Speculation abounds that Chevron’s Typhoon mini-TLP is floating upside down in the Gulf of Mexico following Hurricane Rita. The company is refusing to comment following the release of a picture which clearly shows a Tension Leg Platform (TLP) adopting a rather worrying stance:


This is how it is supposed to look:


The ironically-named Typhoon Project carried investments of about $256 million. Ouch.

For Richer, For Poorer

Roman Abramovich gets $13.1bn richer. The Russian people get $13.1bn poorer. Vladimir Putin’s grip on the Russian energy market grows ever stronger (Gazprom now controls 30% of the Russian oil industry).

Here’s hoping the western press do more than giggle excitedly over which new yacht Mr Abramovich will buy next, or which new transfers will be arriving at Chelsea. Some hope.

Problem Not Identified, Not Solved

Either Vladimir Putin has failed to identify the real problem here, or he’s pretending it doesn’t exist. Given his track record, both are equally likely:

Russian President Vladimir Putin has vowed that the country’s enormous oil and gas reserves are in no danger of running out, despite flagging domestic crude production growth.

“As for our oil and reserves, they are underestimated – there is enough for generations to come,” Putin said, speaking during a nearly three-hour, televised question-and-answer session with the public.

According to BP’s annual statistics review published in July, Russia is the world’s number-six in terms of oil reserves with 72 billion barrels, and is ranked number one in terms of gas reserves with 1700 trillion cubic feet. Saudi Arabia has most crude with 263 billion barrels, while Iran is the world’s number-two in terms of gas reserves with 950 Tcf.

Russia’s crude oil production growth rate is slowing at a time when world prices are at record highs over supply concerns.

It is not doubts over Russia’s reserves that is keeping investment from pouring into Russia on the back of the high crude price. It is the appalling economic governance of the country along with the bitter experience of investors in the 1990s, the politicised demolishing of Yukos, the umpteen reversals on taxation policies, and the theft of industrial property by the state-backed mafia which is keeping the investors at bay.

They’re Learning

In other Russian oil and gas news, Gazprom is taking the novel approach of not building a pipeline until a requirement for one has been established and its planning finished:

Russian gas giant Gazprom is in talks about laying two pipelines to China, which could each send up to 30 billion cubic metres of gas per year across the border, a senior executive said today.

Alexander Medvedev, head of Gazprom’s export arm said the Russian player was in talks with China National Petroeul Corporation (CNPC) over the new links.

The company will likely focus initially on just one of the possible projects, and construction would not go ahead until all the details were sorted out.

“We don’t like it when the pipelines are lying empty on the ground and that is why we don’t exclude that both projects could go ahead… but we should identify the priority project,” Medvedev said.

Now there’s blue-sky thinking!

Come Into My Parlour

According to the ever-reliable Upstream Online, Russia is considering lowering its taxes for oil companies in order to boost exploration activities:

In comments broadcast on state-owned television, Energy Minister Viktor Khristenko said the government should lower taxation in the oil sector and, in particular, unpeg the mineral extraction tax from global prices to encourage investment in exploration and development of difficult fields. He added that the government was considering introducing tax breaks for oil companies during the development of new fields.

Note the phrase development of new fields. Such is the economic climate in Russia that the large oil companies, having been burned in Russia on previous occasions, are wary of developing new fields and instead prefer to buy into proven reserves. Exploration is a risky business and must be carried out against a foreseeable return on investment, and as with everything in Russia these returns are very difficult to predict over the course of 12 months, never mind one or two decades. Hence exploration activity in Russia has been limited for the past few years and the Kremlin is obviously trying to encourage outside investment into this area.

This is a sensible enough policy, but will it work? Unfortunately, Russia has built itself a reputation of making up tax laws as it goes along, with a change in law sometimes requiring companies to pay hefty sums to the government in back taxes which were never taken into account in the company’s initial business plan. Mikhail Khodorkovsky might know a thing or two about this. Chances are investors will be frightened by the very real possibility that these tax cuts will be reversed once a company starts to develop the field, or some jiggery-pokery will take place forcing the company off the field which it has just spend large sums exploring, to make way for a favoured Russian player to step in.

The Russian government is in effect asking investors to put their faith in a Kremlin tax promise. They’d be better sticking their money on a horse.

Ирония судьбы, или С лёгким паром!

Despite the approach of October both heat and humidity are not improving in the UAE, so watching DVDs is still a valid way to spend a few hours.

Last weekend a friend lent me a Russian film from 1975 called Ironiya sudby, ili S lyogkim parom!, which translates to Irony of Fate, or Enjoy Your Bath! Absolutely everybody from the former Soviet Union knows this film by heart, especially since TV stations have taken to showing it every new year without fail over the past decade. Directed by Eldar Ryazanov, one of Russia’s best known directors, this film is a whopping 192 minutes long. It is mildly critical of the Soviet way of doing things, specifically their “economy” architecture, but managed to slide through the censors to become one of Russians’ favourite films.

The story begins with the leading male Zhenya agreeing to spend that evening, New Year’s Eve, with his new fiancee in the apartment in Moscow which he shares with his mother. However, he and his friends have a tradition of going to a public bath house on New Year’s Eve and – surprisingly for a group of Russian men – drinking. Unfortunately they overdo it, so when they set off from the bath house to the airport to see off one of the group, Pavel, who is catching a flight to Leningrad they are all extremely drunk. The drinking continues at the airport, and Zhenya and Pavel fall asleep. The other two are sober enough to realise that one of their group must board the aircraft, but cannot remember which one. So by a comical process of elimination they decide Zhenya is going to Leningrad and bundle him on the plane.

When the plane lands, Zhenya is still not sober and does not realise where he is. So, thinking he is still in Moscow, he jumps in a taxi and asks to be taken to his home address, something like Building 25, 3rd Constructors’ St., or similar. “No problem,” says the taxi driver and off they go. Earlier in the film the point was made that every Russian city has some of the same buildings, street names, and street layouts such that a man arriving in a strange Russian city feels right at home. When the taxi reaches its destination, Zhenya gets out to see a familiar building, and takes the lift up to “his” apartment. The building is identical to his own in Moscow. When he reaches the front door, he finds his key fits (“uniform locks in uniform doors”), he stumbles in, gets partially undressed, and collapses on the bed. Even the furniture is the same as in his own apartment, right down to the bedspread.

Shortly after he has fallen asleep, the leading lady of the film Nadya comes home and is rather surprised to find a druken man in her bed. The scene which follows is rather amusing, with both the man and woman ordering each other out of the apartment. Zhenya is still drunk, and staggering around in his spotty underpants. The actor Andrei Myagkov is so convincing as a man on the journey between inebriation and serious hangover that he had me reaching for the box of paracetamol. Once the argument has been raging for several minutes, the doorbell goes and Nadya’s boyfriend Ippolit is at the door, ready to spend a romantic evening with his soon-to-be fiancee. Understandably, he is less than impressed to discover a semi-naked Zhenya, who has crawled back to her Nadya’s bed to sleep off his hangover.

From here the film becomes a superb interaction and dialogue between Zhenya, Nadya, and as Zhenya realises he is in the wrong city but has no money to return home, where his fiancee is waiting for him. Appearances by other characters such as Nadya’s interfering middle-aged friends add to the colour as the situation in the apartment changes by the minute. As the film progresses it becomes less of a comedy and more of a romance, a transition which the director manages to carry out without the viewer losing interest. Despite being over 3 hours long, this film never gets boring.

I watched this film with English subtitles, only able to understand 10-20% of what was being said in Russian. It was well translated and the dialogue came through very well, although I’m sure something would have been lost along the way. It is the dialogue and the superb acting from the leads which makes this film what it is, and it provides a useful glimpse into Russian culture in ways both subtle and overt.

The Caring Face of Abu Dhabi’s Oil Companies

The oil and gas operating companies which make up the Abu Dhabi National Oil Company really do need to work on their customer service.

Calling the front desk of these major oil and gas companies would often be the stuff of comedy, were they not major oil and gas companies. It is not uncommon for the phone to go unanswered when you call the main switchboard, the call ending with a helpful message telling you there is no answer. Or you get the engaged tone, as if you’ve called your friend and his teenage sister is hogging the line. Either way, this is pretty poor for any company, never mind the headquarters of a national oil and gas company on which a good portion of the nation’s prosperity relies. Try calling the main switchboard of Shell in The Hague during business hours and see if you get an answer.

Sometimes you don’t even get this far. I called one of the national operating companies this morning, on the main switchboard number displayed on their website, to find myself connected to a fax machine.

Getting your call answered is only a minor hurdle, however. Things are not usually straightforward from thereon. For starters, the call – at the main switchboard in the headquarters of a national oil and gas company – is often answered with:


In fact, this seems to be the standard method of answering a call from almost every telephone in the organisation. When you have made your request to the main switchboard, there is no “Just connecting you now, sir” confirmation, just an abrubt change in sound on the line. And where they actually connect you to is a lottery in itself. Asking the main switchboard to put me through to the Commercial Department has landed me in the Mail Room on several occasions, where the helpful mailing clerk has suggested I try the main switchboard if I want the Commercial Department. It usually takes about 10-15 minutes of being bounced around between unanswered phones and unhelpful employees before you actually get to somebody who might know a person who can help you. Once you find such a person, you cling to their direct number for dear life.

Visiting in person isn’t much better. The receptionists vary between operating companies, and some are indeed pretty good. Others, however, are on their mobile to a mate when you approach the reception desk, and if they don’t ignore you entirely they attempt to find out what you want whilst continuing their conversation. They are also not too good at listening. When you visit a company, you get a slip of paper with the person’s name and location on which forms part of your visitor’s pass. Half the time I end up with a stranger’s name on the slip of paper, whose name may or may not have vaguely resembled the chap I was going to meet. Which then leaves me with the problem that I do not know his location, and have to ask around. This leads to more hilarity as people who sit next door to the chap I’m trying to visit deny all knowledge of his existence, or read the incorrect name on my visitor pass and tell me I’m on the wrong floor.

In short, it is an utter shambles. It really needs to be sorted out.

The Best of British Blogging

This is the British at their best. Tim Worstall noticed that fellow blogger Chris at Devil’s Kitchen was feeling a bit down of late, and issued the following appeal:

[I]s there anyone in the area who can amble round and cheer him up a little? Take him out for lunch?

Even though Tim’s in Portugal and can’t do a lot (other than kindly offer him a place in the sun for a week or two, which he has done) he’s still taken the time to show a little support for somebody that he’s never met. None of this patronising “I feel your pain” stuff, either. None of this intrusive “Tell me all your problems” crap. Just, “A man could do with cheering up, somebody get round there and buy him a pint, eh what!”

Superb. And coming from a capitalist pig, too. Well done Tim, you’re a good bloke.