Russia is going to need foreign capital and expertise to help it develop its Arctic oil and gas. It'll be expensive and technically demanding to get those resources.
The government's treatment of BP in the current fight over control of BP-TNK is going to give foreign investors second thoughts about helping: Russia reaches investors' tipping point after BP affair sours.
Andrew Osborn and Guy Chazan report that (BP Venture in Russia Hit as CFO steps down):
Throughout the conflict, all eyes have been on Russia's new president, Dmitry Medvedev. How the fight plays out is seen as a test of his attitude toward foreign investment and his commitment to the rule of law.
Outwardly, the Kremlin has stayed neutral, saying it was up to the partners to patch up their differences. Some people close to TNK-BP say the kind of regulatory and bureaucratic interference the company has faced would be unthinkable without some backing from senior Russian officials....
Shortly after the TNK-BP battle erupted this year, the company and its employees were subject to a wave of investigations by Russian tax authorities, labor regulators and prosecutors. Those probes focused particularly on foreign nationals working at the company. BP has accused AAR of orchestrating the pressure on TNK-BP's foreign staff, a charge the Russian partners deny.
Revised August 5.
Its invasion of Georgia won't help Russia to attract foreign capital either.
Ekonomix
http://turkeconomy.blogspot.com
Posted by: Ekonomix | August 14, 2008 at 10:44 AM