TBR News September 25, 2017

Sep 25 2017

The Voice of the White House

Washington, D.C., September 25, 2017:”In a reality far removed from wishful thinking on the part of American oligarchs, the United States is the largest consumer of oil in the world. She produces far less than Russia. When the Soviet Union broke up and a pro-West and corrupt Boris Yeltsin became head of state, American business interests made frantic efforts to get their hands on Russian oil assets. They almost succeeded until Putin was elected to replace the departing Yeltsin. He blocked the looting project and now Russia is the largest producer of oil and gas, Saudi Arabia’s fields running out. In this case, as in so many others of recent note, the watchword is: too little and too late.”

Table of Contents

  • US wants to bury Russian gas pipeline project & force-feed its own LNG to Europe – PM Medvedev
  • Why record U.S. oil exports are poised for even more growth
  • The Attempted Rape of Russia’s oil and gas
  • S. Imports from Russia of Crude Oil and Petroleum Products
  • Gazprom unseats ExxonMobil as world’s largest energy company
  • What the Kurdish Referendum Means for the Future of Iraq
  • Thousands rally across Catalonia for independence from Spain


US wants to bury Russian gas pipeline project & force-feed its own LNG to Europe – PM Medvedev

September 21, 2017


Washington intends to stop the construction of the extension of the Nord Stream pipeline from Russia to Germany, and become Europe’s key gas supplier, Russian Prime Minister Dmitry Medvedev warned on Thursday.

“The most pragmatic position is the position of the United States of America, which wants to bury this project with all sorts of legal decisions, instruments, sanctions, having an unambiguous impact on the European Union,” Medvedev said at a meeting with Finnish counterpart Juha Sipila.

Such pragmatism can be explained by the interests of the US Congress to force-feed American gas to Europe, ousting Russia, Medvedev said.

He said that Finland has taken a “very constructive position regarding Nord Stream-2,” by The Nord Stream-2 pipeline will double the delivery capacity of the existing Nord Stream pipeline from the current 55 billion cubic meters of gas per year. The pipeline has faced fierce opposition from the Baltic States and Poland.

Last month, the United States introduced a new round of restrictions on the Russian banking and energy sectors.

Washington is interested in increasing its share in the European gas market by delivering liquified natural gas (LNG).

Over the last year, the US has increased LNG supplies to Europe. However, it now has only six percent of European LNG imports, which doesn’t take into account natural gas supplies through pipelines.

According to Gazprom Russia had a 34 percent share of the European gas market last year.


Why record U.S. oil exports are poised for even more growth

July 27, 2017

by Devika Krishna Kumar and  Marianna Parraga


NEW YORK/HOUSTON (Reuters) – U.S. refineries are producing more fuel than ever as they seek to meet rising demand – from overseas, rather than the drivers on nearby roadways.

Last year, the U.S. became the world’s top net exporter of fuel, an outgrowth of booming domestic production since the shale oil revolution started in 2010. That’s a fundamental shift from the traditional U.S. role in global markets as a top importer and consumer.

Net exports are on track to hit another record in 2017, making foreign fuel markets increasingly important for the future growth prospects and profit margins of U.S. refiners.

Shale oil producers have provided refiners with abundant and cheap domestic crude supplies, giving them the raw material they need to produce internationally competitive fuel.

The nation set a record in 2016 by sending a net 2.5 million barrels per day (bpd) of petroleum products to foreign markets. That compares to net fuel imports of 2.3 million just a decade ago, according to U.S. government data.

Booming exports have bolstered margins at the biggest U.S. refiners – including Marathon Petroleum and Valero – and compensated for lack of strong growth this year in U.S. fuel demand.

Now, the government of U.S. President Donald Trump is seeking to deregulate oil and gas production to further leverage rising U.S. exports for international political gain – a policy Trump calls “energy dominance”.

Surging U.S. crude production has already complicated the ongoing effort by the Organization of the Petroleum Exporting Countries (OPEC) to tame a global glut that has halved oil prices since 2014.

The United States remains a massive importer of crude oil – regularly trading the top spot with China – but American refineries now re-export much of that oil as jet fuel, diesel and gasoline.

The U.S. has a growing role in satisfying demand for motor fuel in countries such as Mexico and Brazil, where the thirst for U.S. fuel is likely to accelerate amid refinery outages and high production costs.

Refined U.S. exports are also going further afield to Asia, and diesel exports to Europe increased in June to levels not seen in nearly two years, traders have said.

Traditionally, oil traders, refiners and investors have considered U.S. fuel demand as one of the leading metrics for predicting international crude oil supply and price trends. Now, they are increasingly looking to foreign demand for U.S. fuel for guidance.

“Globally, you’re going to have increased demand for all of our products, and so our focus will go beyond the U.S. borders,” said Texas-based Valero’s Chief Executive, Joe Gorder.

In contrast, he predicted a “slight decline” in U.S. gasoline demand over the next decade.

U.S. gasoline demand hit a record in 2016, as low pump prices encouraged consumption, but has leveled off this year. Rising fuel efficiency in cars is expected to limit future domestic demand growth.


U.S. refined products are filling shortages in countries such as Mexico and Venezuela, where refineries have been running below capacity. U.S. exports have also made inroads into Brazil’s market by undercutting the price of locally produced fuel.

Latin America’s imports of U.S. fuels reached almost 2.5 million bpd in the first quarter compared with 2.32 million bpd in 2016. The growth was fueled by Mexico, Brazil, Peru, Venezuela and Central America, according to the U.S. Energy Information Administration (EIA).

Mexico – already the biggest export market for U.S. gasoline and diesel – is seeking higher-than-usual volumes in July and August to fill a void left by a fire at its biggest refinery last month.

In recession-scarred Venezuela, the country’s largest refining complex has lowered operating rates this month to less than half of its 955,000-barrel-per-day capacity, a level that has required state-run oil company PDVSA to import more fuel to meet domestic demand.

Between them, Mexico and Venezuela have recently said they want to buy extra volumes of almost 19 million barrels in the second half of the year – mostly from the United States – an amount suggesting that U.S. exports will grow again this year over last year’s record levels.

Net U.S. exports of transport fuels could rise 8.8 percent this year, according to PIRA Energy, an analytics and forecasting unit of S&P Global Platts.

In Brazil, fuel distributors have begun buying more U.S. imports because they are cheaper than fuel sold by state-run oil firm Petrobras.

Petrobras had failed to align its wholesale prices with international markets, opening a window for importers to bring fuel into Brazil.

Petrobras last month said it would peg its fuels more closely to international prices as it tried to slow the expansion of U.S. imports. Analysts said supply from U.S. refiners was unlikely to slow much.


U.S. refiners have also boosted exports to Europe and Asia.

In Europe, U.S. shipments of diesel rose to nearly 500,000 bpd in June, according to traders, well above flows that have rarely exceeded 370,000 bpd since July 2015.

U.S. global distillate exports, including diesel, hit a record that month, said researcher ClipperData, which tracks global oil flows.

Exports of refined products to several Asian countries, including India, Japan and South Korea, rose to record levels in 2016, and China took a record 303,000 bpd of U.S. produced fuels in February.

U.S. refiners are likely to play in important role in meeting rising demand from Asia, said Nicole Leonard, senior project consultant at Platts Analytics Oil & Gas Consulting.

Analysts and traders expect U.S. refined products exports to continue to grow, even with increased competition from large exporters in the Middle East, Europe and India.

Demand for U.S. fuels is underpinned by refinery challenges in neighboring countries, said Sandy Fielden, director of oil and products research for Morningstar Commodities Research in Austin, Texas.

“It doesn’t seem that these Latin American countries are going to cure their refining problems overnight,” he said.

Reporting by Devika Krishna Kumar in New York, Marianna Parraga in Houston; Additional reporting by Jarrett Renshaw


The Attempted Rape of Russia’s oil and gas

September 25, 2017

by Christian Jürs

Business oligarch, a synonym of “business magnate”, describes wealthy people that significantly influence the life of a state. The term came into wide circulation after the collapse of the Soviet Union in application to the people that became extremely wealthy in some post-Soviet republics. In particular, the term Russian oligarch describes Russian businessmen who came to prominence during the presidency of Boris Yeltsin.

The oligarchs started under Gorbachev during his period of market liberalization. Under the market liberalization, many smuggled rare goods into the country, such as PCs, and jeans, for a hefty profit margin, an unforeseen consequence of partial market liberalization with still excessive trade restrictions, and the willingness of some, less savory characters, to smuggle goods into the country and sell them on the black market.

Post-Soviet business oligarchs tended to achieve vast wealth by acquiring state assets very cheaply during the privatization process started by the Yeltsin government. Specific blame for their ascent to power is often levied on Anatoly Chubais and Yegor Gaidar, two of the ‘Young Reformers’ chiefly responsible for ‘shock therapy’ privatization in the early 1990’s. According to David Satter, author of Darkness at Dawn, “what drove the process was not the determination to create a system based on universal values but rather the will to introduce a system of private ownership, which, in the absence of law, opened the way for the criminal pursuit of money and power.”

As Yeltsin’s power weakened, oligarchs became increasingly influential in politics and played a significant role in financing the re-election of Yeltsin in 1996. The 1998 financial crisis hit the oligarchs hard, however, and those whose holdings were based on banking lost much of their fortunes. In the Putin era, the remaining oligarchs have come under fire for various alleged and real illegal activities, particularly the underpayment of taxes in the businesses they acquired. Vladimir Gusinsky (MediaMost) and Boris Berezovsky were both effectively exiled, and the most prominent, Mikhail Khodorkovsky (Yukos oil), was arrested in October 2003, sentenced to 8 years

March 26, 1996 Arco and Lukoil, one of Russia’s largest independent oil companies, form a joint venture to develop oil and gas reserves in Russia and other former Soviet republics. Total investment could reach $3 billion over a three year period. Arco will contribute almost all of the projected capital needs, even though it has a 54 percent stake in the venture. In September 1995, Arco purchased $250 million worth of convertible bonds in Lukoil, giving it a 6 percent stake in the Russian company. (FT, WSJ)

May 29, 1996 In Russia, Mobil and Texaco sign a production sharing agreement (PSA) for the Sakhalin III venture. Located offshore Sakhalin Island in Russia’s Far East, Sakhalin III is one of three large oil and gas developments being planned by foreign oil companies. In the deal, both companies agree to spend $150 million in exploration activities over a six year period. Since last year, many foreign oil companies have been waiting for revisions to Russia’s new PSA law, which is widely viewed as not offering adequate -legal protection for foreign investment in the country’s oil and gas sectors. (DJ, PON)

June 11, 1996 Exxon states that it will soon begin work on its $15-billion Sakhalin I oil and natural gas development in Russia’s Far East. The Sakhalin I project will develop an estimated 5 billion barrels of oil and 15 trillion cubic feet (Tcf) of gas located in three offshore hydrocarbon fields. The $300 million appraisal program will include drilling one exploration well and conducting a 3-D seismic survey. The U.S. company says that it will start working despite ongoing differences with the Russian government over the country’s new production sharing law, which is widely viewed as not offering adequate legal protection for foreign investment in the country’s oil and gas sectors. (FT)

August 8, 1996 U.S.-based Unocal and the government of Turkmenistan sign a deal to build a $2-billion, 900-mile long pipeline to carry gas from Turkmenistan=s 45-trillion cubic foot Dauletabad gas field through Afghanistan to markets in Pakistan. The proposed pipeline will carry 1.9 billion cubic feet (Bcf/d) initially and 3.8 Bcf/d after final completion in 2002. Unocal and Saudi Arabia-based Delta Oil will hold an 85 percent stake in the project, with the Gazprom (10%) and Turkmenrusgaz (5%) holding the remainder. (DJ)

September 20, 1996 In Russia, Arco signs several agreements with Lukoil to jointly invest $5-billion in energy projects over the next 18 years. The deals also create a new company, LukArco, which will be held jointly by Lukoil (54%) and Arco (46%). In late 1995, Arco bought an 8 percent stake in Lukoil. The recent moves will provide Arco with a prominent position in Russian upstream activities. (DMN)

February 10, 1997 Lukoil, Russia’s largest oil company, and the U.S. energy company Arco enter a $5 billion, 18-year joint venture to prospect for and develop oil in the former Soviet Union. Lukoil’s share is 54 percent and Arco’s is 46 percent. The venture, called Lukarko, plans investment of $400 million in 1997. Initial projects include a 12-percent stake in the Caspian Pipeline Consortium and a 5-percent share of the Tengiz field in Kazakstan. (HOH)

April 24, 1997 Russian President Boris Yeltsin names reformist First Deputy Prime Minister Boris Nemtsov to the additional post of minister of fuel and energy. Nemtsov, who has called for radical liberalization of the energy sector, replaces Pyotr Rodionov, who resigned in March. (DJ)

April 28, 1997 Russian President Boris Yeltsin signs a decree ordering sweeping reforms in the country’s natural gas, electric, rail and telecommunications sectors aimed at reducing rates and stimulating investment. At a news conference announcing the decree, First Deputy Prime Minister Boris Nemtsov explains that the state will retain control over these key natural monopolies and will not break up their national supply networks. With respect to natural gas, the government will retain its 40-percent equity stake in the monopoly RAO Gazprom indefinitely and work to strengthen Gazprom’s international position and boost its share price. Gazprom will lose its monopoly right to develop new gas deposits (which instead will be allocated at tenders open to competitors), will offer equal access and competitive rates on its national pipeline network to all producers (giving oil and other companies the opportunity to compete in the gas business), and will be required to ensure transparency of its finances with detailed annual financial reports. (DJ)

May 13, 1997 Russian President Boris Yeltsin signs a decree substantially increasing the state’s role in managing natural gas giant RAO Gazprom. The order names First Deputy Prime Minister Boris Nemtsov to head a special commission charged with setting government policy at the 40-percent state¬owned company (Russia’s largest) and calls on the government to draft new regulations on foreign investment in Gazprom shares. (DJ)

June 5, 1997 Russia’s Deputy Prime Minister Alfred Kokh announces plans to sell an additional 15 percent share of state-owned oil producer AO Lukoil. No details are provided. (WSJ)

June 24, 1997 Russia’s State Duma (lower house) approves a long-awaited law that would allow production-sharing agreements for development of major natural resource deposits, including five oil fields (Samotlor, Krasnoleninsk, Romashkinskoye, Prirazlomnoye, North Sakhalin), the Kuranakhskoye gold field, and the Yakovlevskoye iron-ore deposit. Investment in these projects is expected to total $16 billion. The legislation now goes to the upper house for consideration, which is expected to consider the measure this fall. (DJ)

July 1, 1997 The Russian government begins offering many of its remaining oil-industry holdings in a series of auctions and investment tenders expected to raise $780 million by mid-December 1997. The privatizations, which are open to foreign bidders, include Russia’s stakes in AO Vostsibneftegaz (38 percent), AO Vostochnaya Neftyanaya (51 percent), AO Sibur (36.28 percent), AO Tyumenskaya Neftyanaya (48.68 percent), AO Komitek (27.1 percent), and AO Norsi-Oil (45.45 percent). (WSJ)

September 25, 1997 Russia’s State Property Committee approves a privatization plan for AO Rosneft. The approval clears the way for the sale of the Russian government’s last major holding in the oil industry. The sale will take place during the fourth quarter of 1997 and the first half of 1998 and will be open to foreign and domestic investors. (DJ)

October 1, 1997 Russian oil company AO Sidanko’s petition to settle a lengthy legal battle with the Russian government and state-owned AO Rosneft for control of the Siberian oil production company AO Purneftegaz is accepted by the Supreme Arbitration Court. The end of the lawsuit clears the final hurdle for the privatization of AO Rosneft. (DJ)

November 17, 1997 Royal Dutch/Shell announces that it will invest $1 billion in a joint venture with Russia’s Gazprom to produce crude oil, natural gas liquids, and natural gas in Russia and elsewhere. Shell and Gazprom will share equal ownership in the partnership. In a separate memorandum of understanding, Shell, Gazprom, and Russian oil company, Lukoil, announce that they will submit a joint bid for a stake in Russian oil company, Rosneft, when it becomes available for privatization in the near future. (NYT)

December 9, 1997 Russian oil company AO Yukos announces that it has acquired a controlling interest in Russia’s state owned Eastern Oil Company. Yukos won a 45 percent stake in the Siberian oil producer for $775 million, adding to the 9 percent that Yukos already held. The purchase secures Yukos’s position as Russia’s second largest oil producer behind AO Lukoil. (WSJ)

February 3, 1998 Russia’s RAO Gazprom has sold its 10 percent stake in Centgas, a consortium set up to construct a $2 billion Turkmenistan-Afghanistan-Pakistan natural gas pipeline. U.S.-based Unocal Corporation acquired 7 percent of Gazprom’s shares, bringing its total stake in the Centgas to 54 percent. The remaining 3 percent went to Japanese-owned Indonesia Petroleum and Itochu, South Korea’s Hyundai Engineering & Construction Company, and Pakistan’s Crescent Group. The 800-mile pipeline will extend from the Daulatabad gas field in southeastern Turkmenistan through Afghanistan to Pakistan. (DJ)

March 21, 1998 Russia announces plans for the sale of state-owned Rosneft, the Russian government’s last major holding in the oil industry. The government is offering a 75 percent stake in the firm at a starting price of $2.1 billion. Buyers will be required to invest $400 million in the company within three months of the sale. (WP)

July 27, 1998 Russia announces plans to sell a five percent stake in RAO Gazprom, the country’s largest company and the world’s largest natural gas company, with the Russian government retaining a 35 percent stake in the company. The five percent stake is valued at $500 million, although the government may get more if the shares are sold to foreign investors. The Royal Dutch/Shell Group and Italy’s ENI SpA are considered to be probable contenders for the shares. Gazprom holds nearly 40 percent of the world’s proven natural gas reserves. (WSJ)

August 13, 1998 As part of Russia’s continuing privatization program, the government announces that it will sell a five percent stake in Gazprom as a single lot, at a starting price of $1.65 billion. The sale will leave the government with a 35 percent stake in the natural gas monopoly. In other privatization news, Gazprom President Rem Vyakhirev announced on August 6, 1998, that Gazprom will not bid for a controlling stake in Rosneft, Russia’s only remaining state oil company. (DJ)

November 2, 1998 Russian President Boris Yeltsin approves the sale of an additional 5 percent stake in Gazprom, the national natural gas company. The decree will allow foreign ownership of Gazprom stock to increase from its former limit of 9 percent to 14 percent. (DJ)

December 21, 1998 Ruhrgas AG, a major German natural-gas distributor, buys a 2.5 percent stake in giant Russian gas monopoly RAO Gazprom for $660 million, strengthening the two companies’ cooperation. The successful tender of the Gazprom stake brings relief to the cash-strapped Russian government, which is battling a deep economic crisis and has $17.5 billion in foreign debt payments due in 1999. According to German press reports, Ruhrgas will eventually hold a 4 percent stake in Gazprom once both companies have set up a joint venture. (DJ)

September 10, 1999 Creditors of the Russian oil company Sidanco agree to liquidate the company, dealing a blow to BP Amoco’s efforts to keep Sidanco, in which it owns a 10 percent stake, united. BP Amoco alleges that the procedure used to make the decision to liquidate Sidanco was influenced by manipulation of the register of creditors by Sidanco’s Russian rivals. (DJ, WSJ, NYT)

November , 1999 The Russian government sells a 9 percent stake in Russia’s largest oil company, Lukoil, to a Cyprus-based firm, Reforma Investment. The Russian government had previously held a 27 percent stake in Lukoil. (WSJ)

December 21, 1999 The Export-Import Bank drops a proposed $500 million loan to Russia’s Tyumen Oil after Secretary of State Madeleine Albright exercises her statutory authority to block the transaction. The loan had been controversial in part because of Tyumen Oil’s dispute with BP Amoco over the bankruptcy of Russian oil firm Sidanko, in which BP Amoco owns a major stake. BP Amoco and Tyumen Oil later settled the dispute on December 23. (DJ)

March 23, 2000 Russia’s Lukoil announces the discovery of as much as 2.2 billion barrels of new oil reserves in the Russian sector of the Caspian Sea. (WSJ)

March 26, 2000 Vladimir Putin is elected president of Russia on the first ballot, winning 53 percent of the popular vote. Putin took office as acting president in December 1999 after the resignation of Boris Yeltsin. (DJ)

May 21, 2000 Russian President Vladimir Putin appoints Alexander Gavrin as Minister of Energy. Gavrin, a former Lukoil executive, replaces Victor Kalyuzhny. Putin also abolishes Russia’s State Committee on the Environment, transferring its functions to the Ministry of Natural Resources, which licenses oil and gas development. (WSJ, WP)

September 19, 2000 The Russian government sells off an 85 percent stake in the oil company Onanko for nearly $1.1 billion to a company affiliated with Tyumen Oil. The Tyumen bid beat a lower bid from a consortium including Yukos Oil and Sibneft. (DJ)

November 3, 2000 Russia’s Lukoil announces that it will purchase Getty Petroleum Marketing of the United States for $71 million. Lukoil eventually intends to switch Getty’s 1,300 retail outlets in the Northeastern and Middle Atlantic states to the Lukoil brand name. The purchase represents the first takeover of a publicly traded American company by a Russian firm. (DJ)

November 30, 2000 Russia’s Finance Minister Alexei Kudrin announces that an investigation by Russian tax officials has found widespread evidence of tax evasion by Russian oil companies, estimated to cost the Russian government $9 billion annually in lost revenues. Russian oil companies account for about 40 percent of Russia’s hard currency export revenues and 25 percent of the Russian government’s tax revenues. (NYT, WSJ, DJ)

April 22, 2002 Russia’s largest oil producer, OAO Lukoil, unveils a restructuring plan that aims to double the company’s output by 2010. In addition to investments in new fields, the company also plans to increase output by outsourcing its drilling and well-management to oil services companies. The company plans to increase production 20% this year alone, to 1.4 million barrels per day. (WSJ)

November 27, 2002 Officials of four of Russia’s largest oil companies, Lukoil, Yukos, Sibneft, and Tyumen, announce a preliminary agreement for a joint project to build a $1.5 billion dollar Arctic oil port near the town of Murmansk. This would enable Russia to expand ocean-going tanker exports. (WSJ)

December 4, 2002 The government of Russia sells off 5.9 percent of Lukoil for $775 million, further privatizing the oil company and giving the government additional funding to service the foreign debt. (Reuters)

February 11, 2003 BP invests $6.75 billion in Russia by creating a new joint venture company with TNK (Russia’s fourth largest oil company) and Sidanco, of which BP already held a 25% stake. BP will have a 50% stake in the new company. TNK’s shareholders, investment groups Alfa Group and Access-Renova, will hold the other 50% stake of the new firm, and board control will be balanced equally. The investment by BP is equivalent to almost 10% of Russian foreign exchange reserves and around 1.5% of Russian gross domestic product (GDP). (Reuters)

February 14, 2003 The lower house of the Russian Parliament (Duma) approves legislation that will allow the breakup of the Russian electricity monopoly, Unified Energy System. Although it is still unclear what will happen to shares after the breakup, eventually Russia’s electricity sector will be reorganized into groups of power producers, distributors, and sales units. The government will retain control of the grid itself. Unified Energy System’s grid is the largest in the world. (NYT)

April 17, 2003 The Russian government is instructed by Prime Minister Mikhail Kasyanov to begin preparing a feasibility study for the construction of a privately-owned $4.5 billion oil pipeline to Murmansk and an oil terminal there. The planned pipeline would carry about 2.4 million barrels per day of crude oil from the Urals oil production region. This would be the first privately-owned pipeline in Russia. (NYT)

April 22, 2003 Yukos Oil Company and Sibneft, Russia’s first and fifth largest oil companies, respectively, in terms of production, announce that they will merge in a deal in which Yukos will pay $13 billion in cash and stock for Sibneft. The new company will be the world’s fifth-largest publicly traded oil and gas company, with a production of 2.4 million barrels per day. The new company plans to become a major player outside of Russia as well. (NYT, WSJ)

April 28, 2003 Russian oil company Lukoil announces that its proven oil and natural gas reserves have risen 15% over the past year through acquisitions and discoveries and that its reserves are now the second-highest held by a non-state-owned company in the world. The company, as of January 2003, had proven reserves of 19.3 billion barrel of oil equivalent compared with 16.8 billion as of January 2002, including 15.3 billion barrels of crude oil and 24.2 trillion cubic feet of natural gas. (Reuters)

May 28, 2003 Yukos of Russia signs a $150 billion agreement with China National Petroleum Company (CNPC), wherein CNPC agrees to purchase 5.13 billion barrels of oil between 2005 and 2030 via a $2.5 billion pipeline from Russia’s Western Siberia fiel

August 14,2003 Russia approves a $13 billion merger between Yukos and Sibneft, creating “YukosSibneft,” Russia’s first “supermajor” and one of the world’s largest publicly traded oil companies. (WMRC)ds to China’s Daqing field. (Reuters)

In mid-1998 British officials investigating Russian organized criminal activities brought the attention of US authorities to a link between YBM Magnex, a front company for suspected Russian gangster Semyon Yukovich Mogilevich, and Benex, a firm owned by Peter Berlin, the husband of one of the subsequently-suspended Bank of New York (hereinafter ‘BNY’) vice-presidents. From October 1998 to March 1999, $4.2 billion in suspect money passed through the BNY accounts of Benex and other firms. Investigators allowed the account to remain open after March of 1999 as they continued their probe, and the total amount laundered eventually proved to be in excess of $10 billion. In August 1999, Swiss banks in Geneva discovered massive fraud involving Swiss banks and local prosecutors immediately froze 22 accounts of Russian individuals and corporate entities, worth a total of $15 million.

The evidence of  international criminal wrongdoing extended far beyond suspected organized crime figures like Mogilevich and point to high-level officials in the US and Russia. Investigators began to look into whether funds from the subsequently insolvent Russian bank, Menatep, were also involved in money laundering at BNY. Menatep was then owned by Russian oligarch Mikhail Khodorkovsky and employed, as a senior executive, Konstantin Kagalovsky.

Federal officials, in the main, the New York office of the FBI in conjunction with their counterparts in Britain and Switzerland, launched an in-depth an investigation of what later proved to be the largest money-laundering scheme in US history. The investigation revealed that billions of dollars from Russia, the bulk of it from Russian criminal elements, were channeled through accounts at the Bank of New York. Two BNY vice-presidents were initially suspended as a result of the probe.

Mogilevich utilized the aliases Seva Moguilevich, Semon Yudkovich Palagnyuk, Semen Yukovich Telesh, Simeon Mogilevitch, Semjon Mogilevcs, Shimon Makelwitsh, Shimon Makhelwitsch, and “Seva”, according to the FBI.

Mogilevich masterminded the great oil swindle in which official agencies like the International Monetary Fund and the World Bank, along with the Israeli-controlled Bank of New York, sent huge sums of money to the so-called “oligarchs” who successfully bought up the Russian oil and gas industry. They were, in essence, being paid for a controlling interest in their holdings. These oligarchs, listed herewith, were all men with previous criminal backgrounds in drug sales, prostitution, extortion, espionage and money laundering. Besides their criminal records, the oligarchy all were Jewish and most held dual Russian/Israeli citizenship.

In order to facilitate American assistance, Mogilevich made contact with Republican lobbyist Jack Abramof. From 1996, the American CIA in conjunction with various European law enforcement agencies, were tapping Mogilevich’s international telephone calls (with the assistance of the secret NSA “Operation Harvest” that taps into the communications satellites worldwide) and became aware of the outlines of the enormous swindle. From this, it was learned that a person being contacted with the purpose of security top level financial support and official U.S. government blindness, was a man called  “Производитель” or Producer. This was later positively identified as Jack Abramof, who had produced a terrible movie called – “Red Scorpion,” released in 1989. His high-level American contact was identified as  – Истребитель Exterminator- who was later positively identified as Tomas Dale DeLay, Congressman and powerful Republican figure from Texas. At one time, DeLay, a personal friend of Abramof, ran a pest exterminiator company in Texas, one that failed due to the rampant alcoholism of the later Republican Whip.

The problem with Mogilievich’s plan was that Yeltsin was forced to retire and Vladimir Putin, a former KGB colonel, was elected to the office of Russian President. Unlike Yeltsin, who was a drunken American “asset,”, Putin at once recognized the potential economic disaster to Russia if the American oil interests controlled of that nation’s increasingly valuable natural resources. He followed the old Italian dictum that he who goes softly goes safely and he who goes safely goes far. In short, Putin broke the back of the U.S. sponsored oligarchs, either imprisoning them or causing them to flee from extradition-safe Israel. The oil and natural gas assets reverted back to state control and none of those, including institutions and private parties, who invested with the oligarchs in the hope of enormous financial rewards, recovered a cent of their ill-advised investments.


U.S. Imports from Russia of Crude Oil and Petroleum Products (Thousand Barrels)

Jan-1995       0

Feb-1995       0

Mar-1995       0

Apr-1995       0

May-1995      367

Jun-1995       440

Jul-1995        1257

Aug-1995      4209

Sep-1995      1498

Oct-1995       0

Nov-1995      831

Dec-1995       469


Jan-1996       326

Feb-1996       394

Mar-1996       556

Apr-1996       0

May-1996      1948

Jun-1996       429

Jul-1996        1308

Aug-1996      998

Sep-1996      1182

Oct-1996       1313

Nov-1996      0

Dec-1996       797


Jan-1997       653

Feb-1997       519

Mar-1997       395

Apr-1997       601

May-1997      0

Jun-1997       238

Jul-1997        293

Aug-1997      992

Sep-1997      0

Oct-1997       412

Nov-1997      622

Dec-1997       0


Jan-1998       0

Feb-1998       347

Mar-1998       106

Apr-1998       3

May-1998      0

Jun-1998       1006

Jul-1998        2141

Aug-1998      33

Sep-1998      1005

Oct-1998       453

Nov-1998      1623

Dec-1998       1966


Jan-1999       868

Feb-1999       792

Mar-1999       814

Apr-1999       2261

May-1999      3382

Jun-1999       4475

Jul-1999        4296

Aug-1999      4281

Sep-1999      4251

Oct-1999       3396

Nov-1999      2833

Dec-1999       962


Jan-2000       898

Feb-2000       3485

Mar-2000       1952

Apr-2000       2481

May-2000      1359

Jun-2000       2242

Jul-2000        2412

Aug-2000      2276

Sep-2000      2655

Oct-2000       3427

Nov-2000      1485

Dec-2000       1710


Jan-2001       5904

Feb-2001       5126

Mar-2001       1641

Apr-2001       3438

May-2001      2716

Jun-2001       1423

Jul-2001        2520

Aug-2001      3652

Sep-2001      3725

Oct-2001       1044

Nov-2001      663

Dec-2001       931


Jan-2002       1877

Feb-2002       1420

Mar-2002       2956

Apr-2002       5750

May-2002      11487

Jun-2002       6944

Jul-2002        6814

Aug-2002      7305

Sep-2002      6763

Oct-2002       9153

Nov-2002      7663

Dec-2002       8558


Jan-2003       5609

Feb-2003       7581

Mar-2003       7981

Apr-2003       3961

May-2003      6455

Jun-2003       15809

Jul-2003        17063

Aug-2003      12751

Sep-2003      8244

Oct-2003       2894

Nov-2003      2124

Dec-2003       2239


Jan-2004       4227

Feb-2004       5347

Mar-2004       6027

Apr-2004       11155

May-2004      7016

Jun-2004       12963

Jul-2004        12293

Aug-2004      7938

Sep-2004      7029

Oct-2004       9143

Nov-2004      14711

Dec-2004       11302


Jan-2005       10451

Feb-2005       12979

Mar-2005       15799

Apr-2005       19797

May-2005      11324

Jun-2005       10487

Jul-2005        19032

Aug-2005      7344

Sep-2005      13973

Oct-2005       13486

Nov-2005      6497

Dec-2005       8512


Jan-2006       6776

Feb-2006       8524

Mar-2006       6805

Apr-2006       6589

May-2006      19248

Jun-2006       12904

Jul-2006        13164

Aug-2006      15049

Sep-2006      16103

Oct-2006       11332

Nov-2006      6702

Dec-2006       11450


Jan-2007       10768

Feb-2007       6767

Mar-2007       14109

Apr-2007       16682

May-2007      15462

Jun-2007       8558

Jul-2007        16542

Aug-2007      12909

Sep-2007      11671

Oct-2007       14022

Nov-2007      14103

Dec-2007       9481


Jan-2008       12155

Feb-2008       13083

Mar-2008       12466

Apr-2008       12053

May-2008      14268

Jun-2008       22914

Jul-2008        17740

Aug-2008      15185

Sep-2008      12999

Oct-2008       12214

Nov-2008      13343

Dec-2008       11844


Jan-2009       15994

Feb-2009       13224

Mar-2009       19904

Apr-2009       22772

May-2009      25083

Jun-2009       18532

Jul-2009        23484

Aug-2009      15649

Sep-2009      14580

Oct-2009       11945

Nov-2009      12435

Dec-2009       11923


Jan-2010       14353

Feb-2010       11850

Mar-2010       15315

Apr-2010       17604

May-2010      22293

Jun-2010       22791

Jul-2010        22295

Aug-2010      24371

Sep-2010      19427

Oct-2010       20298

Nov-2010      16835

Dec-2010       15938


Jan-2011       17283

Feb-2011       12224

Mar-2011       21380

Apr-2011       21122

May-2011      21190

Jun-2011       20655

Jul-2011        17476

Aug-2011      18150

Sep-2011      17748

Oct-2011       21309

Nov-2011      22120

Dec-2011       17117


Jan-2012       17728

Feb-2012       8344

Mar-2012       10105

Apr-2012       11637

May-2012      16972

Jun-2012       19645

Jul-2012        15220

Aug-2012      11406

Sep-2012      16853

Oct-2012       17127

Nov-2012      13354

Dec-2012       16221


Jan-2013       10162

Feb-2013       12717

Mar-2013       14063

Apr-2013       17531

May-2013      17185

Jun-2013       15574

Jul-2013        14128

Aug-2013      17734

Sep-2013      13755

Oct-2013       17210

Nov-2013      9761

Dec-2013       8204


Jan-2014       6584

Feb-2014       10207

Mar-2014       13143

Apr-2014       12136

May-2014      10877

Jun-2014       8234

Jul-2014        12563

Aug-2014      12226

Sep-2014      8455

Oct-2014       9810

Nov-2014      5102

Dec-2014       11008


Jan-2015       12422

Feb-2015       8398

Mar-2015       11667

Apr-2015       10737

May-2015      10447

Jun-2015       15002

Jul-2015        13810

Aug-2015      15790

Sep-2015      11058

Oct-2015       9528

Nov-2015      9597

Dec-2015       6791


Jan-2016       12251

Feb-2016       12640

Mar-2016       10206

Apr-2016       15266

May-2016      13483

Jun-2016       14547

Jul-2016        16697

Aug-2016      15454

Sep-2016      12618

Oct-2016       15220

Nov-2016      12562

Dec-2016       10342


Jan-2017       10796

Feb-2017       8919

Mar-2017       11734

Apr-2017       9231

May-2017      12425

Jun-2017       15100

Source: U.S. Energy Information Administration



Gazprom unseats ExxonMobil as world’s largest energy company

September 25, 2017


Russia’s Gazprom has topped the S&P Global Platts 250 rating of the world’s energy companies. The company has ousted US oil and gas giant ExxonMobil which reigned for 12 years.

The Russian company is focused on geological exploration, production, transportation, storage, processing and sales of gas, gas condensate and oil, sales of gas as a vehicle fuel, as well as generation and marketing of heat and electric power.

Gazprom has the largest reserves of natural gas in the world and is among Russia’s top four oil producers.

ExxonMobil is now ranked only ninth. Among other big improvers, Germany’s E.ON climbed 112 places to 2nd place from 114th. India’s Reliance Industries went up to 3rd place from last year’s 8th.

The first five companies also include Korea Electric Power and Chinese CNPC. Russian oil company Lukoil is in sixth place.

The rating is formed on the basis of financial indicators of companies, including the value of assets, total revenues, net profit and others. All companies on the list have assets of more than $5.5 billion.

The world’s top ten largest companies earned $63.7 billion last year, 14 percent lower than the $74.3 billion posted the year before.

Coal companies saw a substantial decline in the rating, as more countries are striving to increase the use of renewable energy sources and cleaner fuels. However, China’s Shenhua Energy rose to 13th place from 25th, as the price of coal in China rose sharply following output cuts by Beijing.



From the FAS Project on Government Secrecy

Volume 2017, Issue No. 67

September 25, 2017


The October 2016 term of the US Supreme Court was widely seen as “diminished both with regard to volume and content” compared to prior years. But the upcoming term is likely to be different.

“With the Court already accepting over 30 cases, many of which raise difficult questions in various areas of law, the October 2017 term has the potential to be one of the most consequential in years,” said the Congressional Research Service in a new report previewing some of those cases.

For example, “In a case that could decide whether cell phone users have a protected privacy interest in the trove of location data held by their wireless carriers, the Court in Carpenter v. United States will examine whether the government’s warrantless collection of historical cell phone location data is constrained by the Fourth Amendment of the Constitution.” See Supreme Court October Term 2017: A Preview of Select Cases, September 19, 2017.

See also Supreme Court October Term 2016: A Review of Select Major Rulings, September 15, 2017.

Other new and updated Congressional Research Service reports that provide informative background on current topics of public policy interest include the following.

Patent Law: A Primer and Overview of Emerging Issues, September 21, 2017

Chevron Deference: A Primer, September 19, 2017

EPA’s Role in Emergency Planning and Notification at Chemical Facilities, September 18, 2017

Confederate Symbols: Relation to Federal Lands and Programs, September 20, 2017

Normalization of the Federal Reserve’s Balance Sheet, CRS Insight, September 20, 2017

Hurricanes and Electricity Infrastructure Hardening, CRS Insight, September 20, 2017

Wastewater Infrastructure: Overview, Funding, and Legislative Developments, September 22, 2017

Oil Spills: Background and Governance, updated September 15, 2017

Turkey: Background and U.S. Relations in Brief, updated September 19, 2017

Kurds in Iraq Propose Controversial Referendum on Independence, CRS Insight, updated September 18, 2017

Lebanon, updated September 20, 2017

The State Department’s Trafficking in Persons Report: Scope, Aid Restrictions, and Methodology, September 19, 2017

Serbia: Background and U.S. Relations, September 19, 2017

Iran’s Nuclear Program: Tehran’s Compliance with International Obligations, updated September 18, 2017

Redeploying U.S. Nuclear Weapons to South Korea: Background and Implications in Brief, September 14, 2017


What the Kurdish Referendum Means for the Future of Iraq

September 23, 2017

by Patrick Cockburn

The Unz Review

On 10 April 2003, I was driving on a road west of Kirkuk, waiting for the city to be captured by the Kurdish Peshmerga and worried that we might arrive there before the Iraqi army had withdrawn or broken up. We could see no cars from Kirkuk coming towards us, which might mean that there was fighting still going on.

We could see abandoned Iraqi army camps beside the road but no looters, a bad sign in Iraq in wartime where only extreme danger will deter looters from trying to grab the richest pickings. We were havering about what to do, when a car appeared from the direction of Kirkuk whose driver leaned out the window to shout: “It is finished – the way to Kirkuk is open.”

An orgy of looting was going on inside the city, with the theft of everything from mattresses to fire engines. I saw two looters drive away a large yellow bulldozer they had just stolen. The Kurdish Peshmerga had taken over the city a few hours earlier, saying that they were there to fill the vacuum left by the disintegration of the Iraqi army and to restore order, though they did little to stop the looters.

They had repeatedly promised the Americans that they had no plans to seize Kirkuk and, even now, were insisting that their occupation was only temporary. A senior Kurdish officer standing in the wreckage of the governor’s office told me that “we’re expecting to withdraw some of our men within 45 minutes”.

Fourteen years later, the Kurds still control Kirkuk, the oil capital of northern Iraq with a mixed population of Kurds, Arabs and Turkmen, as well as much of the surrounding province. The leaders of the US-led coalition during the invasion had feared that, if the Kurds captured the city, they would provoke a Turkish invasion, since Turkey had declared that it would not tolerate such a thing. I wrote an article describing the Kurdish takeover with the headline “Kurdish victory provokes fears of Turkish invasion”.

It never happened: in the years following 2003, Iraqi Kurdistan has been like the eye at the centre of a hurricane, always brushed by disastrous winds but avoiding complete catastrophe.


Thousands rally across Catalonia for independence from Spain

September 25, 2017


Thousands of Catalan separatists are rallying in public squares in Barcelona and other towns in support of a disputed referendum on independence of the north-eastern region from Spain.

Many are carrying pro-independence flags and signs calling for the October 1 vote that the Spanish government calls illegal and has pledged to stop.

The crowds have been asked by secessionist politicians and grassroots groups to print and distribute posters supporting the vote.

Carme Forcadell, the speaker of Catalonia’s regional parliament, told a Barcelona crowd: “I ask you to go out and vote. Vote for the future of Catalonia.”

Spain’s Constitutional Court suspended the law calling for the referendum and police have cracked down on preparations for the vote.

Separatists have pressed ahead anyway, vowing to declare independence if the “Yes” wins.

Journalists reporting on Kirkuk frequently referred to it as a “powder keg” because of its ethnic and sectarian divisions along with its oil wealth, which so many different parties would like to control.

The cliche is a useful one for reporters in Iraqi Kurdistan in general, because it suggests that an explosion will happen without saying when. Again and again, predictions of Turkish invasions or war between the Peshmerga and Iraqi central government forces over disputed territories have proved false or premature.

The referendum on independence for the Kurdish controlled territory, due to take place on 25 September, is the latest event billed as threatening the stability of Iraq and a good chunk of the Middle East. Seldom has a democratic poll in such a small place been so universally denounced by so many international powers, including the US, UK, Germany and France.

A White House statement emphasises “to the leaders of the Kurdistan Regional Government (KRG) that the referendum is distracting from efforts to defeat Isis and stabilise the liberated areas. Holding the referendum in disputed areas is particularly provocative and destabilising.”

Regional powers like Turkey and Iran have likewise demanded that the referendum be cancelled and threatened retaliation if it is not. In Baghdad, the Prime Minister Haider al-Abadi has denounced it and the Supreme Court ruled that it was “unconstitutional”. But for all the sound and fury, it looks as if the vote is going ahead.

A peculiarity of this hysterical reaction is that the referendum is non-binding and does not commit KRG President Masoud Barzani to doing anything concrete to achieve self-determination. He himself says that the purpose of the poll “is to tell the world that we want independence”, adding that outside powers had believed that the calling of the referendum was merely “a pressure card”, a ploy to extract concessions from Baghdad.

By pressing ahead with it, he believes he has put Kurdish independence firmly on the agenda. If nothing else, he has demonstrated that the international community is terrified by anything that destabilises Iraq and that the cooperation of the Kurds cannot be taken for granted.

Among the Iraqi Kurds, Barzani has already re-established his credentials as the standard bearer of Kurdish nationalism, defying threats and pleas for postponement or cancellation of the vote. Even Kurdish leaders opposed to it as too risky are calling for as large a “yes” vote as possible, so as not to undermine the demand for a Kurdish state.

The national issue also diverts attention from the corruption and incompetence of the KRG government and the dreadful condition of its economy. Barzani has scheduled presidential and parliamentary elections for 1 November, when he and his Kurdistan Democratic Party should benefit from an overwhelmingly positive referendum result 35 days earlier.

The political landscape of northern Iraq is changing in other ways. Isis is on the run and on Thursday the Iraqi army started an offensive against one of its last substantial enclaves at Hawija west of Kirkuk.

As always, calculating the political and military balance of power in Iraq is difficult because so many players are involved and the way they come together is unpredictable. How, for instance, will Abadi react to being treated so contemptuously by the KRG? His forces have just won a historic victory over Isis by recapturing Mosul after a nine-month siege. He will not want to lose the credit won then by being faced down by Barzani.

On the other hand, Baghdad’s hard-fought success at Mosul dependeds on the air support of the US-led coalition. Without it, the central government’s military strength is for the moment too modest to give it a military option against the Kurds.

There is another reason why the Kurdish leadership may show caution after the referendum, assuming there is no last-minute postponement: they have a lot to lose. The Kurdish demand for self-determination is not like that of the Algerians or Vietnamese after the Second World War because, in many respects, the

KRG is already highly independent and has been so since 2003. Its government is stronger politically and militarily than many members of the UN. But is also true that the Kurds’ real share of power within the nominally power-sharing government in Baghdad has been shrinking. For practical purposes Iraq is already two countries, despite the pretence that it is a unitary state.

The real constraint on self-determination for Iraqi Kurdistan is that, referendum or no referendum; it remains a minnow in shark-infested waters. The US and its allies will no longer need the Kurds to the degree they do today once Isis is defeated. The Iraqi central government will get stronger rather than weaker. The safest course for the Kurds is still a confederal power-sharing agreement with Baghdad, but so far neither side has had the will to make this happen.



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