Though the Russian leadership denies that it is implementing state capitalism and affirms its commitment to privatization and competition, the state-owned oil giant Rosneft's takeover of TNK-BP is a bold statement to the contrary. Russia’s still-young market economy has now lost its last important bastion.
MOSCOW – The decision by BP and the Russian shareholders of TNK-BP to sell their stakes to Russia’s state owned Rosneft crowns a very successful year for the company – and for Rosneft CEO Igor Sechin. Before taking over TNK-BP – one of Russia’s major oil companies – Rosneft struck several multi-year investment deals. Earlier this year, Rosneft signed three agreements with ExxonMobil, Eni, and Statoil exceeding $700 billion in total – an amount that dwarfs all other recent foreign direct investment in Russia combined.
What a difference a year makes. In 2011, Rosneft agreed on a joint venture with BP, but TNK-BP’s Russian shareholders forced it to retreat from the deal. Now, Russian taxpayers will pay TNK-BP shareholders $45 billion in cash (and the rest in Rosneft shares). With this transaction, Sechin has built the largest publicly traded oil company in the world. What changed? And what implications does Rosneft’s takeover of TNK-BP have for Russian business?
Some observers are pointing to Sechin’s growing importance. But the Rosneft-TNK-BP deal should not be viewed simplistically as a realization of Sechin’s personal dream of building a national oil champion in Russia.
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It is hard to reconcile the jubilant mood of many business leaders with the uncertainty caused by the war in Ukraine. While there are some positive signs of economic recovery, a sudden escalation could severely destabilize the global economy, cause a stock market crash, and accelerate deglobalization.
warns that the Ukraine war and economic fragmentation are still jeopardizing world growth prospects.
The nation that went to the gates of Moscow in World War II has become as aggressive as a cuddly cat. But with its decision to send Leopard 2 battle tanks to Ukraine, Germany's "culture of reticence," particularly with respect to Russia, may soon be a thing of the past.
examines the origins and implications of the landmark decision to send battle tanks to Ukraine.
MOSCOW – The decision by BP and the Russian shareholders of TNK-BP to sell their stakes to Russia’s state owned Rosneft crowns a very successful year for the company – and for Rosneft CEO Igor Sechin. Before taking over TNK-BP – one of Russia’s major oil companies – Rosneft struck several multi-year investment deals. Earlier this year, Rosneft signed three agreements with ExxonMobil, Eni, and Statoil exceeding $700 billion in total – an amount that dwarfs all other recent foreign direct investment in Russia combined.
What a difference a year makes. In 2011, Rosneft agreed on a joint venture with BP, but TNK-BP’s Russian shareholders forced it to retreat from the deal. Now, Russian taxpayers will pay TNK-BP shareholders $45 billion in cash (and the rest in Rosneft shares). With this transaction, Sechin has built the largest publicly traded oil company in the world. What changed? And what implications does Rosneft’s takeover of TNK-BP have for Russian business?
Some observers are pointing to Sechin’s growing importance. But the Rosneft-TNK-BP deal should not be viewed simplistically as a realization of Sechin’s personal dream of building a national oil champion in Russia.
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