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Investors choose Russia

Инвесторы выбирают Россию

Инвесторы выбирают Россию

Billionaire Jim Rogers, good double George Soros, continues to invest in Russia. This time he invested part of his fortune in Russian bonds.

The investor said that he believes in the future of the ruble and in oil future American securities, according to him, are now so expensive that more than likely their decline, rather than growth. Jim Rogers also believes that the Russian Central Bank copes with his work. “It would be good Nabiullina stood at the head of the fed”, — jokingly said the billionaire:


Why Jim Rogers believes in Russia?

The reasons for this are several. One of them is oil, which “specializes” the Russian economy. Oil in the long term practically doomed to increase, and this means that the financial future of Russia looks quite Sunny.

At first glance, sure, it sounds weird. American mining sector lost for the year 2015 more than earned over the past 8 years:


Since the summer of 2014 the total capitalization of the 300 largest oil companies dropped by an impressive 2.3 trillion dollars — and it is quite obvious that the upcoming bankruptcy will only increase these dreadful losses:


Specifically, however, Russia is located at some distance from this bloody financial bath and feels sufficiently protected. The Ministry of energy reports that the cost of oil Russia is now two dollars per barrel for conventional oil and $ 20 per barrel of oil trudnoperevarimoy:


This means that the price level at 30-40 dollars per barrel, our oil companies are able not only to vegetate, but to continue to invest in the development of new deposits. In 2016, for example, the volume of investments in future production will remain approximately at the level of 2015 — 1,4 trillion roubles.

It is different from our Western friends and partners. Largest oilfield services company Schlumberger has issued the other day a really shocking news. I quote the main thing:


1. The industry was unable to effectively work out the increasingly complicated environment of hydrocarbon production that have occurred in the last 15 years.

2. The industry is in the deepest crisis in history, most of the Russian oil and gas companies have the profitability and cash flows to unacceptable levels, which is insufficient to maintain stability.

3. This crisis will have serious long-term consequences. You should not expect a return to high prices because the national companies of OPEC have the lowest cost, and is able to maintain the level of oil production, while maintaining the attractiveness for the owners. They most likely will do not focus on the return prices, but at retaining and capturing market share.

4. However, many independent companies, even at prices of $100 per barrel in recent years there has been a loss of technical and financial performance. The industry has not kept pace with the increasing complexity of hydrocarbon production. The cost of a barrel grew faster.

5. Simple fact — despite the fact that global investment in E&P increased over previous years, more than four times, it gave only a 15% increase in oil production.

6. The current breakdown of drilling in the U.S. has lasted for 17 months, and it can be divided into three phases. The third phase, which began in the last quarter — the most serious and without precedent; it says that the industry has full-blown crisis affordable cash.

7. This will accelerate the decline of oil production.

Simply put, the cost of oil over the past 15 years has grown significantly, however, stock prices for oil while, on the contrary, fell. Long time American kancevica existed due to the different kind of loans due to the fact that oil service companies out of desperation served them almost for free. Now this agony is nearing completion: it was impossible to produce oil more than 100 $ and sell it 40, sooner or later, this strategy ends in inevitable ruin.

I note that the increasing complexity of production is observed in Russia. Easy oil is running out, oil companies have to switch to more and more complex deposits. But before 2020 can expect a considerable reduction of the volume of oil production in Russia is not:


The case is quite different in the United States. Kancevica actually are bankrupt companies the zombie and if oil prices do not soar in the near future above 100-120 dollars per barrel, the industry is doomed…

In principle, of course, oil prices may start to rise tomorrow. Very interested in this a large number of players — for example, Qatar has now sent Russia an invitation to the next meeting of the oil producers, in order, presumably, to ask us to cut production:


Again, speculators are now much more interesting to play on the rise than on the decline. Down they walked, the cream of this direction has already been collected. The road to the top, by contrast, looks at the present time very sweet.

You know, if you push the oil from 40 to 15 dollars, the margin will be only 25 dollars. But if whale oil is from 40 to 240 USD, margin will be $ 200 and here the speculators will be something to warm their hands.

Considering what I wrote above — the increasing complexity of the production and a minimum oil price of 100-120 dollars rally in the oil market could begin at any moment.

However, the heart tells me that Russia is unlikely to strike with Qatar. If we really wanted to keep oil prices at a high level, we could, for example, in 2015, they have built oil storage and pozalovat back all the “excess” oil that would have supported prices, and without much loss for the budget.

Nothing like Russia did. Why? Because at the moment we are strategically advantageous to our competitors non — kanavice — left the market for a long time, and that the price of oil was fixed at a fair level, which today, perhaps, is about at around 120 dollars per barrel.

(Just in case. A fair level is the level where producers can not only produce enough oil, but also to invest in the development of new fields).

However, if speculators start the rally without our participation, if oil prices soar to levels under two hundred dollars in April-may and save thereby kancevica from the inevitable collapse, we are also quite satisfied. Russia has supplied two cards, whatever of them fell, our economic future looks clear and reliable.

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