Video of David Zaikin, CEO of New York City-based Siberian Energy Group, commenting about the Russian energy industry on CNBC's Squawk Box last year. You can listen to a more recent interview Mr. Zaikin recorded with the BBC during the G-8 summit in June 2007 here
Click on the extended post to read more.
David Zaikin, CEO of Siberian Energy Group, Interview on CNBC, September 23, 2006:
You have to be there, you have to see really what's going on. I'm puzzled to learn that Kazahkstan, Azerbaijan and Turkmenistan are safer bets for investors [than Russia] and these are future U.S. allies in the search for oil...We love the Siberian market. Today in Siberia producing companies can be bought based on $1 per barrel of proven reserves - C1. In Kazahkstan you have to pay four or five dollars, in the North Sea you have to pay twelve, and in Texas, probably fifteen or sixteen dollars. So we feel that Russia is undervalued, especially in this sector...
If you look at the Russian stock market, which is probably up 1100% in the last five or six years, you feel that these opportunities are not going to last forever. And...as I said, I'm puzzled as to why the U.S. government still hasn't helped small and medium [sized] U.S. based oil and gas companies to go there, spend money, and bring more oil and gas to the United States...
It's hard for me to assess any political risk, I leave it to the [political] administration...what I feel is that in today's world, the U.S. is behind India and China, who are aggressively going to Africa, to Venezuela, to all emerging markets, and buying assets. The U.S. is still relying on Saudi Arabia or countries such as Kazahkstan, Tadjikistan, and Azerbaijan...this is the biggest mistake being made as we speak.
Comments
Yuri,
I would say most western investments have little to do with fundamentals (logic). Most are about TRENDS, or from the aspect of the technician. In the west, you make money if you can guess what others will do in the short term. That's where the biggest money is. Some top notch American investor will one day be analyzing from his hollodeck or Star Trek bridge and will notice the wave of EU and BRIC nations piling money into Russia, it is at that point that these experts will issue a press release advising investors of this grand American discovery.
Investments from the US have more to do with perceptions, people patterns, excitement, fear, emotions and what ever the rest of the mice are doing.
Be it investments, foreign policy, war, housing bubbles, energy issues, or Russia & the CIS, all of it is a mixture of emotions and Darwinian patterns from the perspective of an American (the center of the universe).
To stop and THINK - this is not conforming to markets. You aren't supposed to analyze, or you will go nuts, so Americans say. What you must do is pay attention to the people patterns and then satisfy it by investing into such a wave. Iraq was done this way...
Most people in the West find it convenient to look at Russia and they still see Stalin.
It's why so much is being lost all over the world by the US.
America's reason for where to spend money and where to put it is all about emotions.
After all, these American geniuses still believe Iraq has wmd. These same people think Saddam had something to do with 9/11.
And anyway, Kazakhstan and other Caspian nations are now emulating Russia. Kazakhstan is pushing western majors out. They are realizing a depleting resource must be treated as if it were a national security issue. Any CIS nation with energy reserves is moving to the Russian model that considers energy the same as boarders or air space or defense. Certain things simply can't be private, and energy is the number one item.
So I wouldn't worry about investment issues as oil breaks $100 brl next year, CIS nations will need less and less investments as all of it can come from profits. The energy markets were under valued for years and it was this reason that investments were needed. Matt Simmons, a republican, likes the sound of $250 / brl oil, and I for one agree.
Posted by: Luther G. Quick | September 4, 2007 6:57 PM
Well, actually Luther,its not so much (where to spend money) about emotion as it is about brain-washing. That's what you get when the political class -inbred as it is- concentrating power and funding in fewer and fewer hands can buy control of the media and brainwash a complacent/lazy populace with the most outrageous poppycock, big lies and small, well I guess Hitler proved the viability of the theory!
Sign me Lois White Buffalo
Posted by: Lois DuPey | September 5, 2007 3:35 PM