Two Major Events in International Oil: Argentina's Nationalization of YPF and Exxon's "Hostage" Deal With Russia

One of the greatest Latin American success stories was the privatization of Argentina's YPF in July of 1993 against enormous political and labor opposition. The Kirchner government reversed  this hard-won success yesterday with its nationalization of YPF. The nationalized YPF will again become a bloated political rent-seeking machine to pay off Kirchner's supporters. YPF's expropriated partners (mainly Repsol of Spain) will get little.

At about the same time, ExxonMobil signed the only possible deal with Russia's national oil company Rosneft to jointly develop Siberia's energy reserves. The key section of the deal gives Rosneft properties of equivalent value in the United States. This time when Putin decides to expropriate ExxonMobil's investment in Russia, they can take back Rosneft's U.S. holdings. Putin has forced Western energy companies into such "hostage" deals. Let's see if they work.

Much Too Early to Say Putin has Won: Understanding the Big Lie

Today’s gloom-and-doom Times piece concludes that the Russian protest movement “collided with the cold reality of Mr. Putin’s convincing victory” in the March 4 presidential election. Protesters lack a leader and a positive message. Sunday’s demonstrations gave them an opportunity “to cry out together, one more time, for political freedom.” No further demonstrations are scheduled. All is lost. Putin has won.

The White House has signed on to this “Putin has won” version.  After five day’s of hesitation, President Obama called Putin, as the White House communiqué reported, to congratulate him on his March 4 victory. Other Western nations sent more muted messages, but not Obama.

Not so fast. Let’s get this straight. Putin did not win a “convincing electoral victory.” Real elections require an opposition, not the sorry rogues’ gallery Putin allowed to oppose him. His Central Electoral Commission disqualified everyone else. As one protester complained: “We can’t go to the courts. We cannot go to the prosecutor.” The streets remain the only option.

As long as we believe the big lie that March 4 was a real presidential election, Putin can triumphantly declare (with tears in his eyes?) democracy alive and well.  True: Voters went to the polls. Putin might have won even without the ballot stuffing, carrousel voting, and intimidation. But Putin’s “Party of Scoundrels and Thieves” barely scraped by against the shopworn communists and nationalists in the December 4 parliamentary elections. He could take no chances on March 4.

go to Forbes.com

Moscow March 4: Sights and Sounds of Today's Russian Election

Here is an account of the sights and sounds of today’s  Russian Presidential election. As expected, Putin sailed to an easy victory with over 60 percent of the vote.

March 4th Russian Elections – grey day, nothing special…

Gregory Kataev, Moscow

It’s warm, around 0 C, snow melts, wide springs of dark mud near the sidewalks, water-drops fall from every roof, grey day, distant misty sun. I enter the regional election headquarters on Fadeyeva street inside the State Glinka Musical Culture Museum built in mid 70s.

The elections took place on the second floor in a huge lobby with a beautiful stained-glass window on one side. There were many people. Some of them were voters like me. Others were observing the landscape, monitoring the situation. I saw a couple of web cameras on the walls. Two policemen were quietly standing at the entrance to the 2nd floor. The other two were standing on the other side of the lobby.

I came over to the table where there was a sign with several street addresses, including may own. A nicely dressed woman in elegant glasses was sitting opposite me. She checked my passport and address, wrote down my passport number in a huge hard-covered notebook. She asked me to sign and gave me two voting bulletins with the lists of candidates. The  first was for the regional city council, the second for president of Russia. I looked through both. The second list contained no surprises.  The first was full of completely unknown names. I looked at the woman. She smiled at me with her mouth tightly closed and eyebrows arched as if to say: “That’s all I’ve got for you, any questions? “

I smiled in return and said out of earshot of others: “You know, the grocery sections with the small items have variety and freshness, but the main dish menu looks definitely stale.” She looked glanced around and said in a hushed voice: “Everything depends on your taste.” I replied: “They all look tasty, but don’t their labels say they have already expired? She started laughing without emitting a sound. An elderly man behind my back joined in the repartee: “Young man, you’re not in a resort hotel, it’s too late to drink Borjomi.”*

Nevertheless, I read carefully the names of all the regional city council candidates, examined the shining faces of the presidential candidates, made my choice, voted and started down the marble stairs. On my way out, I met my new friend, the elderly man. I smiled at him; he nodded to me and made a deep sigh of resignation.

I went back to the first floor and looked around – there were two wide tables not far from the exit covered with different goods for sale. A temporary first-floor lobby mini-market. There were Chinese toys, Russian sweets, honey, and… American cowboy hats.

How come? - I thought approaching the table.

A young woman greeted me: “Congratulations on the elections!”  She was dressed in a Russian folk costume. “Would you like to buy something?”

“No thank you,” I answered. “Have you already voted?”

“No,” she laughed.  “I will not vote, I have no time, take a look – we have very nice folk artist’s cups, plates and vases.”

“Funny,” I asked: “Why do you have American cowboy hats?”

“Because, except for the Russian things, everything comes from China. She picked up one of the cowboy hats. “These hats are very good, natural leather, and even Americans order them from China.”

Her appearance and her light accent revealed she was not from Moscow, but from some Russian town nearby. She went on: “I took the brown one for my husband.” A serious look crossed her face: “In fact in Russia we could make such hats even better than the Chinese. “

She kept smiling. She wasn’t pretty, but she was very nice with a clear and open face. I imagined her husband in a Russian folk outfit and Chinese American cowboy hat. The visual picture struck me as ridiculous but at the same time touching.

She doesn’t have time to vote. And probably she doesn’t know what’s going on around and for whom to vote. She, and I assume many Russians, are simply out of this issue.

I bought a honey. Russian honey in natural honeycombs.

Outside in the windy open air, a policeman, guarding the entrance, turned to me: “Have you got a light?” – “No, I quit smoking.” – “That’s the right thing to do,” He added – “I’ll quit smoking in my new life.” I asked: “And whom do we have to elect to start a new life?” He looked at me, sizing me up: “You voted for Prokhorov, didn’t you?” I pretended not to be surprised: “How can you be so sure?” He responded: “Nothing to be sure about. It’s enough just to look at you.” I joked: “Can you see through the walls also? So that’s why you’re standing here, right?” He repositioned his Kalashnikov on his shoulder more comfortably and answered with a peaceful smile: “Come on, that’s fine, Prokhorov seems a good guy, at least young enough to change something.” Then he lowered his voice, moved closer to me and said: “Does it really matter for whom you vote?” He abruptly turned from me to stop the conversation, asking a man entering the Museum: “Excuse me, have you got a light?”

The policeman’s choice remained unclear to me.

Walking home I remembered how I was standing on the White Ring round the Sadovoye Kol’tso (Garden Ring) the  previous Saturday, a week back. Passing cars of protesters were joyfully honking at us. People waved from open windows, and we waved back at them with our white ribbons. The high point was a brand new Ford Mondeo police car. Two cops were inside, and both smiled at us, waved and spiritedly honked. Then I came to myself: “Where am I?”  I thought: The guard I just met will probably never get the “new life” in which he can get the motivation to quit smoking.

* Borjomi – famous Georgian mineral sparkling water known for its healing microelements. The Russian expression "It’s too late to drink Borjomi" means that it’s too late to take light medicines and that more radical measures are needed.

Putin Tries to Counter Mass Demonstrations With His Own

The organizers of the planned “For Honest Elections” demonstration scheduled for today (February 4) held their breath. They knew the Moscow temperature would be minus 10 Celsius at noon. Could they get a hundred thousand protestors for the demonstration at Bolotnaya Square? If weather had kept Putin protesters away, the government would cheer that the opposition’s back had been broken.

It is now six PM in Moscow on February 4, and the answer is in. According to organizer estimates, no less than one hundred thousand demonstrators showed up carrying white balloons, wearing white ribbons and carrying signs: “Russia without Putin.”  Aerial photos confirm the massive numbers of demonstrators at Bolotnaya Square.

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Russia, and the Putin Rules: A Pessimistic Assessment

Russia’s “Moscow Winter” is eating away at Vladimir Putin’s KGB state, but it will survive. Putin will be reelected easily on March 4 for a six year term, but he will have lost the halo of popular support. His political base will shrink to those who depend on him for patronage.

He will compensate for lesser popularity with more repression. He will eliminate the last vestiges of opposition and press freedom, but he cannot tame the internet, no matter how hard he tries. He will work to prevent the emergence of a true opposition figure around whom his opponents can rally. Putin cannot produce a strong economy in a regime rooted in corruption. He will embark on an aggressive anti-Western foreign policy to divert attention from his domestic weakness.

Realize that Putin is the CEO of Kremlin, Inc., a state-capitalist network of state companies, political directorships, and offshore companies, which runs the “national champions” of industry, finance, commerce, media, and even state religion. As CEO of Kremlin, Inc., Putin’s remit is to enrich himself and fellow board members, promote state interests as defined by Kremlin, Inc., and insure political survival by all means no matter how unsavory. If the CEO falls, he threatens to pull down Kremlin Inc. with him. The powers that be cannot allow political competition. Only Kremlin Inc. can replace Putin, but with a clone. Regime opponents, basking in the afterglow of their huge demonstrations, must grasp this reality.

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Another Laugh: The Putin Superhero Video (You can enjoy without understanding the Russian)

This music video "Vova Rules" (Vova stands for Vladimir Vladimirovich Putin) -- also called "Putin Superhero" is a blast. It has been banned in Ukraine, where it originated as a music video for the singing group "Dress Code.".