling straw on that broken camel.

 

As is often the case, the tyrant's ego, is his undoing.

 

This is slightly different imo he would have gotten away with it much better 20 years ago. The main thing I'm learning from this conflict is ironically the power of Tiktok, and it's put on display something I've suspected for a few years now. That GenZ is growing up with a global culture.

I've got a 17 yo at home who couldn't have cared less about international relations or NATO a week ago watching Tiktoks of dancing Ukrainian soldiers, and women cursing out Russian soldiers and she is furious at Vladimir Putin. Not because he's violating international law, but because Ukrainians seem like nice people. She can not only watch them, but talk to them while watching them.

It's quickly become personal, and both emotionally inspiring to watch their bravery, and emotionally distressing to watch their suffering pretty much in real time.

 

Given the economic sanctions having more of an impact than predicted, NATO alliance being stronger than predicted, and Ukrainian resistance being stronger than predicted, there's no long-term worth for Putin. At best he ends up with a crippled economy and a prolonged resistance in Ukraine that makes Chechnya look like a playground, even if/when he does take the country over. If it ever does end up working out in Russia's favor, it won't be in Putin's lifetime.

He may be just waiting out for some kind of negotiation that let's him save face now that this has backfired on him. But he doesn't seem to be a rational actor at this point, and that worries me more than anything.

 

I agree, and I think this is becoming the most common belief, that Putin is not as stable, does not have his emotions as tightly under reign, as in the past. His success, ironically, served to set him apart from others; and then Covid came along, increasing his isolation, and giving him more opportunity to live in his own mind, absorbed with his own thoughts or, with the thoughts of the small circle around him. This is the same, fertile ground, which makes the ideal soil, for any cult.

Those around him, in fact, had already been initiated into the same brotherhood, baptized in paranoia, and confirmed in KGB- style, conspiratorial thought. And, of course, all were dedicated to the same mythology, of leader Putin.

Life is nothing, if not ironic, and it was Putin's former successes, along with less than top-notch competition from other foreign leaders, and maybe a bit of luck, that inflated his sense of invulnerability, and disposed him towards a diminishing of patience, and just enough sloppiness-- like a drug smuggler, who'd not been caught, on many runs-- to ensure his downfall. Because of his long ride, however, it is all the more traumatic, to have his inner illusion of self, come into conflict with outer reality. That's why I think that, if Putin is going to be able to step back, off of his ledge, it will be sooner, rather than later.

In fact, if he were able to swallow his pride in the next few days, the sanctions would soon be rescinded. Sure, there will have been some lasting damage done, to his image, but I think the scenario you painted for his future, above, would be avoidable. The more disfigured, however, that image, from being ground in the mill of public humiliation, the less acceptable, I would guess, it will become, to his own psyche. And that's when, if ration is subservient to emotion, consequence can be thrown to the wind, letting recklessness rule the day.

I don't feel, therefore, we can release our communally held breaths, until it is seen whether Putin will greet this watershed moment, like a pissed off spirit, indignant enough strike at Satan, himself, or if, knowing that the empire of his aspirations has now gone up in smoke, that multinational cooperation will forever after, keep him in his place, he will still be able to face himself, in the mirror.

 

To give the full quote:

"Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men, even when they exercise influence and not authority, still more when you superadd the tendency or the certainty of corruption by authority." -- John Dalberg-Acton

 

That Putin was corrupt, was never in doubt, but that would not have needed to have led to his downfall (& it would be premature, to call him "down," yet-- only stumbled, and low, but unwilling to kneel). So the grand exploits of Ego, to which I'd referred, certainly need not have arisen from corruption. For that matter, one can be undone by one's delusions of grandeur, even without being corrupt, or powerful. When one is those things, however, then many more people stand to be harmed, by their Ego- driven flameout.

 

This is now overlapping with ideas in my other thread, Is Putin Sane?, but here are a couple of possible suggestions, for his atypical behavior, which I've heard:

1) BRAIN FOG, as a result of an earlier Covid infection.


2) Age- related, mental decline/ early- stage Alzheimer's. With the caveat, individuals vary greatly, so "averages," only truly apply to someone we know to match the statistical average (which is not usually the case), Putin is 72, in a country in which the average male lifespan, is 70 years.
But Putin gets better health care.

 

Hmmm. Wasn't it Trump who sanctioned anyone working on the NS2 stopping its production?
Wasn't it Russia loving Biden who reversed those sanctions the day he took office allowing Russia to stranglehold the European nations once operational?
Wasn't it Trump who provided lethal weapons to Ukraine and Biden who refused to provide Ukraine with lethal weapons while in office with Obama and again while president all the way up until Ukraine was attacked?

That would mean you support Bidens decisions to support Russia in its efforts to get control of all gas going to Europe.
So remind us, who is supporting Russia again?

 

Excellent news, bit of a surprise.

 

After fighting against other sanctions and otherwise licking Putin's boot.

Biden did so at the request of Germany, not Russia. And those sanctions are now back.

Nope. A bipartisan Congress provided those weapons. Trump was, at best, an empty suit in the affair. Oh, and he also illegally tried to withhold that aid.