Saudi Aramco CEO: Oil attack was huge, but we managed to restore capacity


LET’S BRING IN TWO OF THE TOP NAMES IN THE ENERGY SECTOR, MANAGING DIRECTOR FOR OPPENHEIMER, TIM REDMOND. GUYS, SPECIFICALLY WHAT HAPPENS NEXT. AND, TIM, YOU WERE OPERATING OFF THE ASSUMPTION YESTERDAY THAT OF THIS NEARLY SIX MILLION BARRELS THAT WERE TAKEN OFFLINE OVER THE WEEKEND, THAT ABOUT TWO WOULD BE BACK ONLINE SOON, AND THAT’S THE NEWS WE GOT TODAY. WHAT’S THE NEXT PIECE OF NEWS, AND SINCE YOU’RE GOOD AT PREDICTING, WHAT WILL THAT BE?>>I THINK THE BIGGEST UNCERTAINTY IS WHAT, IF ANY, RETALIATION WILL HAPPEN. IS THAT GOING TO BE A SAUDI-LED ATTACK? IS THERE GOING TO BE A BROADER COALITION PUT IN PLACE, AND I THINK THAT IS THE NEXT SHOE TO DROP RIGHT NOW. THE MOVE LOOKS DRAMATIC OVER TWO DAYS IN WTI, BUT IF YOU LOOK INTO THE FUTURE, IT’S REALLY ONLY UP ABOUT $2 A BARREL. YOU’VE SEEN A LITTLE POP ON THE FRONT END, BUT THIS ISN’T A GAME-CHANGING MOVE ACROSS THE WHOLE DURATION OF THE FUTURE STRIP. LIZ: PENNSYLVANIA VEL, YOU WERE SURPRISED — PAVEL, YOU WERE SURPRISED AT THE SPEED, BUT THE SAUDIS HAD A LOT OF BUILT-IN REDUNDANCY E IN ANTICIPATION OF ANYTHING COMING OFFLINE FOR WHATEVER REASON, SO IMMEDIATELY THEY WERE ABLE TO AT LEAST SHIFT OVER TO SOME DIFFERENT PIPELINES, ETC. TELL ME YOUR SENSE OF WHAT’S HAPPENING ON THE GROUND IN SAUDI ARABIA. THEY’RE ACTING VERY CALM, EVERYTHING’S FINE, DON’T WORRY, THE ARAMCO IPO’S GOING TO HAPPEN IN THE NEXT 12 MONTHS, BUT WHAT ARE YOU HEARING?>>WELL, LOOK, ANYTHING SAUDI ARAMCO SAYS WE NEED TO TAKE WITH A GRAIN OF SALT. THEY WANT TO GO PUBLIC PARTLY FOR THAT REASON. THEY WANT TO SEND THIS MESSAGE OF CONFIDENCE TO THE MARKET, REASSURANCE. I THINK WE OUGHT TO BE SKEPTICAL. LOOK, THIS IS HIGHLY SOPHISTICATED ENERGY INFRASTRUCTURE. THIS IS NOT JUST BLOWING UP A PIPELINE AS HAPPENS IN PLACE LIKE NIGERIA. THIS IS THE WORLD’S BIGGEST OIL PROCESSING FACILITY. YES, THERE IS REDUNDANCY, BUT THEY WILL HAVE TO GET REPAIR EQUIPMENT CUSTOM MADE MACHINERY IMPORTED FROM ABROAD, DELIVERED, INSTALLED. NONE OF THAT IS GOING TO BE DONE INSTANTANEOUSLY, AND WHATEVER ARAMCO SAYS ABOUT THE TIMETABLE, WE WOULD TAKE THE OVER IN TERMS OF THE DURATION. LIZ: INTERESTING. TIM, WEST TEXAS YESTERDAY SETTLED AT AROUND $62.90. THAT WAS A GAIN OF 14.6%. TODAY WE CAN SEE WE’VE PULLED BACK, AND IT’S HARDLY ANYWHERE NEAR THAT HUGE PERCENTAGE. IS THIS A SHORTING OPPORTUNITY? WHERE WOULD YOU BE TRADING THIS KIND OF MOVE?>>NO, I DON’T THINK IT’S A SHORT OPPORTUNITY BECAUSE LOOKING FORWARD THERE IS SO MUCH POLITICAL RISK THAT YOU’VE HAD. YOU KNOW, YOU HAVE HEARD THIS PHRASE PUT OUT IN THE PUBLIC ABOUT A RISK PREMIUM NOW PUT IN CRUDE. THERE WAS MAYBE A LITTLE LAISSEZ-FAIRE ATTITUDE ABOUT SUPPLY AND POSSIBLY AN OVERSUPPLY SITUATION. NOW IT LOOK LIKE THE SAUDI DISRUPTION, MAYBE A COUPLE MILLION BARRELS A DAY FOR TWO WEEKS, THAT’S 40 MILLION IN AGGREGATE, WE THOUGHT IT COULD BE MANY MULTIPLES OF THAT JUST LAST NIGHT. I THINK THAT RISK PREMIUM IS THERE RIGHT NOW, AND I THINK THAT WILL SUPPORT THIS MODEL LASTLY — MODEST RALLY WE’VE SEEN. LIZ: WHAT WOULD YOU PICK, TIM? WHAT ARE THE NAILS YOU REALLY LIKE?>>ON THE LARGE CAP SIDE IS NOBLE ENERGY. IT’S BEEN A REAL UNDERPERFORMER THIS WEEK BECAUSE THE COMPANY HAS EXPOSURE IN ISRAEL. HOWEVER, 76% OF THE PRODUCTION COMES FROM THE U.S. 90% IS OUTSIDE ISRAEL. THAT’S ONE WE LIKE ON THE LARGE CAP. LIZ: AND, PAVEL, WHAT ARE YOUR PICKS? IT’S JUST HITTING THE TAPE THAT THE ISRAELI ELECTION EXIT POLLS ARE SHOWING THAT THE PRESIDENTIAL RACE — REMEMBER, THEY HAD THE PRIME MINISTER RACE, THEY HAD TO REDO IT, TOO CLOSE TO CALL AT THIS MOMENT. WE HAVE A PREDICTION THAT NETANYAHU AND GANZ, HIS COMPETITOR, FALL SHORT OF THE MAJORITY, 61 SEATS. PAVEL, WHAT ARE YOUR PICKS?>>OCCIDENTAL. INTERESTINGLY ENOUGH, A COMPANY LIKE NOBLE ALSO HAS SOME EXPOSURE IN THE MIDDLE EAST, SPECIFICALLY THE PERSIAN GULF. IT’S PREDOMINANTLY IN THE UNITED STATES AS WELL. OCCI, OF COURSE, BOUGHT ANADARKO NOT LONG AGO AND AS A RESULT OF THAT DEAL TOOK A HIT, TRADING AT ITS LOWEST LEVELS IN ABOUT A DECADE WITH A DIVIDEND YIELD OF 7% WHICH WE THINK IS VERY SAFE. THAT’S, BY THE WAY, THREE TIMES THE DIVIDEND YIELD OF THE S&P 500. NOW, ON THE SMALL CAP SIDE, CALIFORNIA RESOURCES, CRC, THAT’S A HIGH — LIZ: IT’S DOWN 13%. DEFINITELY CHEAPER TODAY.>>DOUBLE-DIGIT MOVES ON DAYS LIKE TODAY. LIZ: GREAT TO SEE BOTH OF YOU, WE APPRECIATE YOUR EXPERTISE IN ALL OF THIS, AND I AGREE WITH

Oil prices soar after drone attack on Saudi facility


FEDERAL RESERVE THIS WEEK. JOIN ME RIGHT NOW IS U.S. STRATEGIC ADVISOR BRETT, AND FROM PRICE FUTURES GROUP PHIL FLYNN, AND LET ME KICK IT OFF WITH UH-UH YOU GIVE US A SENSE OF THE OIL MARKET THIS MORNING WE’VE SEEN PRICES UP ALMOST 9% RIGHT NOW.>>YEAH A LOT OF TRADERS WERE IN SHOCK THIS WEEKEND YOU KNOW THERE WAS HAD ASSUMPTION, OF COURSE, THAT THIS TOO OF THING WOULDN’T HAPPEN WE WERE IN A NEW ERA AND WE REALLY DIDN’T HAVE TO WORRY ABOUT ABOUT OIL PRICE SHOCKS ANYMORE. AND I GO TO YOUR POINT YOU’RE ABSOLUTELY RIGHT THE UNITED STATES BEING THE BIGGEST PRODUCER IN THE WORLD IS REALLY SOFTEN THE BLOW E. BUT IT HAPPENED TOTAL REMOVE THE RISK. AND THE BIGST CONCERN I THINK FOR OIL MARKET RIGHT NOW IS NOT ONLY HOW QUICKLY THE SAUDIS CAN GET PRODUCTION BACK ONLINE BUT HOW CAN THEY STOP AN ATTACK IN THE FUTURE? THAT’S THE KEY THING HERE. LISTEN, WE HAVE KNOWN THAT THE REBELS HAVE BEEN ATTACKING FOR SOME TIME HOW DID THIS HAPPEN? AND CAN IT HAPPEN AGAIN?>>BRETT WHAT DO YOU SAY TO THIS CAN IT HAPPEN AGAIN AND ALSO THE FACT THAT IRANIANS ARE PUSHING TO SAY THIS WAS NOT THEN AND WHO IS TAKING RESPONSIBLE NO COMMENT ON THE FACT THAT IRAN ENCOURAGES THE REBELS.>>WELL, THERE’S NO DOUBT IN MY MIND THAT IS THE IRANIANS THEY HAVE EVERYTHING TO GAIN FROM THE SPIKE IN OIL PRICES THEY NEED OIL L OVER 100 DOLLARSES BARREL TO FUEL THEIR ECONOMY SO IT IS CLEARLY — YOU KNOW, THE IRANIANS IN THIS CASE. BUT THE ATTACKS WHICH YOU LOOK AT THIS REALLY CLOSELY, IT IS ONE OF THE DEEPEST ATTACKS WITHIN SAUDI TERRITORY FROM — WITH THIS TYPE OF DRONE STRICK AND BECAUSE OF THE CONFLICT WITHIN YEMEN AND SAUDI ARABIA YOU IMMEDIATELY POINT TO THEM AND ASSUME THAT THE DRONES ORIGINATED FROM INSIDE YEMEN. BUT AS DRONE EXPERT I LOOK AT THIS I STAY HOW IS THIS EVEN POSSIBLE? VEALED HAVE REACHED A DISTANCE OF ALMOST 800 KILOMETER TO OIL FIELD WHERE THEY HAVE THEIR PRIME TERRITORY AND THAT TAKES SIGNIFICANT LEVEL OF SOPHISTICATION TO DO THAT AND WE CAN DID THAT WITH SATELLITES AND RAY LAY SYSTEM AND PHYSICAL RELAYS IN DIFFERENT COUNTRIES THAT ALLOW US TO PUMP OUT THESE LIVE STREAM VIDEOS TO DO THAT FOR A REBEL GROUP IT TAKES INCREDIBLE LEVEL OF SOPHISTICATION THAT’S WHY I BELIEVE THESE ATTACKS IN ORIGINATING IN LIKELY IN IRAQ, AND WE PROBABLY HAVE VERY STRONG EVIDENCE INDICATING THAT THE IRANIANS MAY HAVE EVEN BEEN ONES TO PLY IT.>>WOW. ALL WEEKENDS I LOOKING AT RESEARCH REPORT FROM WALL STREET ANALYSTS THERE’S A LOT OF ACTIVITY OVER THE WEEKEND AS ANALYSTS WERE WRITING UP WHAT THEY THOUGHT THE IMPACT COULD BE BEFORE MONDAY MORNING OPENING FOR THE MARKETS. PRESIDENT TRUMP TWEETED ON THE ATTACKS AS WELL AND HE WROTE THIS. YESTERDAY — SAUDI ARABIA OIL SUPPLY WAS ATTACK AD THERE’S REASON TO BELIEVE THAT WE KNOW CULPRIT OUR LOCK AND LOADED DPEPGDING ON VERIFICATION BUT WAITING TO HEAR FROM KINGDOM HAS TO WHO THEY BELIEVE WAS THE CAUSE OF THIS ATTACK AND UNDER WHAT TERM WE WOULD PROCEED. BRETT, WHAT — SHOULD THE U.S. DO AT THIS POUPT ARE YOU EXPECTING A REACTION FROM THE U.S. A MILITARY REACTION?>>I THINK THAT THERE’S A POSSIBLE THAT THERE COULD BE SOME SORT OF MILITARY ACTION TO TAKE PLACE IF YOU LOOK AT IN LAST FEW WEEK WE SAW A STRIKE BY THE ISRAELIS ON IRANIAN BASED INSIDE IRAQ THAT WAS PREPARING TO SENDING DRONESES TO STRIKE SOME SORT OF ISRAELI ACCESS AND THEY STOP THAT BEFORE HAND. I THINK THAT WHAT WE’RE SEEING MANY THIS CASE IS THAT WE HAVE CLEAR EVIDENCE THERE’S RAN I CAN BASE FROM WHERE DRONES ORIGINATED BUT I WANT TO TALK QUICKLY HOW TO STOP ATTACKS IN THE FUTURE BUT WE HAVE ABILITY RIGHT NOW THE TECHNOLOGY EXIST TO BE ABLE TO HIJACK THE CONTROLS OF A DRONE TAKE OVER A DRONE REMOTELY AND LAND IT FAITHFULLY THIS WAS NOT — THIS WAS SOPHISTICATED TECHNOLOGY NOT CLASSIFIED TOP SECRET TECH WE’RE TALKING ABOUT. THESE OIL FACILITIES SHOULD BE INSTALLING THIS COUNTERDRONE TECHNOLOGY THAT IS ABLE TO STOP THESE ATTACKS CREATE THESE VIRTUAL BARRIERS THAT CAN JAM THE SIGNALS OF THE DRONES SO THAT THESE CRITICAL FACILITIES DON’T HAVE TO DEAL WITH THIS PROBLEM IN THE FUTURE. SMG AIMING TO RESTORE A THIRD OF LOST OIL OUTPUT TODAY. THAT’S ACCORDING TO “THE WALL STREET JOURNAL,” I WANT TO I WANT OUT LINDSAY GRANDMA’S TWEET YESTERDAY BEFORE YOU ANSWER, ON SAUDI TRYING TO — TRYING TO FILL UP WHAT HAS BEEN LOST, LINDSEY GRAHAM TWEETED THIS. IT IS NOW TIME FOR THE U.S. TO PUT ON THE TABLE AND ATTACK ON IRANIAN OIL REFINERIES THEY CONTINUE THEIR PROVOCATIONS OR INCREASE NEW CLEAR ENRICHMENT.>>I THINK THAT’S A POSSIBILITY. IT’S SENDING IRANIAN A QUICK MESSAGE, IT WILL HAVE A MAJOR IMPACT ON THE GLOBAL ECONOMY AND OIL PRICES IF THAT HAPPENS. BECAUSE WE “DON’T ASK, DON’T DON BECAUSE WE “DON’T ASK, DON’T DOT BECAUSE WE “DON’T ASK, DON’T DOK BECAUSE WE “DON’T ASK, DON’T DOO BECAUSE WE “DON’T ASK, DON’T DOW BECAUSE WE “DON’T ASK, DON’T DOA BECAUSE WE “DON’T ASK, DON’T DOT BECAUSE WE “DON’T ASK, DON’T DOW BECAUSE WE “DON’T ASK, DON’T DOL HAPPEN AFTER THAT BUT A HIGH RISK SITUATION. I WILL SAY THIS PRESIDENT TRUMP IS VERY GOOD AT TRYING TO CALM OIL PRICES. RIGHT AS MARKET WAS OPENING IN THE HE CAME OUT WITH A TWEET TO RELEASE OIL FROM A RESERVE AND E REMINDING PEOPLE THERE’S PLENTY OF OIL OUT THERE SO DON’T WORRY.>>THAT’S WHAT HE SAID IN THE TWEET DAGEN PLENTY OF OIL EXPLAY NATION POINT.>>THERE’S A CONCERN ABOUT BEING A TOIBL RAMP UP PRODUCTION PARTICULARLY HERE IN THE U.S. IN THE BASIN AND SHALE FORMATIONS THAT I KNOW THAT THEY I THINK THE U.S. RIG COUNT IS DOWN TO A 17-MONTH LOW DOWN 16.FROM A YEAR AGO. ACCORDING TO BAGGER HUGHES AND IT IS NOT THAT EASY TO RAMP UP THAT PRODUCTION HERE IN THE U.S. THEY HAVE LAID OFF EMPLOYEE AND TAKE WEEKS TO PUT THIS BACK ONLINE THEY HAVE A LOT OF DRILL BUT UNCOMPLETED WEALTH THAT THEY CAN TRY TO BRING ON QUICKLY BUT THEN YOU HAVE ISSUES OF TRANSPORTATION, TRYING TO GET IN ONLINE AND WE’RE ALREADY PEX PORTING A RECORD ALL OF OIL SO IT IS HARD TO INCREASE THAT.>>ALL RIGHT GREAT CONVERSATION GUYS WE’RE WAVING MOVE THAT IS —

Trump’s exit from the Iran nuclear deal


president Trump pulled the plug on the nuclear deal with Iran on May 8th and claimed that Tehran had failed to comply with the obligations yet since no tangible evidence was presented the unilateral decision places Washington in violation of its obligations under the pact but regardless of who is right the turn of events raises a lot of questions and it remains to be seen what comes next my name is Sherwin and welcome to Caspian report the joint comprehensive plan of action was a diplomatic initiative that involved Iran the United States the United Kingdom France China Russia plus Germany the group of countries known as the p5 plus one reached an agreement in Vienna in July 2015 that restricted Tehran’s nuclear program in return the international community lifted some of the sanctions that were placed on Iran since its ratification of the International Atomic Energy Agency which is the foremost authority on the topic has consistently verified that Iran has largely complied with the terms of the deal yet regardless of its functionality Trump has repeatedly expressed his grief with the agreement more specifically the Trump government has identified four aspects it would like to see included or adjusted in the nuclear deal these include Iran’s ballistic missiles program its regional activities the inspections regime and these sunset provisions which allow certain legal items to expire over time however the nuclear deal was specifically designed to restrict Iran’s nuclear program and in this context it functioned adequately but the deal was never meant to address non-nuclear proliferation issues thus including or adjusting non-nuclear provisions within the current framework is not a feasible endeavor nor is it something the international community looks forward to nonetheless the Trump government considered the non-nuclear shortcomings as a deal-breaker and announced the exit from the pact what’s more is that in his announcement Trump stated plans to reimpose all suspended sanctions on Iran these include penalties to curb down Iranian energy exports by targeting the central bank in Tehran as well as the hundreds of banks that deal in finances insurances banking and precious metals in addition the sanctions would place noteworthy Iranian policymakers on the Block persons list now the most likely way for Trump to reimpose sanctions on Iran is to go through the illegal channels that administer and enforce economic sanctions this task falls under the jurisdiction of the Office of Foreign Assets Control of the US Department of Treasury however their protocols explicitly note that imposing sanctions can only take force after a period of 90 to 180 days much of the process depends on the unprecedented legal interpretations and the country in question so somewhere along those timeframes Washington will be able to reinstate the sanctions on Iran thus far the international community has responded to Trump’s decision with mixed feelings British French and German policymakers made a last-ditch effort to change the attitude of their American counterpart but ultimately failed as such immediately following Trump’s statement top officials of the European Union responded by saying that the u.s. president does not have the power to unilaterally scrap the multilateral agreement officials from China and Russia reacted in similar ways and noted that they remain committed to the nuclear pact including the provision for sanctions relief for the Islamic Republic of Iran meaning the members of the agreement reject Trump’s decision but once the US sanctions are in place any firm that wants to do business with Iran will immediately be subject to u.s. secondary sanctions which will cut them off from the US banking system so if Washington reinstates sanction and the Europeans Russia and China want to remain true to the terms of the nuclear deal they will have to resort to non dollar measures and pass such legislations to protect their companies this would reduce the extent US sanctions can affect Iranian energy exports for instance if the European Union rejects the put in place a full embargo on Iranian oil imports then Tehran stands to lose between half a million and a million barrels of crude oil per day of the total 2.5 million exported barrels per day even though this is a significant number it will not fundamentally alter the economic prospects of Iran in this context president rouhani of Iran has called for restraint and said that his country remains committed to the pact and as long as the Europeans remain true to the agreement as well it would be in Iran’s interest to abide by the nuclear terms doing otherwise would irreversibly damage Tehran’s relationship with the European Union however the commitment of the Europeans to the nuclear agreement is dubious at best they are simply unlikely to risk upsetting the United States as such despite the current defiance the Europeans are most likely to comply with certain US sanctions eventually Russia and China on the other hand have proven to be willing to take greater risks Moscow has closed security ties to Tehran especially in the Syrian battle space while Beijing is the largest importer of Iranian crude oil followed closely by New Delhi Russia China and India also closely cooperate with Tehran in their respective grand economic policies some examples include the Indian Russian transport corridor and the Chinese belt and road initiative both of which involve Iran what’s more is that New Delhi and Beijing also rely on their access to Iranian energy for the development of their respective heavy industries in short while Europe is likely to comply with US sanctions Moscow Beijing New Delhi on the other hand we’ll be important partners for tayden to navigate the sanctions environment in the coming months rouhani is likely to seek for greater international support to push against Trump before the u.s. reinstates economic sanctions for rouhani the political well-being of his moderate faction depends on the ongoing economic reforms which are tied to the survival of the nuclear deal at the start of 2018 protests erupted across Iran with many citizens complaining that the nuclear agreement had failed to provide the country with tangible economic benefits in addition Iranian conservatives are likely to exploit the weakened position of the ruling party the Conservatives believe that the rouhani’s failure to reform the economy will allow them to dominate Iran’s political landscape once again this explains why some conservative members actually celebrated Trump’s decision by chanting death to America in the iranian parliament so Trump’s exit from the nuclear deal will further complicate the internal political balance in theta another faction that welcomed to Trump’s decision is the government of Prime Minister Netanyahu the Israelis are in a proxy conflict with their Iranian counterparts the two sides have been in a war of words for some time but much of it was restricted to publicity stunts because the distance between the two was too far for a real conflict that element is now changing the current Iranian Israeli proxy conflict is taking place in the Syrian battle space with the former trying to carve a direct land corridor through its proxy Hezbollah in Lebanon Israeli intelligence estimates that Hezbollah has roughly 150,000 rockets and missiles of all sizes in its possession of which thousands can reach tel-aviv as such Hezbollah is Israel’s most imminent threat should Iran succeed in creating a direct corridor to Hezbollah Tehran would be able to swiftly reinforce and strengthen the position of its proxy in Lebanon as well as create a second front by the Golan Heights currently both sites are targeting one another topic rockets artillery and air strikes however as Israel and Iran act to preserve their credibility their responses and counter responses are likely to get stronger over time this cycle of violence requires only one miscalculation for a dramatic escalation this is not a position that the Israeli leadership wants to be in especially not on its own Israel needs the United States in the proxy conflict against Iran and the collapse of the nuclear deal helps to bring Washington into the fight in the long term Trump’s withdrawal from the nuclear deal raises questions that affect the geopolitical standing of the United States how can other nations trust the government in Washington to abide by its commitments when political winds change this is particularly important considering the nuclear negotiations with North Korea morover if the deal collapses altogether the government in Tehran will be free to expand its nuclear program as it was doing so until 2013 designing a fresh nuclear accord with a resurgent Iran will be even more complicated than it was in the past for all practical purposes the collapse of the Iran nuclear deal opens Pandora’s box before long the Americans could face a new geopolitical dilemma with only two options Washington could either allow Tehran to continue its nuclear program in absence of international monitoring or the Americans could try and use forceful means to stop it neither options have particularly favorable outcomes I’ve been your host Sheeran from Caspian report credit goes to our contributors on patreon for making this report possible our crowdfunding platform allows us to remain independent and self sustained from sponsors visit patreon.com slash Caspian report for more information for now thank you for watching and soul

NYT drops oil conference sponsorship amid pressure from activists


DAVID: CRITICS CALLING OUT THE GREY LADY FOR CAVING INTO PRESSURE ONCE AGAIN, THE NEW YORK TIMES DROPPING ITS LONG TIME SPONSORSHIP OF AN OIL INDUSTRY CONFERENCE, THIS AMID AN OUTCRY FROM THE FAR LEFT 70 CRIME AT ACTIVISTS WERE RECENTLY ARRESTED DURING A PROTEST OUTSIDE THE PAPER’S HEADQUARTERS AND THE TIMES RELEASING A STATEMENT SAYING, “THE SUBJECT MATTER OF THE OIL AND MONEY CONFERENCE GIVES US CAUSE FOR CONCERN. WE WANT THERE TO BE NO QUESTION OF OUR INDEPENDENCE OR EVEN THE POTENTIAL APPEARANCE OF A CONFLICT OF INTEREST.” WELL THE TIMES HAS PARTIALLY SPONSORED THE OIL AND MONEY CONFERENCE SINCE IT STARTED BACK IN 1980 SO IS THIS REALLY ABOUT A CONFLICT OF INTEREST?>> YEAH, I ACTUALLY THINK IT IS DAVID AND FIRST OF ALL I WANT TO APOLOGIZE TO MY VERY GOOD FRIEND CHRISTINA FOR CALLING HER KATRINA THIS LAST SEGMENT. DAVID: WE WERE TALKING ABOUT HURRICANES, YOU KNOW?>> THAT’S RIGHT, I’VE GOTTEN ALL KINDS OF TEXTS FROM CHRISTINA AND SEVERAL OTHERS DURING THE BREAK ABOUT THAT SO I APOLOGIZE, BUT I LOOK, I ACTUALLY THINK THIS IS A GOOD IDEA BY THE NEW YORK TIMES. I DON’T THINK IT’S NECESSARILY CAVING INTO THE LEFT. I THINK IT’S A VERY POLARIZING TOPIC AND WHEN YOU HAVE A CHANCE TO NOT BE IN A POLARIZING TOPICS A THE NEW YORK TIMES DOES NOT WANT TO BE AND 50% OF THE COUNTRY HATES YOU FOR THIS, 50% LOVES YOU. TO ME THERE’S NO REASON TO DO THIS IT WAS JUST A BUSINESS DECISION.>> I HEAR WHAT YOU’RE SAYING BUT I’D SAY THEY SHOULDN’T BE SPONSORING ANY CONFERENCES AT ALL AS A RESULT OF IT. WHY SPONSOR IT SINCE 1980 AND JUST PULL OUT OF IT RIGHT NOW AND THE FLIP SIDE OF THIS ARGUMENT IS THE TIMES THERE WERE A LOT OF STORIES EXTENSIVE COVERAGE ABOUT CLIMATE CHANGE THIS PARTICULAR CONFERENCE I’M WELL AWARE IS REALLY A LEADING OIL & GAS CONFERENCE IN TERMS OF THE CEO’S THAT IT BRINGS THE CONVERSATIONS IT BRINGS. YOU CAN’T IGNORE A WHOLE SEGMENT OF INDUSTRY. THAT WOULDN’T BE FAIR EITHER.>> I DON’T THINK THEY ARE NECESSARILY IGNORING IT. THEY AREN’T PUTTING THEIR MONEY AND NAME BEHIND IT. THEY MAY STILL REPORT ON IT WHICH I THINK IS VALUED ESPECIALLY WHEN WE TALK ABOUT JOURNALISM BUT IT RAISES THE WHOLE QUESTION ETHICALLY. THEY SHOULDN’T BE SPONSORING IT.>> EXACTLY.>> THEY REALLY SHOULDN’T. UNLESS THEY PREFACE IT AND WHEN THEY ARE COVERING IT LIKE EVERY TIME THEY COVER IT AS A REPORTER THEY HAVE TO PREFACE HEY WE PUT X AMOUNT OF MONEY BEHIND IT. JUST LIKE WE DISCLOSE WHEN WE HOLD STOCKS. DAVID: JONATHAN?>> CHRISTINA WOULD BE COOL WITH THE NEW YORK TIMES SPONSORING A GREEN ENERGY CONFERENCE OR LOOK –>> THE WHOLE THING THAT JACKIE IS TALKING ABOUT NOW IS NO SPONSORSHIP BECAUSE THERE’S SUPPOSED TO BE A NEWS ORGANIZATION COVERING THE NEWS. DAVID: BUT IT’S A FAIR QUESTION WOULD YOU BE AGAINST THAT AS WELL?>> YEAH. DAVID: THERE’S AN ANSWER, JONATHAN.>> I’M NOT SURPRISED THAT THEY DON’T WANT TO SPONSOR OIL & GAS CONFERENCE BECAUSE OIL & GAS, UNFORTUNATELY, ISN’T VERY POPULAR RIGHT NOW AND IT’S A SHAME BECAUSE THESE BIG COMPANIES, I DON’T KNOW IF THEY DESERVE OUR SPONSORSHIP BUT THEY DESERVE OUR APPRECIATION. LOOK AROUND YOUR HOUSE RIGHT NOW ALMOST EVERYTHING IS MADE OF SOME TYPE OF OIL BY-PRODUCT. THESE ARE THE MARVEL INNOVATORS THAT PUSH MAN’S LIFE FORWARD, IN FACT LIFE HAS NEVER BEEN BETTER BUT IF YOU WANT TO HAVE NO CARBON FOOTPRINT GO BACK TO THE DARK AGES HAVE CANDLES.>> WOW THAT IS SUCH AN OVER EXAGGERATION. YOU KNOW, WE DISAGREE MANY TIMES I AGREE OIL HAS REVOLUTIONIZED THE WAY THE ECONOMY, AMERICA, THE REST OF THE GLOBE WORKED BUT WE IMMEDIATE TO STEP FORWARD. WE NEED TO STEP FORWARD AND START EVOLVING THINK OF CLEAN ENERGY, I WAS LOOKING AT LOCKHEED MARTIN TODAY THEY HAVE A NUCLEAR FUSION THING THEY’RE WORKING ON I’M NOT EVEN SAYING IT PROPERLY BUT THERE IS SO MANY STEPS WE CAN MAKE IN THE FUTURE AND I THINK THAT YOU NEGATING THAT IS NOT THE BEST.>> YOU MENTIONED NUCLEAR FUSION THE IRONY IS THEY ARE THE ONES AGAINST NUCLEAR ENERGY WHICH THEY ARE AGAINST EVERYTHING THAT WORKS. DAVID: AND THERE’S ONE PROBLEM WITH THEIR EXPLANATION THAT COMES ON THE HEELS OF THEM CHANGING TWO STORIES BECAUSE OF PROTESTS. I MEAN, AGAIN, THE QUESTION IS OBJECTIVITY DOES ANY OF THIS

Chevy LS Engine Parts Swap Conversion Install Overview How-To Tutorial Performance Chevrolet Car


Announcer: Brought to you by JEGS. [music] Chase: LS swaps have been taking place all
over the nation for well on a decade, and for good reason. They’re lightweight, fuel-efficient, easy
to work on, and they make great power with relatively few modifications. Over the years, we’ve had a lot of the LS
vehicles come through our shop, like this 1955 Chevrolet, and now, thanks in large part
to a huge aftermarket offering, swapping an LS between the fenders of your favorite muscle
car is now easier than ever. Whether you picked up an LS from the junkyard
or you’re starting out with a brand new crate engine, there are many solutions out there
to help you bolt that block to your favorite chassis. In order to help you through your own swap,
we’ve teamed up with the guys over at JEGS to show you a few of the components that you’ll
need. The first thing to consider when swapping
an LS into a vehicle is how it’s going to bolt to the chassis. Rest assured that there’s a vendor out there
that makes engine and transmission mounts and crossmembers for virtually any application. Another important item to consider when planning
for your LS swap are the headers. Take these Hooker LS Swap Headers, for example. They’re available in a 1 3/4-inch primary,
and they’re available from everything from a ’67 to ’81 F-body to a Nissan 240SX and
the S13 or S14 chassis. The final consideration when swapping an LS
into any car is the oil pan. This pan from Chevrolet Performance allows
you to swap in almost any LS application into your favorite muscle car. When it comes to mounting your pre-1997 transmission
to your new LS motor, there’s a couple of different options you have. The first option is to get a custom torque
converter. The second, and probably easier, option is
to use one of these, which is an adapter ring which pushes your flywheel out closer to your
transmission. This will work with all TH400, 350, and 700R4
transmissions and the bellhousings will as well, as they don’t require an adapter to
bolt to an LS engine. A modern engine requires modern cooling, and
specifically the LS requires the inlet and outlet on the radiator to be on the same side. There are several ways to accommodate this,
but the easiest way is with a kit like this from Be Cool, which comes with all the fan
shrouds, hoses, and everything you need to accommodate your new LS engine. When it comes to controlling the throttle
on your LS, you have a couple of different choices. You’ve got either a cable-driven throttle
body or a drive-by-wire throttle body, and if your wiring harness is set up for a drive-by-wire
throttle body, the simpler solution might be to just add a pedal position sensor, which
will alleviate a lot of headaches in the long run. Wiring a modern LS can arguably be the most
daunting point of any project, but a lot of aftermarket companies provide a complete solution,
like this kit from Chevrolet Performance, which allows you to swap an LS into virtually
any application. For those of you that want the modern capabilities
of the LS engine, but want the old-school look and feel of a carbureted application,
Holley provides these kits, which have come with an intake manifold that will swap onto
an LS engine, as well as a controller that still will allow you to run coil-near-plug
as well as all of the refinements of an LS system. When it comes to feeding your new LS engine,
there’s only a handful of options. You can either take the stock fuel pump and
retrofit it into your current tank, you can order a new custom tank that has a GM fuel
system assembly in it, or you can mount an external fuel pump. Once you have your high-pressure fuel source
figured out, it’s time to think about engine management. What we’ve got here is the MSD Atomic EFI
for the LS engine. This Atomic EFI LS Master Kit comes with what
you need to either do a return or a returnless fuel system, and it also has a control unit
and wiring harness built right into the fuel rails. It also comes with a tuning unit that allows
you to select whether you want a cable-driven throttle body or a drive-by-wire throttle
body, eliminating the necessity to re-tune the computer or eliminate pigtails on the
wiring harness. One of the things that makes this really cool
is the controller will allow you to compensate for cams, nitrous, power-adder applications,
all without extensive tuning knowledge, and directly from this box. Another thing to consider when planning your
LS swap is the air intake system. There are many vendors out there that provide
application-specific kits, or you can get universal pieces, like this one from Spectre,
that comes with the mass air flow sensor port all ready to go. One of the final things to consider before
cranking up your LS is the front accessory drive system. Now, you’re gonna wanna take careful measurements
and make sure that they’re not interfering with sheet metal or frame rails, but with
kits like these from Chevrolet Performance, it’s a pretty straightforward process. These kits from Chevrolet Performance come
with everything you need, including an alternator, A/C pump if you choose, and the power steering
pump. As you can see here, the aftermarket has come
up with a solution to virtually any problem you can run into while doing an LS swap. We’ve only scratched the surface here, and
hopefully we’ve provided you with some inspiration to start your own swap. Announcer: Brought to you by JEGS. Fast delivery. Your source for high performance and quality,
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Milton Friedman – Big Business, Big Government


yes sir dr. Freeman we recently had a guest convocation speaker in the name of Jane Fonda who spoke to a overcapacity and I might say enthusiastic crowd regarding the fear of big government big business in influencing government decisions and running the world virtually and I would say that she influenced a lot of people here and although her speech might have been alarmist there seem to be quite a bit of credible credibility to it could you have some comment as far as what you feel sure there’s a great deal of merit in the position she was taking one of the reasons you must distinguish sharply between ping pro free enterprise which I am and being pro-business which I am NOT those are two different things the reason I am Pro free enterprise the reason I am for a free market on a political level is primarily because I believe the problem in this world is to avoid a concentration of power to have a dispersal of power that unless we have a dispersal of power we will not be able to maintain a free society now Jane Fonda is right that if we have a system under which government is in a position to give large and does give large favors it’s human nature for people to try to get those favors whether those people are large enterprises such as the oil industry or the automobile industry or the steel industry or whether they are small people like the farmers who are driving tractors around Washington or whether they are representatives of other special groups and in my opinion the only way you can prevent that and make sure that businesses operate in the public interest is to is to force them to engage in competition one with the other so that she is right insofar as she says there is a great danger of having large small and in between corporations exert undue influence on government where people like Jane fun to go wrong is it not recognizing what the answer is they think that the cure to big government is to have bigger government except with them running it instead of people in our own but in my opinion the only effective cure is to reduce the scope of government to get government out of the business if government is prohibited from engaging in activities which can benefit special groups in those special groups will not have any incentive to go to Washington for example to dream an ideal suppose we could have a constitutional amendment prohibiting Congress from making any laws imposing tariffs well there would be a lot law a lot of lobbyists in Washington who would lose their jobs overnight that would reduce the incentive for corporations to try to affect government and similarly down the line so we must separate diagnosis and problem from cure and I believe that that’s the area in which she is likely to mislead the public I want to say one more thing if you’ve got a choice between big government and big business there’s one important difference no big business whether it be General Motors or US Steel or any other can get $1 from you unless you voluntarily pay it off and think you’re getting your dollars worth in return General Motors cannot send a policeman to take money out of your pocket it can only get money from you in so far as it can produce a product that you think worth buying it may indirectly get money out of your pocket by operating on government to impose tariffs on foreign cars that’s why we want to do that but in the market no business however they can get money from you except by providing you with something you value in return that’s hardly the case with government big government can send a policeman to and take money out of your pocket whether you believe you’re getting your money’s worth or not that’s an enormous difference it’s a difference between freedom and coercion and it’s a difference that we can only maintain if we keep down the size and scope in role of government thank you you

Iranian oil tensions may lead to increased volatility


COMES IN THE HEELS OF ESCALATING TENSIONS WHEN IRAN AND THE WEST. STEVEN, GOOD TO SEE YOU, THANK YOU SO MUCH FOR BEING HERE THIS MORNING.>>GREAT TO BE HERE, MARIA. THANK YOU. MARIA: ALL OF THE ABOVE HAS HAD IMPACT ON OIL, I THINK, HOW WOULD YOU ASSESS THE SITUATION AND IMPACT ON THE PRICE?>>WELL, ONCE AGAIN IRANIANS ARE PLAYING THE WAY THEY ALWAYS DO, THE IRANIANS ARE SOME OF THE BEST TRADE NESTER THE WORLD, SO I GUESS AS YOU POINTED OUT THAT THE BRITISH DID SEIZE VESSEL ON SUSPICION IT WAS GOING TO SYRIA IN VIOLATION OF EU SANCTIONS, THIS IS THE CARD THAT THE UNITED STATES TRIED TO PLAY AND FAILED, THE IRANIANS I GUESS PINKY SWEARED THAT THE OIL WAS NOT GOING TO SYRIA AND THEY BELIEVED THEM, GOD BLESS, WE WILL SEE. THE OIL IS BEING FREED, THE BEST PART OF THIS AS FAR AS OIL MARKET IS CONCERNED IS WE HAVE HAD THIS PRICED INTO THE MARKET AS WELL, SO THE NEXT SHOE TO DROP IS ACTUALLY — ACTUALLY GO TO GREECE, WHERE DOES THE OIL ULTIMATELY END UP. THE STORY IS NOT CLOSED BUT WE’VE HAD A PEACEFUL RESOLUTION AND THAT’S A GOOD THING FOR OIL MARKET’S STABILITY.>>STEVEN, DO YOU THINK THIS EASES TENSION IN THE PERSIAN GULF, DO YOU THINK IRAN WILL BEHAVE BETTER AFTER RELEASING THE BRITISH SHIP?>>ABSOLUTELY NOT. IF ANYTHING WHAT IRANIANS HAVE DEMONSTRATED THIS WILL EMBOLDEN THE IRANIANS. WE HAVE SEEN NOTHING MORE THAN IRANIANS STEP UP AND TAKE MORE AGGRESSIVE STANCE IN THE GOLF, PRETTY MUCH EXPOSED THEIR DESIGN ON THE REGION, SO NO, THIS WILL FURTHER INFLAME BECAUSE, OF COURSE, SAUDI ARABIA IS WATCHING THIS DEVELOPMENT AND THOSE ARE THEIR TWO BIGGEST POWERS GOING AT IT. SO, NO, ONLY EMBOLDENS IRANIANS AND IRANIANS DEMONSTRATED WILLINGNESS TO PARLAY THIS, SO NO, I WOULD THINK THAT THIS WOULD LEAD TO DOWN THE ROAD

Polish Prime Minister wants Tesla’s Elon Musk to invest in Poland


MIXED BAG FOR THE DOW STOCKS THIS MORNING. OUR NEXT GUEST SAYS HE RECENTLY SPOKE WITH TESLA’S ELON MUSK ABOUT DOING BUSINESS IN HIS COUNTRY. JOINING US NOW IS THE PRIME MINISTER OF POLAND. MATEUSZ MORAWIECKI. I HOPE I GOT THAT RIGHT. WILL YOU GIVE ME THAT? WELCOME TO THE PROGRAM.>>THANK YOU. STUART: HONOR TO HAVE YOU WITH US. THAT’S A FACT.>>THANK YOU. STUART: YOU SPOKE WITH ELON MUSK, YOU WAN HIM TO INVEST IN POLAND, BUILD A FACTORY THIS, WHAT TAX BREAKS ARE YOU OFFERING WITH HIM? HE HAS DONE WELL WITH TAX BREAKS IN AMERICA?>>WE HAVE GOOD ENVIRONMENT FOR BUSINESS IN POLAND. WE RECENTLY UPGRADED TO DEVELOPED ECONOMY AND AT THE SAME TIME MANY FEATURES OF OUR ECONOMY ARE STILL LIKE IN DEVELOPING ECONOMIES LIKE VERY VIBRANT SHUMPER TYPE LABOR FORCE. STUART: YOU’RE OFFERING HIM AN ECONOMY PRIMED FOR THAT KIND OF –>>YES. STUART: ARE YOU OFFERING MORE ON TOP OF THAT, TAX BREAKS? ARE YOU GIVING HIM A TAX HOLIDAY, FOR EXAMPLE?>>FIRST OF ALL WITHIN THE EUROPEAN UNION WE HAVE QUITE A HARMONIZED POLICY WHAT WE CAN OFFER TO INVESTORS, BUT ON TOP OF THIS WE CAN OFFER A LITTLE BIT MORE. WHY WE’RE SO SUCCESSFUL ELIMINATING UNEMPLOYMENT IN THE POLAND OVER THE LAST FOUR YEARS. STUART: WHAT EXTRA, OVER AND ABOVE WHAT THE EU WILL ALLOW? WHAT EXTRA ARE YOU OFFERING TO HIM?>>OFFERING MONEY TO RETRAIN PEOPLE, TO EMPLOY PEOPLE, SOME TAX RELIEF IN TERMS OF PROPERTY TAX AND ALSO WE’RE OFFERING VERY GOOD ENVIRONMENT. WE HAVE INVESTED A LOT IN ELECTRIC MOBILITY, ELECTRIC CARS, CLEAN BUSES, CLEAN TRAINS, ARTIFICIAL INTELLIGENCE. THIS IS ALL WHAT SUCH AN INDUSTRY NEEDS. THIS IS WHY LOTS OF INVESTORS FROM ALL OVER THE WORLD LIKE — ARE VERY MUCH INTERESTED IN ELECTRIC MOBILITY. STUART: WHAT YOU’RE TALKING ABOUT IS LARGELY MANUFACTURING COMPANIES GOING TO POLAND.>>SOFTWARE DEVELOPMENT. WE’RE BECOMING A SILICON VALLEY OF THE EUROPEAN UNION. STUART: ARE YOU?>>RECENT WORLD CUP IN GROUP PROGRAMING IN TOP SIX THERE WERE TWO POLISH UNIVERSITIES. STUART: REALLY?>>YEAH. AHEAD OF MANY AMERICAN UNIVERSITIES. STUART: WE ALWAYS THOUGHT THE HUNGARIANS NEXT DOOR WERE THE GREATEST SOFTWARE PROGRAMMERS IN EUROPE.>>THEY ENVY US. STUART: THEY ENVY YOU?>>ABSOLUTELY. STUART: A TOP HUNGARIAN DIPLOMAT, THAT HE, HUNGARY, VERY CONFIDENT, VERY HAPPEN WITH PRESIDENT TRUMP AND HIS DEMAND EUROPE SPEND A LOT MORE ON DEFENSE. HE SAID THAT. ARE YOU COMFORTABLE WITH THAT STATEMENT? DO YOU WANT –>>WE ARE MORE THAN COMFORTABLE BECAUSE WE ARE ONE OF THE VERY FEW COUNTRIES OF NATO WHICH ALREADY SPENT 2%, PERCENTAGE POINTS OF GDP ON MILITARY EQUIPMENT. STUART: GERMANS WON’T. THE GERMANS WILL NOT SPENT MONEY.>>GERMANS SPENT 1 TO .23. BY THE WAY THEY WANT TO BUY RUSSIAN GAS AND PAYING FOR RUSSIAN GAS IS LIKE PAYING FOR MR. PUTIN’S WEAPONS. STUART: YOU’RE VERY MUCH AT ODDS WITH THE GERMANS.>>WE ARE VERY MUCH AT ODDS WITH REGARD TO IN TERMS OF TRADE, OUR TRADE WITH GERMANY IS VERY, WE HAVE LOTS OF JOINT VENTURES. STUART: YOU WANT TO BUY OUR NATURAL GAS, DON’T YOU?>>WE HAVE STARTED, WE HAVE STARTED TO HAVE SOME LONG TERM AGREEMENTS, 20 YEARS PLUS, AGREEMENTS WITH AMERICAN COMPANIES ON LNG GAS. WE HAVE BUILT VERY BIG TERMINAL IN — DIFFICULT TO PRONOUNCE THIS. STUART: WAIT A SECOND.>>WE ARE IMPORTING AMERICAN GAS THROUGH THIS TERMINAL. STUART: THE RUSSIANS ARE NOT GOING TO BE HAPPY WITH THAT.>>THEY’RE NOT GOING TO BE HAPPY. STUART: ARE THE GERMANS HAPPY WITH THAT?>>GERMANS SHOULD BE HAPPY WITH THIS BUT, THEY ARE BUILDING THIS NORTH SEA, 55 BILLION CUBIC METERS OF CAPACITY OF IMPORTING GAS FROM RUSSIA. WE DON’T LIKE IT. WE, WE ARE EMPHASIZING THAT BUYING GAS FROM MR. PUTIN IS PAYING FOR HIS WEAPONS. SO THEY SHOULD CONTRIBUTE MORE TO NATO AS A WHOLE AND THEY SHOULD NOT BE BUYING SO MUCH GAS FROM RUSSIA. STUART: LAST ONE, SOME PEOPLE HAVE SAID THAT YOU ARE THE TRUMP OF EASTERN EUROPE OR ONE OF THE TRUMPS OF EASTERN EUROPE. ARE YOU COMFORTABLE WITH THAT?>>I DON’T THINK I — THERE IS SUCH A NOTION IS APPROPRIATE BUT ON THE OTHER HAND I VALUE A LOT THAT SOMEBODY IS ACTUALLY DOING WHAT HE BELIEVES IN, LIKE PRESIDENT TRUMP AND THIS IS NOT ONLY IN THE CONTEXT OF NATO AND COMPENSATETURES ON MILITARY WHICH WE SPOKE ABOUT, BUT ALSO FOR INSTANCE THE TRADE DEFICITS, TRADE SURPLUSES WITH CHINA. THE JOBS AROUND US. SO I THINK WE HAVE A VERY GOOD — STUART: MR. PRIME MINISTER, REAL

Lukoil: How to Become a Billionaire Russian Oligarch


In the aftermath of the Soviet Union’s demise,
Russia saw its wealth get concentrated into the hands of just a handful of businessmen. These oligarchs, known as the New Russians,
came to own over half of the Russian economy, including its vast oil industry. That’s why today we’ll learn exactly how
this transition happened, especially in the context of one of Russia’s biggest oil companies,
Lukoil. On Christmas Day in 1991, the president of
the USSR Mikhail Gorbachev announced on national television that he had resigned. The bigger shock of this announcement was
that Gorbachev would have no successor; instead, the Soviet Union would be dissolved. On the following day, the Russian flag was
flown over the Kremlin and Russian president Boris Yeltsin was now in power. His vision for the future of Russia was one
of drastic reforms; he wanted to transition Russia to a free market economy as fast as
possible. With funding from the Bush Senior administration
and the research from a Harvard University think tank, Yeltsin put the Russian economy
in shock therapy. He removed price and currency controls, lifted
barriers on international trade, but most importantly he privatized the country. Obviously in a free market economy you can’t
have the state running major industries, but Yeltsin didn’t have time to set up a proper
infrastructure for the transition. Instead, he opted for a very simple solution:
Every Russian citizen was issued a voucher that could be exchanged for shares in any
recently privatized business. The idea was for workers to convert their
vouchers for shares in the company they worked for, essentially getting regular people to
benefit from the success of their chosen industry. While the idea sounded good on paper, it was
extremely easy to abuse. Most Russians at the time had no concept of
capitalism or shares in a company. In fact, in the aftermath of 1991 people were
happy to even get their wages with just a few months delay. Now these vouchers were worth the equivalent
of about $30, which back then amounted to one month’s wage. So what happened in reality is that a vast
majority of people immediately sold their vouchers for cash, either to feed their families
or to buy otherwise lavish luxuries like a refrigerator. Very few Russians in 1991 were both educated
enough and rich enough to take advantage of the opportunity these vouchers presented,
and the ones that could ended up becoming very wealthy, often through rather dishonest
practices. The oil company Sibneft, for example, stopped
paying the salaries of its workers for several months in a row because supposedly it didn’t
have any money. But the owner of the company, Roman Abramovich,
was generous enough to offer to buy the shares of the few workers who were smart enough to
convert their vouchers instead of selling them. And just to be sure, some of the newly privatized
oil companies issued more shares to be sold privately in order to dilute the few stragglers
that remained. Of course, all of this was done through various
shell companies so that regular people didn’t know what was going on until it was too late. So let’s walk through the whole process
of becoming a billionaire Russian oligarch, using as an example Vagit Alekperov. He was born in the capital of present day
Azerbaijan. His father was an oil worker so he studied
engineering and eventually moved to work in Western Siberia, where large oil fields had
been discovered in the early 1960s. In 1983, he became director of oil production
in a town called Kogalym, where he dramatically boosted their output, from a few million barrels
a year in 1983, to 240 million seven years later. He did that by integrating the three branches
of the business – exploration, refining, and distribution, which under the Soviet system
were entirely separate. His performance caught the attention of Moscow,
and he was invited there to serve as deputy minister of oil and gas. Then he did what he knew best: integrating
the oil business, but on a much more massive scale. When he realized that the Soviet Union was
on its way out, he made great efforts to build up favor with Boris Yeltsin, who in return
granted Alekperov autonomy to consolidate the Russian oil business in the most profitable
part of the country. That’s how he created Lukoil, as a merger
of three big oil producers in the region. Now under the privatization scheme, the state
would keep one third of the shares, the workers would get a third through the voucher system,
and then the final third would be reserved for outside investment. Alekperov and the other oligarchs, of course,
quickly bought out the workers. They also got a chance to buyout the shares
held by the government, when Boris Yeltsin needed to raise money for his reelection campaign. Despite the consolidation though, Lukoil’s
production was still inefficient compared to Western oil companies due to its declining
Soviet-era equipment. So Lukoil struck a deal to sell 70,000 barrels
of oil per day to Chevron, and using the revenues as collateral for a $700 million loan from
a Japanese company. With new equipment, Lukoil soared to record
profitability, even in the midst of the oil crash of 1998. Of course, the main benefactors here are the
oligarchs. They’ve been doing pretty much everything
they can to move as much of their wealth as possible outside of Russia, mostly by purchasing
stock in foreign companies and real estate. As to what the future holds for Lukoil and
the other Russian oil companies, the truth is that they aren’t gonna disappear any
time soon. Oil remains the lifeblood of the Russian economy,
even though prices have been low for over two years now. So essentially, the Russian oligarchs have
many decades of oil revenue to look forward to, while the Russian people, well not so
much. Now, many of the photos you saw in this video
came from Storyblocks, which I can happily recommend to you for all your stock image
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description. Of course, I want to give huge thanks to everybody
on Patreon for supporting me and to you for watching. Don’t forget to follow me on Facebook, Twitter
and Reddit, and as always: stay smart.