How Tillerson Could Fuel A Russian Arctic Drilling Boom

[Editor’s Note: Pay attention to the disconnect that is going on between Trump and Merklel’s  Germany that is slowly entering the media now Obama has gone. See:  Camelot Rising and the …

Source: How Tillerson Could Fuel A Russian Arctic Drilling Boom

At base, a major part of the job of the State Department has always been as advance guard for U.S. business. In that sense, a businessman as Secretary of State makes some sense.

It also could make sense to have an oil industry leader at the helm when we consider that much of the geopolitics of the world revolve around oil, particularly in the hottest conflict areas of Eurasia, where the U.S. and NATO have been embroiled in war for the past generation.

His confirmation could be seen as a Trump-sponsored “get out of jail card” for Putin. Already the EU seemed to be reading the writing on the wall. Suddenly Gazprom proposed pipelines that had been stalled for more than two years are being approved in Europe.

At a time of rising oil prices, Tillerson’s appointment will almost certainly spark renewed investor interest in Russian energy assets, particularly Rosneft, one of the most undervalued oil industry giant in the world. How undervalued? For comparison, consider the fact that although Rosneft’s reserves are greater than Exxon’s, Exxon’s market value is seven-fold greater than Rosneft’s.

At the same time, as a state controlled company, Rosneft provides several advantages for Exxon, a company that has serious problems in replacing its reserves. These include Rosneft’s privileged, and exclusive right to reserves in the Arctic. Only Gazprom, the other state controlled energy giant, has similar exclusive rights, and is also likely to benefit from the Tillerson appointment.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s