Boney M said it best: "Oh those Russians"

Very pointy boat

Russia is now launching a two-pronged attack on South America, hearts to the North and minds to the South.

The batting of the eyelids is steaming towards Venezuela right now. The nuclear powered battle cruiser "Pyotr Veliky" (Peter the Great) passed the straits of Gibraltar yesterday on its way across the Atlantic and is due to arrive in Venezuela for bi-national naval maneuvers at the end of the month. According to the ship's stats it carries cruise missiles (non nuclear tipped for this trip, so they tell us) with a range of up to 500km, so it won't be long before the US 4th Fleet coincidentally in the area right now is in range (if the Russkies feel like a potshot..which i doubt).

As for the business dealings (apart from the Russian takeover of Venezuela's gold industry slated for early 2009 and Russian oil company Rosneft trying to get its hands on a piece of prime Venezuelan real estate in the last couple of days), that's covered by today's news that Russia via its Gazprom state oil company wants to buy the 20% of Repsol (REP) currently in the hands of Spanish building company Sacyr Vallehermosa (who have announced intention to sell already). The Spaniards are clearly being semi-forced into an asset liquidation by the world downturn, as there wouldn't be much reason to sell its REP for a mooted €3.5Bn when it has the chunk on its books at €6.525Bn.

So with Repsol YPF a major part of Argentina's industrial life, the Russians are looking to open up a second LatAm front, as it were. Let's see how this one progresses.

So how did Repsol manage to hold on to its oil biz in Ecuador?

If these two rumble the Muffin will beat the Spaniard's tush again

The Muffin revealed all in his radio address today.

"Even the Spanish government intervened (i.e. lobbied on Repsol's behalf), and in consideration of that government we met with the Repsol executives (who) accepted every single one of our conditions."

Or in other words, KOW TOW! KOW TOW! KOW TOW!

Correa continued; "We are very happy that Repsol is staying in Ecuador. It is a very serious company, but we aren't going to let foreign companies impose the conditions (of the contracts)."

Gotta love this guy.

Repsol Kow-Tows to Studmuffin and gets to keep its oil

"hmmmm...Muffins..."

As usual, Alonso Soto of Reuters has scooped the field on a big Ecuador biz story. That guy is good, and here's the Reuters story below.

Make no mistake, this one is a big, big win for President Studmuffin and he'll reap both kudos and extra money for his country over this. I just hope he's read John Perkins' "Confessions of an Economic Hit Man"........

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UPDATE 1-Ecuador reaches contract deal with Repsol-sources

By Alonso Soto

QUITO, Nov 6 (Reuters) - Ecuador will keep its contract with Spain's Repsol (REP.MC: Quote, Profile, Research, Stock Buzz) after reaching an agreement over new terms, oil ministry sources said Thursday.

"Yesterday we reached an agreement with Repsol, they have accepted our terms," one senior ministry official told Reuters, asking not to be named because he was not allowed to speak on the matter. Two other ministry sources confirmed the deal.

Ecuador had said last week it planned to terminate the company's extraction contract because it could not reach a deal on terms more favorable to the state. But Repsol had said it hoped for an accord.

Ecuadorean President Rafael Correa had only recently said it was too late for the company to save its contract, but the leftist is known for his arm-twisting tactics with foreign companies to secure more benefits for the state.

Since he took office in 2007, Correa has launched an aggressive drive to renegotiate foreign oil and mining deal to exert more control over those key sectors of the OPEC nation's economy. He has threatened to expel other companies in the past.

The former economy minister wants oil companies to switch to new service deals that would allow the state to keep all the oil they produce in exchange for a set fee.

Oil Minister Derlis Palacios is expected to publicly sign a temporary participation-sharing contract with Repsol later on Thursday in hopes of switching to service deals in a year.

Ecuador has already signed temporary deals with the largest oil companies in Ecuador, including Brazil's Petrobras (PETR4.SA: Quote, Profile, Research, Stock Buzz) and China's Andes Petroleum.

The new deal would lower Repsol's overall tax burden in exchange for giving more of the oil it produces to the state, ministry officials said.

Repsol, one of the Andean country's largest investors, operates three oilfields in the Amazon jungle with a capacity to produce around 65,000 barrels per day. (Reporting by Alonso Soto in Quito; Editing by John Picinich)

Related Post
Is Studmuffin's hardball finally working? (3 November)

Is Studmuffin's hardball finally working?

Hey, maybe Correa has finally made big oil's poker face crack. With last week's declaration that Repsol (REP) would be thrown out of the country which was then backed up by another Muffin attack on FDI this weekend that went....

"Let the multinational companies understand; the Banana Republic is finished. Conditions are not made by then (any longer), they are made by the country (Ecuador)."

......Repsol looks like it's suddenly realized this time is serious. Noises from the Spanish government this morning were "the negotiations are ongoing". Tell that to Correa, señores, because he said on his Saturday show "Now they are contacting me...now they want to talk; too late."

So anyway the Repsol bigwigs are reportedly flying out to Ecuador as I write these words. Let's see who wins this round of brinkmanship. Shades of how President Studmuffin won the fight with Carlos Slim and America Movil and all of a sudden Correa looks in the catbird seat. Will REP kowtow? Watch this space........

Ecuador news roundup

Rafa seen out with Bina last weekend

Let's all feign surprise: The US Central Intelligence Agency had "full knowledge" of the deadly Colombian raid March 1 on a FARC rebel camp inside Ecuador that led to a rupture in ties between Bogota and Quito.

Crisis what crisis? Ecuador's FinMin sez the country will grow 4% to 5% in 2009. Otto sez "believe that one when I see it".

The much delayed mining law is going to the lawmakers next week. Word is that Ecuador is now treating the matter as "a priority", but that word needs more than just a literal translation when transferring it from latino to anglosaxon mentality.

As for the oil sector, Studmuffin keeps on playing the hardball. The latest target is Repsol (REP) of Spain and he says that because REP and Ecuador can't come to an agreement on its local production it's end-of-contract-adios-amigos time.

But I've saved the best til last: Studmuffin got his dos centavos in about the world financial collapse and I agree with everything he said on this one.

"One of the few good things to come out of this crisis is that we don't have to put up with those yuppies of Lehman Brothers, Standard & Poors and JP Morgan. When I was minister, it was unbearable to have a line of those kids asking for an appointment so that I could do their job. They'd ask you for your analysis and then present it in a report as if were their own."

YAY....you still rock, Rafa.

Bolivia does good business with foreign oil company: Shockingly the story is missed by English media

Evo shows his true colors

Yesterday, the gov't of Bolivia (via its state-owned oil company YPFB) and Spain's Repsol signed off on its deal and fomally created their joint venture company known as YPFB-Andina. The JV company is 51% Bolivia and 49% Repsol. The ceremony and related comments were missed almost entirely by the English speaking media.....after all, the last thing anyone needs to hear about Bolivia is their willingness to work with foreign investors and come to fair agreements that suit everybody.

Make no mistake; this deal is a big one for Bolivia because the JV controls 40% of all hydrocarbons production in the state. It is rightly being fanfared in Bolivia today as an important step forward for both future fiscal revenues and wider stability. However, don't expect Bolivia to come up on your mainstream news media until Evo says "Yankees go home" again.

Oh yeah, nearly forgot: I say "almost" missed the story, as AP manged to scrawl ten lines on the event. Here is their report in its entirety:

Bolivia takes control of Repsol local subsidiary

LA PAZ, Bolivia: Bolivia's state energy company has completed its takeover of the local operations of Spanish company Repsol.

Repsol YPF and the government signed an agreement Wednesday making Bolivia's YPFB the majority stakeholder in Repsol subsidiary Andina, ending months of negotiations. The company will be known as YPFB Andina SA.

President Evo Morales said at the signing ceremony that Bolivia needs "partners who will be respected by the state as long as they respect (the country's) sovereignty."

Repsol executive Nemesio Fernandez promised investment but did not give details.

Morales ordered Bolivia's hydrocarbons industry nationalized in 2006. The government is still negotiating with three other foreign companies over compensation.

As you might expect, even this single note on the agreement between Repsol and Bolivia is missing facts and slanted its own way...I mean, I just love the way the title implies Bolivia is stealing something from the poor, hard done by Spaniards who in turn are al vague and "we dunno what to do now" about the new JV. Just another piece of crap reporting on Bolivia to add to the pile, folks. So if you're versed in Spanish take a look at this note that gives plenty more, including comments from the Repsol side that "....the new agreement between the shareholders will achieve growth for the company and ....the Spanish/Argentine company respects the rules of every country (in which it operates)."

Respect Bolivia? Ahhhh!...NOW i understand why the English press didn't bother covering this story!