Russian President Vladimir Putin is counting on Exxon Mobil Corp. (XOM) to help drill oil fields in Siberia that may hold almost half the proved reserves of the U.S., extending the petroleum boom that underpins his power.
Russia, which slipped behind Saudi Arabia as the biggest crude producer, BP Plc reported yesterday, is looking to use Exxon’s hydraulic fracturing technology in a venture with Kremlin-run oil company OAO Rosneft. They want to wring “tight oil” from shale rock in west Siberia. The partners plan pilot wells in areas Rosneft said may hold 13.2 billion barrels of oil, a prospect Putin needs for Russia to keep supplying about 16 percent of global exports for another decade.
Putin plans tax incentives and joint ventures for Western partners so that Siberia’s Bazhenov shale formation can someday rival the explosive output of North Dakota’s Bakken shale that cut U.S. oil imports. He promised to unveil tax breaks by October that drillers say are needed to make Russian projects profitable, even as they cut into the state’s petroleum revenue that accounted for half of its $350 billion in income last year.
“If the government is serious about promoting tight oil production, it is within their grasp,” said Ronald Paul Smith, a Moscow-based oil and gas analyst at Citigroup Inc.
Smith said extraction taxes that were around $24 a barrel last quarter may need to be almost eliminated to stimulate output of what’s also called unconventional oil, squeezed from shale rock similar to the Bakken or Eagle Ford discoveries in South Texas.
In an intelligent comforting strategy directed towards the environmental community, Exxon has committed to total disclosure of all (presumably safe & non- poisonous) injected fluids used in their European Hydraulic Fracturing operationsto the EC.
I wonder if Putin (and individual American States) are sufficiently astute to do the same! And not just for Exxon, but for all HF operators!
Exxon *could* be doing the same for the US, if we let them make a profit from the effort. Instead we charge them for the oil leases, deny them permission to explore (drill), tax the refineries into inactivity, and celebrate the Marxists who demonize them at ever opportunity.
The 20th century saw two great experiments, where two countries (one East, one West) were split in half, and one half was given Marxism whilke the other half given Capitalism. Both Marxist ststes (East Germany, North Korea) are failures, while their counterparts (West Germany, South Korea) are success stories on a Grand scale.
Yet our Liberal leaders, the Apologist press, and the Entitlement Class have learned nothing, and continue to punish Capitalism at every opportunity.
First-rate analogy, tadchem!
Consider adding a third “great experiment” of the 20th century to your list. It was called “National Socialism” and we all know how that one went.