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What Will Happen To Russia 2 Years Later?
Naira Hayrumyan, Political Commentator
Comments - 25 October 2014, 17:25
A wild process of redistribution of property is underway in Russia.
Semi-state oligarchic giants are trying to steal the state reserves
entirely to survive and stay in government. Meanwhile, survival is
getting more and more difficult due to the decline of oil prices and
international demand. It is even harder for a country which has failed
to invest oil dollars in technology, and the government has built
vertical power, distributing national wealth among groups of
oligarchs.
Despite the fall of oil price, Russia is facing high prices and
shortage of petrol. This was especially evident in the east of the
country where people wonder how come the country that sells oil does
not have oil processing industries. Why has the government instructed
Gazprom to import petrol? Why would Belarus which produces 5% of
Russian petrol influence the Russian market?
Experts say the Western technologies allow producing 4 times more
petrol from the same quantity of oil. Therefore, it is cheaper there.
Besides, shallow oil production technology in the United States has
been improved to the extent that now its production is profitable even
if one barrel costs 57 dollars.
The leading oil producer of Russia Rosneft does not invest in
modernization. As a result, one of the world's more capitalized
companies owes 30 billion dollars. Now it needs state's help to
survive.
The head of Rosneft has requested 50 billion dollars, half of National
Welfare Fund, "to develop several projects". This is not enough
though, and Russia is likely to sell 20% of Rosneft's shares.
Although, the state will support Rosneft because otherwise it will
have to toll the death of the present government.
At the same time, a process of nationalization of property has started
in Russia. Obviously, there is not enough money, and the draft law on
nationalization of part of privatized property. The new regulations
will be applied to the weak links, primarily Bashneft and Mechel.
Experts claim that Russia has enough resources to stand for 1.5-2
years. What next? Russian giants have neither opportunities nor
intentions to invest in technology and raise their sales. Using
military-political methods to "block" the way of their competitors is
deemed an easier way. However, this is an old mechanism and breaks
down often.
It should be noted that Rosneft now holds monopoly of oil supply to
Armenia. It means that prices in Armenia will not fall despite the
falling prices of oil and petrol in the world market.
http://www.lragir.am/index/eng/0/comments/view/33140#sthash.3h5hx0uN.dpuf
From: Baghdasarian
Naira Hayrumyan, Political Commentator
Comments - 25 October 2014, 17:25
A wild process of redistribution of property is underway in Russia.
Semi-state oligarchic giants are trying to steal the state reserves
entirely to survive and stay in government. Meanwhile, survival is
getting more and more difficult due to the decline of oil prices and
international demand. It is even harder for a country which has failed
to invest oil dollars in technology, and the government has built
vertical power, distributing national wealth among groups of
oligarchs.
Despite the fall of oil price, Russia is facing high prices and
shortage of petrol. This was especially evident in the east of the
country where people wonder how come the country that sells oil does
not have oil processing industries. Why has the government instructed
Gazprom to import petrol? Why would Belarus which produces 5% of
Russian petrol influence the Russian market?
Experts say the Western technologies allow producing 4 times more
petrol from the same quantity of oil. Therefore, it is cheaper there.
Besides, shallow oil production technology in the United States has
been improved to the extent that now its production is profitable even
if one barrel costs 57 dollars.
The leading oil producer of Russia Rosneft does not invest in
modernization. As a result, one of the world's more capitalized
companies owes 30 billion dollars. Now it needs state's help to
survive.
The head of Rosneft has requested 50 billion dollars, half of National
Welfare Fund, "to develop several projects". This is not enough
though, and Russia is likely to sell 20% of Rosneft's shares.
Although, the state will support Rosneft because otherwise it will
have to toll the death of the present government.
At the same time, a process of nationalization of property has started
in Russia. Obviously, there is not enough money, and the draft law on
nationalization of part of privatized property. The new regulations
will be applied to the weak links, primarily Bashneft and Mechel.
Experts claim that Russia has enough resources to stand for 1.5-2
years. What next? Russian giants have neither opportunities nor
intentions to invest in technology and raise their sales. Using
military-political methods to "block" the way of their competitors is
deemed an easier way. However, this is an old mechanism and breaks
down often.
It should be noted that Rosneft now holds monopoly of oil supply to
Armenia. It means that prices in Armenia will not fall despite the
falling prices of oil and petrol in the world market.
http://www.lragir.am/index/eng/0/comments/view/33140#sthash.3h5hx0uN.dpuf
From: Baghdasarian