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Russian President Putin made few changes in the new cabinet retaining most of the previous ministers, and retaining as advisors ministers who had proven unpopular. Igor Sechin, a former deputy prime minister was made head of Rosneft. Former finance minister, Alexei Kudrin, says the adminsitration will be more centralized this time with Mr Putin keeping key decisions to himself.

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Expected legal settlements of $13.7 billion for the Gulf Oil Spill are $10 billion more than what was set aside. Oil prices are below $50 a barrel in Jan. 2015 and BP is making job cuts. BP's stake in Russian state owned oil company Rosneft is in a country facing western sanctions and a deep recession.

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Non Gazprom companies such as Novatek and Rosneft now produce 27% of Russia's natural gas production, up from 10% in 2000, according to IHS CERA. The Russian government is opening up this sector to competition to improve efficiency.

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What happened at BP-TNK appears to be a misjudgement on the part of Hayward, Dudley, Dupree and other BP managers about who counted and to what extent in the Russian government and state run oil companies. Its still clear that Putin and his appointed head of the energy sector Igor Sechin are in charge here. As head of Rosneft the state run oil company and in his role as head of the energy sector Sechin had more influence on the eventual outcome than the lowere ranking Gazprom officials after Medvedev left Gazprom to be President. And Putin may simply have respected Sechin's judgement on the need to keep Rosneft as a significant player in the oil business as Gazprom itself may be becoming too large, to maintain some competitive forces in the state run oil industry as opposed to concentrating everything into one large bureaucratic enterprise. And Sechin, Putin and Medvedev could let AAR do the work of ridding BP of its notions of a large role in controlling Russian oil resources in a combination with Gazprom. At some other point the oligarchs of AAR could be bought out by the state run companies, especially when oil prices were expected to come down, for a much lower cost....

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ChemChina's acquisition of Pirelli's tire business focusses on the more valuable tire consumer unit, Pirelli's technology for premium tires, and increasing growth in Asian markets. The acquisition involves a complex transaction which includes Rosneft of Russia, which owns a major share in Chemfin that has 28% of Pirelli stock. Institutional holders control 47% of the stock, with other holdings by Mediobanca, the Benetton family and retail investors. For Pirelli this is the first step in a journey with a major Chinese investor and a focus on the Chinese consumer market.

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This article clearly shows that Russia is turning the corner for full scale use of western technology to tap oil and gas fields in the North. Note the efforts to bring in western expertise include- 1. Efforts to hire Donald Evans, former U.S. Commerce Secretary, to be Chairman of Rosneft. Evans turned down the offer. The hiring of Peter O'Brien a former Morgan Stanley investment banker as chief financial advser.2. With China National Petroleum as a strategic partner. 2. The financial backing and expertise of state run oil companies around the world now give them the ability to contract directly with Schlumberger or Baker Hughes or other oil field technology suppliers. This changes the whole playing field with less need to negotiate with the major oil companies and the ability to do it themselves at their own pace and strategic advantage and execute their own oil policy. Previously negotiating with the oil companies meant giving up some of the ownership of the oil fields to the oil companies in return for the technology. The oil services companies sell the technologies on a fee basis. 3. The pressure to move ahead aggressively with new technology. Estimates from IEA in Paris by Chief Economist Fatih Birol, show that increasing oil production by one and half million barrels a day to level of ten and half million barrels a a day requires Russia to invest $900 billion dollars by 2030 or about 40 billion a year. The only way to generate this kind of investment is to grow its oil development capabilities, keep prices high but stable, invest in the latest technology and bring some of it inhouse....

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On the Rosneft IPO. Strong demand for the IPO shares will help raise at least $10 billion for Rosneft. Successful implementation of new Russian energy policy to build a number of large state run energy companies and modernize it energy sector as a basis for Russian economic growth.

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Russia's central bank revises the initial figure of $500 million for rescue of Trust Bank to $2 billion, and an additional six year loan of about $550 million to go to an "investor" bank to take control of Trust Bank. State controlled VTB Bank will receive $2 billion and Gazprombank $1.4 billion in government help, according to Mr. Siluanov, Russia's Finance Minister. So far the Russian government has approved $20 billion for rescue in the banking system. Foreign currency reserves have declined by $16 billion to $398.9 billion, according to figures released by the central bank on Dec. 26, 2014. The Russian government plans to use the foreign currency holdings of Rosneft, Gazprom and other large state controlled exporting companies in 2015 to support the ruble. Mr. Siluanov says the government will need to look at its budget again to reduce spending, including military spending. His predecessor Alexei Kudrin called for reducing military spending to ensure stable finances long before this crisis....

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Exxon's position with cash on hand of $37 billion gives it agood position from which to invest in partnerships with Petroleo Brasileiro for exploration on the Atlantic coast of Brazil, or to acquire another oil company. It may also consider investments in possible oil finds in places like Greenland, New Zealand, Madagascar or the Black Sea.

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Venezuela faces an uncertain future after U.S. efforts to support Mr. Guaido and call for new free and fair elections have failed. With help from Russia the Venezuelan economy is showing signs of recovery from the steep decline and high inflation in 2019. Oil production is expected to reach 1 million barrels a day in 2020 after falling to 650,000- 700,000 barrels a day in 2019. Russia's oil company Rosneft provides critical help for Venezuelan oil sales and maintenance in oil fields.  National Security Adviser John Bolton is faulted for his advice to president Trump on Venezuela, that merely voicing support for 36 year old Guaido, would lead to regime change without action from the U.S. With the recovery in Venezuela with help from Russia and Cuba, Mr. Guaido's popularity has dropped by 20 points to 38%, according to a Venezuelan pollster Datanalisis. Most Cubans and Venezuelans in the U.S. are in Florida where there is support for new elections, and Mr. Trump continues to support Mr. Guaido. The lack of support for change from other countries including Europe, India, Turkey, and Mexico have led to a stalled situation in Venezuela. There is concern for the steep inflation, the migration of about 4.5 million Venezuelans, the shortages of critical supplies as a result of the economic collapse in 2019. The situation is stabilizing for the government yet the future of Venezuela with U.S. sanctions and weak economy leaves Venezuela in a precarious situation. Venezuela continues to be an example of how well meaning changes for social justice can lead to political changes that bring about economic collapse. This happens  when business and the economy flounder under mismanagement and corruption under crony socialism, a variant of crony capitalism. The old capitalist class and the privileged families who ran the country under its old two party system are gone. Replaced with a new class. The trying out of untested economic ideas in the quest for social balance leads to economic mismanagement, loss of critical human resources which leave the country, and a higher degree of poverty with shortages than before.  Today in Latin America Brazil shows how allowing generous pension benefits at the expense of basic needs and public services in the budget can hurt the economy. Argentina's overborrowing once again shows how this leads to IMF loans and harsh economic austerity. Chile shows how not financing pensions and public services can lead to collapse of public confidence and riots. Venezuela shows how the quest for social justice and reducing privilege can itself get flawed, leading to mass migration of as many as 4.5 million citizens. This happens under models that vary from free enterprise models to socialist or nationalist models showing that models can be less relevant than good sense and good management. In the beginning and for some time each of these models worked well, commodity price supported booms concealed real problems. Avoiding extremes, prudent spending, good investment and hard work, investment in education and infrastructure, building consensus, and good management, is critical for the future to avoid the bad outcomes facing much of Latin America. A lesson also for Asian and African countries that basic virtue is more important than socialism or free enterprise or nationalism when it comes to development.   ...

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Steve Lee Myers reporting from Moscow and St. Petersburg, Jo Becker from Washington and London, and Jim Yardley from Nicosia, Cyprus, provide this extraordinary and exceptional report on the rise of a small group of friends, mostly from Mr. Putin's time in St. Petersburg, into a new sort of oligarchy replacing the old one under Mr. Yeltsin. This includes more familiar names such as Sechin at Rosneft, but also less familiar names such as Mr. Kovalchuk, chairman of Bank Rossiya, which owns major television and radio stations and newspapers in Russia. M. Kovalchuk is described as having acquired many of these media properties at a fraction of their real value. Bank Rossiya assumed management of assets of Gazprombank, and Gazprom bank purchased Gazprom Media with five television and a number of radio stations for $166 million, when Medvedev, a Putin associate put the value at $7.5 billion 2 years following the acquisition, according to this report. Other assets acquired in this manner include Channel 5 and Ren TV, giving Putin's inner circle control of the media and reducing any critical or different views on issues facing Russia. Many of Gazprom's assets were transferred to Bank Rossiya, say critics, including insurer Sogaz which was acquired for $100 million, later valued at $2 billion, says the report. Names on the this inner circle also include Yakunin, head of Russian Railways, also include names like Fursenko and Timchenko. Most of the people in this inner circle are now targets of western sanctions. Missing in this report is mention that that this inner circle of the second term as president replaces the larger circle of the first terms as president and prime minister, with Putin benefitting from experts and advisors in the first terms. That circle included Finance minister Kudrin known for his successful management of the economy, and others who left the administration after flawed parliamentary elections. Even prime minister Medvedev is not mentioned as part of this inner circle, suggesting a degree of isolation which could be perilous for the Russian economy as it deprives the Russian president of different opinion and useful advice. This is a pattern seen in many emerging market countries which experience corruption during the period of industrial development. A pattern seen also in China under the Communist Party. And in Venezuela where a new Bolivarist class was created. In emerging market democracies such as India and Turkey the problem is also present, except that in India the recent open election led to the ouster of the Congress led government with many cases of corruption in its second term. A similiar election led to a new government in Indonesia, showing that there is another way beyond the Putin Way. Behind the protests in Hong Kong and in Russia, as well as in India, were the huge gaps in wealth and the growing inequality, corruption, lack of responsiveness of ruling governments. In Russia this takes another dimension with efforts to control the internet and media, and efforts to spread this style of democracy. This has created problems in the Putin government's relations with western nations having open societies and free media, and unwilling to accept a distorted model of democracy. Another less noticed aspect of the evolution of these emerging markets is that upto a point development proceeds even accelerates even in the presence of corruption, and then reaches a point where development and growth slows with problems of corruption, mismanagement of resources, declining productivity, economic and political errors, or unfavorable external environment. India faced this problem in 2012-2013, Russia is likely to face this in 2015, and China faces the prospect of growth slowdown by 2016. This feature of emerging markets also reminds one of the frequently quoted old English saying by Lord Acton- "Power tends to corrupt, and absolute power corrupts absolutely." An idea also attributed to William Pitt the Elder who said- "unlimited power tends to corrupt the minds of those who possess it." ...

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BP's plans to sell its 50% stake in the Russian joint venture TNK-BP. The stake would be worth about $30 billion, according to analysts. BP says it has discussed this with potential buyers. BP's shares were up by 3% in London because this is seen as a good move for BP. The amount could be better invested in other opportunities considering the difficulties BP has experienced working with its partners in Russia .

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How Sonatrach of Algeria is working in joint relationships with Statoil-Hydro of Norway, both national oil companies, who are creating a new pattern in bringing capital and technology resources of national oil companies together to tackle projects throughout the world. Statoil for example, has been invited to work with Gazprom on Shtokman gas field project in the Barents Sea. This alliance has taken may forms including Statol taking a 10% ownership in the Algerian Petroleum Institute and setting up a training program which has already trained 6000 Algerian Sonatrach employees in western health and safety standards. This Institute trains Algerian engineers. As Statoil and Sonatrach look outside for new exploration as their reserves are declining, they are working together in different parts of the world. Sonatrach and Statoil-Hydro launched a successful joint bid for 2 offshore gas deposits in Egypt. And Statoil has given Sonatrach equity in one of its North Sea gas fields and given it capacity at a liquefied natural-gas import terminal in Cove Point, Maryland. Algeria has set goals of having international reserves account for 30% of its production by 2015 by taking exploration tracts in places like Libya. Note that this type of collaboration is increasing. PFC Energy a consulting firm says that were 2 such deals for technical cooperaton and sharing access to resources and markets in 2000, in 2006 there were 16. So expect more of this type of collaboration and joint work....