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Russia forces BP top executive to flee

One reason I fervently hope that the oil price eventually crashes if new energy sources are developed, is so it will pull a rug under thuggish regimes in places such as Venezuela and Russia:

The future of BP’s investment in Russia hung in the balance last night after Robert Dudley, the chief executive of TNK-BP, decided to leave the country.

In a humiliating defeat for Britain’s largest company, BP’s chief executive, Tony Hayward, said that Mr Dudley had left Russia temporarily, after an intense campaign of harassment by TNK-BP’s Russian co-owners, Alfa, Access and Renova (AAR), that had been “deeply unpleasant” for Mr Dudley and left him unable to carry out his job. Mr Dudley’s departure from Moscow was not disclosed until he was in the air en route to an undisclosed location.

I would like to think that if the BP executive were physically threatened or harmed in any way, that the full fury of the UK state would descend upon that gangster regime, but of course that is most unlikely and probably unwise anyway, so it is a folorn hope. As long as oil is so strong and countries in Europe are such heavy importers of Russia’s natural gas, this sort of bullying will continue. But it surely is also a reminder that investment in that country is fraught with danger. The hedge fund manager, Bill Browder, was kicked out of the country a few years ago for his role as the asker of awkward questions when it came to investing in Russian firms. If ever Russia hits economic difficulties in future, as happened in the debt crisis of 1998, I hope that when Russia goes asking for aid, that other nations have the good sense to tell that country to perform sexual acts on itself, so to speak.

Stories such as this make me convinced that among the “Brics”, Russia is not a good long-term bet, at least not until the political complexion of that vast nation changes for the better. That is going to be a long wait.

26 comments to Russia forces BP top executive to flee

  • Sorry Johnathan,

    The days when a British Government acted to support and protect a British Subject(Link) are gone. Palm(Link) has been dead many a long decade.

  • Personally, I don’t give a tinker’s cuss for BP. Back in 1953, British Intelligence and the CIA conspired to overthrow the democratic, secular government of Iran because it had nationalised Anglo Iranian Oil (BP’s precursor) and we’re still dealing with the fallout. I have as much sympathy for BP as I have for Microsoft, currently bleating about antitrust laws regarding the deal between Google and Yahoo.

  • Why single out Russia and Ven? This applies to half the middle east. TT – BP may or may not be crooks – but they are OUR crooks, so that makes it all right.

  • Johnathan Pearce

    Why single out Russia and Ven? This applies to half the middle east.

    I am not aware that UK oil firms in the GCC states of the Gulf have been subjected to what amounts to menaces like this, at least not in recent decades, Mark. No, Russia and Venezuela are worth “singling out” because they are the most clear-cut examples of such behaviour.

    If there are other similar examples, then of course I will condemn also.

  • K

    In the 1990s foreign capital and knowledge helped Russia to stabilize and then grow rapidly.

    But when they can Russia will ease out or boot out foreign partners and keep the rewards to themselves.

    Foreign partners making consumer goods will last the longest because they can just close their factory and produce elsewhere with little loss. Oil and gas companies can’t.

    The dirty details of each case will be handled by the law and/or goons. It depends on whether the government is acting or native gangsters are acting.

    Apparently in some situations the government and the gangsters are allies and in others rivals.

  • I’ve thought for some time that any company “investing” in Russia or China should write the “investment” down to zero on their books forthwith. Enjoy the income while it can.

  • permanentexpat

    “……the full fury of the UK state would descend upon that gangster regime,”

    The what, Johnathan??????

    That really made my day…send them an ASBO; that will surely frighten the faeces out of them.

  • The Ignorant American

    Trooper Thompson tells the truth, so far as he goes, but he leaves out important information.

    Trooper’s description is a little like a partial striptease: What it reveals is interesting but what it conceals is crucial.

    The Iranian government might have been elected but it was ignoring its own constitution. For example, Prime Minister Mosaddeq tried dissolve parliament, in spite of the fact that the Constitution gave the Shah sole authority for this action. Mossadeq used dictatorial control to maintain power. Voted in? Yes. Democratic (as in lawfull)? No.

    The government might have been secular in some sense but an Ayatollah was house speaker.

    The coup took place after the fall of the Iron Curtain on Eastern Europe, after the Berlin airlift, in the midst of the Cold War, during the Korean war, after it was becoming very evident that the Soviets were attempting to subvert governments all over the world.

    The Iranian Prime Minister Mossadeq was strongly supported by the Iranian Communist (Tudeh) party. The British led the Americans to believe that Mossadeq was turning toward communism. This was a very important factor in the decision to support a coup against the prime minister.

    While US involvement in the coup was motivated by national security considerations, I can’t blame the British governent for attempting to recover their citizens’ property (BP’s assets). I would hope that any government would oppose an effort by anyone to steal their citizens’ property. Just because a government takes your capital, doesn’t make it right.

    Foreign governments attempt to influence each others’ politics all the time. This was nothing new.

    Trooper, I admire the fact that you know about the coup, but you ought to try reading some balanced history some time.

  • cjm

    the uk, and bp, get what they deserve. why run chummy, it’s not like you are safe in london. england is a broken down mutt waiting to be taken out and shot. shame, but when you choose socialism you choose servitude. i guess a culture that bends it knees for one king is by nature going to prostrate itself for anyone.

  • National Geographic’s August issue has an interesting story on the over-the-top wealth and lawlessness in Moscow, which has more billionaires than any city in the world:

  • Johnathan Pearce

    the uk, and bp, get what they deserve. why run chummy, it’s not like you are safe in london. england is a broken down mutt waiting to be taken out and shot. shame, but when you choose socialism you choose servitude. i guess a culture that bends it knees for one king is by nature going to prostrate itself for anyone.

    I guess you are one of those ex-pat Brits who sit in Australian or Spanish bars getting pissed and boring all the locals on how terrible Britain is. zzzzzzzz

  • dan

    And don’t leave out the fact that Mossadeq was the scion of the Quraji dynasty that had ruled Iran from the late 18th century until the 1925 military coup by Reza Shah – the father of the son whom Mossadeq attempted to depose. Mossadeq’s contempt for the Parliament and its Western form were well-known – with such recent examples of Iraq and Afghanistan on our televisions for 7 years, only a fool would believe Mossadeq’s ambition did not extend to putting himself on the Persian Throne once again. Thirdworld lovers abroad forget how tenuous these new constitutional monarchies were in these ancient states, and that if there had been no British presence there would never have been a constitutional monarchy – something utterly alien to Asia – at all. The love for Mossadeq is entirely misplaced; he was no democract, and by the way he was elected by his party, not a popular vote – that is not how the British (Persian) system works. The Anglo-American coup – which by the way was supported by the legitimate goverment of the Shah and his troops – was entirely reasonable politics. The ignorance with respect to the USSR in this and other countries is appalling and accounts in large measure for the continuing ignorance of disinformed fools who try to use Mossadeq as a moralistic stick with which to beat the US. Read, you fools, read!

  • dan

    And by the way, it’s worth pointing out that the SVR/FSB (new names for the KGB’s foreign and internal operations) utterly control all “private” enterprise in the former USSR, especially Russia. All the oligarchs – that is, Communists who exploited the transition to private property – were forced out (last being Khordorovsky) and replaced with other Communists directly under the control of the Russian intelligence agencies. This ought to be obvious: people must concentrate on the continuities of history, institutions and cultural behavior, and resist being distracted by the beautiful pictures of philosophers and foreign policy pundits. Question: in a police state, what happens to the police when there is no genuine revolution? The “police” just change the sign on their door, take down the posters of Marx and Lenin, and then call Goldman Sachs to put those nice state enterprises on the NYSE. Why? Way more money! Way more credibility! One need not descend into paranoid conspiracy mongering to see that a 50+ year old Soviet apparatchik, to say nothing of a GRU agent, does not suddenly become a devotee of Jefferson and Madison because trade unions have supposedly gotten an upper hand in Upper Silesia.

  • Paul Marks

    The belief that the Islamic Revolution of 1979 was “fall out” from helping to overthrow the proSoviet government of 1953 (a government about as interested in “democracy” as I am in Association Football) shows the mark of the Ron Paulites (really the Rothbardians) – everything is the fault of the United States, and spread the line of the left without even know you are doing it.

    Actually a case CAN be made that the 1979 Revolution was partly due to bad American policy – but not in 1953.

    The economic advice given to the Shah (the “White Revolution”) fatally undermined land owners and merchants – who might have supported the Shah against radical clerics. And helped create a mob who could be manipulated and organized by radical elemments.

    Then having given the Shah endless bad advice – the West betrayed him when he needed help the most (the Carter line that the radical clerics were saintly people because they were interested in social justice).

  • Paul Marks

    Yes there is more security for private property in the United States (for all its faults) than there is in Russia – for the present.

    And, no, I am not being “paranoid”.

    The “community activists” are at least as Marxist as the rather pragmatic Putin is – possibly rather more so.

    The activists already have a lot of power (as, for example, the subsidies for vote-fraud-r-us “ACORN” in the Housing Bill show) – but one of their own is not yet President, and he may be soon (to fit in with the defacto control of Congress, the future control of the courts, and the fearful subsides from most of the leading corporations).

    Even the recent “anti communist” Berlin speech was not really so – for example the Reagan style “tear down this wall” is replaced by tear down the walls between rich and poor.


    Well I am caught here – as only the victory of the left can prove me not paranoid.

    If they are defeated (at least for now) then the mockers can not be refuted.

    So be it.

    I would rather the enemy be defeated – and the mockers left saying the enemy do not exist.

  • Brian Macker

    It’s inevitable truth of economic law that when you lower interest rates below market prices that a series of economic events will occur. Given what Greenspan has done we will see a non-monetary commodity price bubble.

    This act, lowering interest rates below market, disturbs the future vs. present price signals and leads producers to think that long term projects will be more profitable than they actually are. Interest rate changes effect long term projects more than short term ones. Commodities being far away from consumption are always effected first and most by interest rate changes.

    The producers, imagining more profits, then bid up the value of commodities based on the lower interest rates. Given the extra money prices need to go up but the bidding goes well beyond what the final level should be.

    In every other case of monetary inflation there has been a bidding up of commodity prices followed by a fall. This is because there just are not enough commodities produced to fulfill the needs of all the producers plans, because the price level is sending the wrong signal. The signal being that there is more savings than actually exists.

    The fall does not necessarily bring prices back to the old level, especially with a fiat currency. However they do fall.

    So yes, your dreams will be fulfilled. Commodity prices will go way too high. Remember, this could only be a temporary correction. Producers will have invested too much in long term projects like oil wells, mines, refineries, buildings, housing, and so forth before this is over.

    Then people are going to be wanting short term goods, consumer goods, like food and clothes. However commodity prices increases will have flowed forward in time into consumer prices. Those short term prices will then go up sucking money away from the long term prices. Mine workers will demand pay increases to eat, etc. The unprofitability of those long term projects will become apparent and the fire sale will begin.

    We will be sitting on a relative energy glut at some time in the future, just like we experienced after the last inflationary episode of the 60’s-70’s.

  • paul a'barge

    What’s a “bric”?

    By the way, the tab order of your input fields such as “Name:”, “Email Address:”, “URL”, etc are screwed up. Tabbing from Name: jumps the input cursor to who knows where and the page scrolls the input fields out of view.

  • betheweb

    Here’s an excellent plan to break the back of Russia, Venezuela, the Saudis, Iranians, and any other freaks using oil as a strategic weapon: http://www.energyvictory.net/
    The solution is to have fuel choice; all vehicles capable of using a wide mix of fuels from gas to M85.

  • What’s a “bric”?

    BRIC – Brazil, Russia, India, China

    Supposedly the large population, high growth and wealthy powerhouses of the 21st Century. Those countries fated to challenge the USA in economic, scientific and cultural dominance.

    Anyone who seriously believes Brazil and Russia belong in such a list is living in fantasy land.

  • cjm

    no, i’m not an expat (brit) just an american who loves england and remembers when it was still a nation — instead of a dead whore in a back alley.

    i guess the brtish people have a collective memory of about 15 years or so because the current conditions *always* arise when labour are in power. rinse and repeat indeed.

  • Michiganny

    Here is an alternate reading of the tea leaves: USSR falls. Cold war ends. Yeltsin proclaims democracy. Oil is under $30 a barrel. The West displays devil may care attitude to the Russians. Russia warps into a vision of kleptocratic social darwinism as we discuss Monica Lewinsky’s blue dress.

    Now, oil is over $130 a barrel. Russia displays devil may care attitude to Westerners caught up in the Russian game of kleptocratic social darwinism we let fester through their society in the first place.

    What did you expect from them?

    I suppose you expect people you did not help in their darkest hour to help you instead of themselves in a zero sum game. Good luck with that.

  • dan

    “…we let fester…”

    “…people you did not help in their darkest hour…”

    Bwahaha – we did this to them, turned the Russians into a bunch of cynical narcissistic racketeers with institutional delusions of grandeur? I suppose you believe that Western Imperialism is the cause of sub-Saharan African subsistence “economies,” or perhaps Arab tribalism? You really are a useful idiot, Mich.

  • K

    Dan: I agree with much you said about continuity. The secret police and an obedient legal system change form but not function.

    And perhaps just as unusual, their military has never successfully seized power, has almost no record of trying, and seems uninterested in politics.*

    I had hopes that Putin would become what he could not. My mistake was in believing his intelligence would overcome his heritage.

    *I hope no one starts citing history books about their military. Yes, generals and admirals and sailors have acted at times through the centuries but their successes were few, limited in scope, and temporary. And I said ‘seems’ uninterested.

  • CJ

    BP knew perfectly well what they were getting into. They took over assets that had been discovered or developed by other companies that had then been forcibly appropriated by Russian “oilgarchs” who offered them to BP. Have a listen to the president of Norex Petroleum in Part Three of this radio program:

    The Current – BNP, TNK, and NOREX

  • I return to find myself having been berated for bringing up the anti-Mossadeq coup.

    I do not claim great knowledge of Mossadeq, but one thing’s for sure: Iran is somebody else’s country, and overthrowing its government and helping install a brutal dictator is unjustifiable on libertarian principles. However for those of you who yearn for the good old days of British ‘free trade’ – i.e. turning up with a boat full of opium and a boat full of marines, and saying ‘buy the opium or we burn your city down’ – I suppose it’s all fair play.

    The Ignorant American says:

    “The Iranian government might have been elected but it was ignoring its own constitution”

    You might not have noticed, but your own government has a bit of previous in this respect (e.g. warantless wiretaps, gun confiscation post-Katrina, I could go on)

    Paul Marks tries to dismiss the issue with a wave of the ‘anti-American’ card. Whatever.


    whatever the state of the Iranian government, British Intelligence fermented the coup for purely commercial reasons.

  • Michiganny


    If I am a useful idiot, you are a lazy pedant. Khodorkovsky is the correct spelling.

    And going through name changes of Russian power ministries is wasted type. Mr. Putin disagreed memorably: “There is no such thing as a former Chekist.”

    This ought to be obvious: people must concentrate on the continuities of history, institutions and cultural behavior[.]

    Agreed. We certainly let Russia founder for over a decade. We did very little to have any positive contribution on Russia’s history, institutions, or cultural behavior. On some level, that is fine.

    Just save the “bwahahas” for Western corporations when they decry Russia for not being Western enough for them. Neither East nor West is very chivalrous when money is on the table.