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Financial Times: Russia’s oil and gas industry booming BECAUSE of sanctions

Financial Times shows sanctions have triggered a technological boom and a successful restructuring within Russia’s oil and gas industry

Alexander Mercouris

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The sectoral sanctions the Western powers imposed on Russia in July 2014 because of the conflict in the Donbass continue to have paradoxical results.

The financial sanctions, which effectively prevented Russian companies from borrowing in Western financial markets, instead of causing the Russian economy to implode, have caused it to deleverage at an unprecedented rate, hugely strengthening Russia’s financial sector and the balance sheets of Russia’s companies, setting the scene for a coming investment boom.

The counter-sanctions Russia imposed prohibiting the importation of Western foodstuffs into Russia have led to a huge boom in Russia’s agriculture sector, as even the Financial Times was recently forced to admit, making Russia almost completely self-sufficient in food, and making it a major food exporter.

However perhaps the most paradoxical result of all has been in Russia’s oil and gas industry.

Western sanctions were supposed to cripple this industry – wrongly assumed in the West to be existentially important for Russia’s very existence – by depriving it of the technology it needed to develop the huge untapped oil and gas reserves Russia is known to have in the Arctic, and making development of its huge shale reserves, which are known to dwarf those of the US, impossible.

In the event the Financial Times has now admitted in a lengthy article that within less than three years of the sanctions being imposed the Russian oil and gas industry is in the throes of a technological boom, as Russian companies forge ahead with Arctic drilling, successfully replicating the very same Western technologies which were supposed to be beyond them

………..a drill began its 5,000m journey downwards, in search of oil deposits that the country is banking on to provide more than a quarter of its future output. Perched on the edge of a peninsula deep in the Arctic Circle, Tsentralno- Olginskaya-1 will be Russia’s northernmost oil well. Closer to the North Pole than to any city, it is a feat of engineering that uses equipment shipped 3,600km through icy waters navigable only for two months of the year.

The well is one of the most technologically challenging ever attempted in Russia. With the deposits located beneath the icy, frequently frozen waters of the Laptev Sea, cutting-edge horizontal drilling techniques will be used to reach up to 15,000m from the main site.

But it was also a moment of triumph for Mr Putin, who was beamed in via video conference from St Petersburg as Mr Sechin braved the frigid elements and who celebrated the start of drilling as an act of homegrown ingenuity.

Three years ago, when the US and EU imposed sanctions on the country that restricted companies such as Rosneft from foreign capital and technology, complex wells were exactly the kind of ambitious projects that were supposed to be rendered impossible. Western governments hoped that pressure on Russia’s main energy companies would help change Mr Putin’s political calculations. But as projects like Tsentralno-Olginskaya-1 attest, Russia’s oil and gas majors have found ways to carry on regardless.

“Horizontal drilling is a complex and high-tech operation. This is just the first well. There is much more work ahead,” Mr Putin told Mr Sechin in the heavily scripted conversation.

It seems according to the same article that the Russians are forging ahead with shale technology as well

……..2,000km south-west of Tsentralno-Olginskaya-1 in western Siberia, Gazprom Neft, Russia’s third-largest oil producer, is showing few ill effects. Late last year, it became the first Russian company to demonstrate shale oil fracking expertise with a 1km-long horizontal well 2.3km below ground at a site in the vast Bazhenov field, estimated to be the world’s largest shale oil deposit.

Gazprom Neft was able to use homegrown technology that it was forced to develop after the sanctions prompted its international partners to walk away from the project.

“We are like a snowball,” says Sergey Vakulenko, head of strategy and innovation at the company, a unit of gas giant Gazprom. “The harder you squeeze, the harder we get.” ……

“Sure, in terms of shale technology, we are a little behind the Americans. But in time, and definitely before we absolutely need to, we will get to where we need to be, sanctions or no sanctions,” says Mr Vakulenko.

“We could do it now, but we don’t need to,” he adds, referring to even more complex fracking techniques that will be required to fully exploit the Bazhenov field’s 75bn barrels of estimated reserves. “Why go after the high-hanging fruit when there is lower stuff available right now?”

The point about Russia not needing to go after the high-hanging fruit when there is an abundance of lower-hanging fruit for it to exploit is not bragging or propaganda.  It was made to me a few months ago in person by a Russian scientist who is an expert in hydraulic fracking.

Perhaps even more striking than this news of technological advances is the Financial Times’s admission that the effect of the sanctions has been to make the Russian oil and gas industry financially stronger and more efficient

“In terms of today’s projects, we are not at all affected [by the sanctions],” [Yakulenko] says in an interview at the company’s St Petersburg offices, where engineers use vast computer screens to remotely control drills at more than 600 wells across the country. “At their current configuration, they aren’t and won’t be painful, irrelevant of how long they are in place.”

Between 2013 and 2016, Russian crude oil production rose almost 6 per cent, more than twice as much as the rise in combined output from the Opec group of countries. Revenues at the country’s three largest producers have risen 11 per cent in that period.

The curtailment of foreign cash forced many to restructure their balance sheets with the help of domestic lenders, cut loss-making or costly new projects, and increase their efficiency.

Acquisitions and international expansion projects have followed. “The accepted narrative is that there is only upside risk from sanctions [being lifted] as the majority of the companies affected have shown few ill effects,” says the head of a western bank in Moscow. “In fact, lots of them have been forced to be smarter and have increased their competitiveness.”

Articles such as this one in the Financial Times are still comparatively rare.  The orthodoxy amongst Western governments and in the Western media is that Russia is suffering badly from the sanctions.  That is one reason why there is still so much resistance to any move whether by the Trump administration or by anyone else to lift them.

The truth is that though the sanctions caused the Russian economy genuine difficulties in late 2014, when Russian companies had to repay debts they struggled to finance because of the sanctions and the oil price fall, once Russia got through those initial difficulties the effect of the sanctions on the Russian economy has been entirely beneficial, and is becoming more so.

The West seriously underestimated Russia in 2014.  It failed to realise to what an extent the country had advanced beyond the disastrous times of the 1990s.

Whereas the sort of sanctions the West imposed on Russia in 2014 would have crushed the Russian economy if they had been imposed in say 2000, today Russia is fully capable of developing its economy by drawing on its own financial resources and its own technology, both of which it has in abundance.

What the West did in 2014, by imposing the sanctions at a time when there was an oil price fall, was force the Russians to do this more efficiently and more quickly than they would have done if they had been left alone.

Westerners always seem to cling on to their idea of Russia as a poor, technologically backward, ill-governed, irredeemably corrupt, ‘third world’ country (“Upper Volta with missiles”).  This is what leads them to make foolish decisions, such as the decision to impose sectoral sanctions, which they took in July 2014.

On the subject of Russia being ill-governed, the Financial Times quotes Apurva Sanghi, lead economist for Russia at the World Bank in Moscow, as having this to say

There is a pretty uniform consensus that the oil price shock dwarfed the sanctions.  If you look at what the authorities have done over the past few years for macro stability, it has been pretty outstanding and the results are there to be seen.

On the macro-economic facts, it is impossible to disagree with this assessment, and on the oil and gas industry facts as described in the Financial Times article, it is impossible to say anything different.

On 27th May 2016, when I discussed the West’s failed attempt to stop Russia floating a eurobond, I made this point in relation to how the West’s actions had actually strengthened Russia’s financial system

Truly Western governments when it comes to Russia seem intent on proving Nietzsche’s dictum true: that which does not break us makes us stronger.  Certainly that has been true of Russia’s eurobond sale.  By trying and failing to sabotage it the West has only managed to make Russia stronger.

The same it turns out is true of Russia’s oil and gas industry.

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DS Analysis
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DS Analysis

Most people understand the basic theory of “free” trade and how it theoretically is better for everyone. That would be true if trade was actually free like it is in the micro economy. The reality is, international trade is anything but free. The whole system is based on the US dollar monopoly and Federal reserve cartel that the US controls at gunpoint. Increased production by a country leads to a higher value currency which leads to cheaper food and energy which leaves more discretionary income to save or spend on other things. That is how free trade is supposed to… Read more »

Simon
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Simon

Excellent article. But that FT – as ever, so condescending, even in praise. Didn’t the Russian barbarians do well. All by themselves. Who would have thought it. It must be stolen technology (nudge nudge wink wink). But hold on – Rosneft’s output is bigger than Exxon. Gazprom alone is like BP+Shell+Total combined. It seems those Russians do know something about extracting oil and gas from below the ground after all. Still – it’s Russia, so their companies must be worth less. Much less. Just don’t look at Big Oil’s balance sheet debt or worry about their ridiculous share prices pumped… Read more »

Le Ruscino
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Le Ruscino

This list is the Industry Joke !

Why is it a Joke ? Just look at the reserves to asset value ratios as can be seen – Rosneft in truth sits on more crude oil reserves than any oil company on the planet & Gazprom is massively bigger.

What’s more interesting is that Russia has always under declared their assets & by how much is anyone’s guess but its minimum 30% but could be over 100% ?

Simon
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Simon

Agreed. Those numbers are actually production, but your point about reserves is also absolutely correct. The Russian companies are massively undervalued.

Stavros Hadjiyiannis
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Stavros Hadjiyiannis

Several factors contribute so that Russian corporations are so grotesquely undervalued: a) The state has controlling stakes, this makes some undervaluation legitimate. b) RUS energy corporations don’t have the downstream business that Western and Chinese corporations do. c) Active economic sabotage from “Western partners”

Simon
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Simon

You are right of course.
But I’d still rather own 10% of Surgutneftagas than 1 % of Conoco, and take my chances (and Surgut is the darkest horse of the lot!) 😉

Stavros Hadjiyiannis
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Stavros Hadjiyiannis

Those are excellent stats. Good work.

Stavros Hadjiyiannis
Guest
Stavros Hadjiyiannis

This is of course not the first time that the “West” has grossly underestimated Russia. On the article itself, these are my observations/comments: a) In my opinion, the oil and gas industry is indeed of existential importance to Russia, on this NATO was correct. What they failed to fully integrate into their calculations is that Russia is in fact the world’s most efficient and low-cost producer of hydrocarbons. If Russia’s oil & gas reserves were not easily and cheaply exploitable, then the oil price crash would have bankrupted Russia very quickly, there would have been no need for NATO to… Read more »

Kimppis
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Kimppis

I wouldn’t necessarily say that the oil and gas sector is existentially important for Russia. After all, it’s something like 15-20% of the overall GDP. That said, it’s certainly the single most important sector. Also, Russia’s GDP per capita isn’t actually low. It’s reasonably high, something like $25 000. I’m obviously talking about purchasing power parity here. And that is for almost 150 million people, so the PPP GDP is comparable to Germany. That explains it all, really. So the per capita GDP is considerably higher than the world average. If you look at the list of countries that have… Read more »

DS Analysis
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DS Analysis

Yeah as you said, oil/gas is 15% of the economy now. It was 40% in the 90’s.

And the west uses dollar bloc GDP figures that don’t account for production that is consumed within Russia. This is where all of this “California has a bigger econ”nonsese comes from.

Alex Popoff
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Alex Popoff

Russian standards of accounting GDP varie from the western. For example till recent times military inner payments between army and military factories weren’t acoountable into GDP.

Large gvmnt sector in economy is badly accountable regarding GDP issue, because whole GDP concept was invented for other type of economy.

So Russia could be estimated as Poland with high technologies, 3,5 times population higher and endless resourses.

Le Ruscino
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Le Ruscino

Agree wholeheartedly with your well informed comment. There is a sad point to note & its that the US would cut off its arm to bleed on Russia’s shirt & this is exactly what they have done. US oil reserves are high cost for lifting as are Canada’s (Shale & Tar) & as you say Russian lifting costs are low mainly due to traditional nature of underground caverns being tapped aided by good tech. The BIG double whammy here is that Global oil consumption never stopped marching toward 100mio bbls per day & with low prices investment in new projects… Read more »

AMHants
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AMHants

Didn’t Obama and Saudi miscalculate oil/gas GDP and the Russian economy, when they decided to play with the oil market? Believing it made 50% of Russian GDP, rather than 16%? Together with forgetting that Russia could produce a barrel of oil for $12 dollars, production costs being in ruble and selling in $USD. So how much does it cost the US to produce a barrel of oil? How many of their oil companies ended up facing bankruptcy?

DS Analysis
Guest
DS Analysis

There was shale oil plays that were not profitable at $100 a barrel. The whole shale industry in the US has not yet even faced a US recession. Just like US banks, there is tons of zombie shale producers out there that will be taken out back and shot in the next recession.

AMHants
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AMHants

Nice one as Russia gets stronger at the expense of those who decided to have a teenage or perhaps toddler temper trantrum, based on envy and greed. Also, with Exxon begging the US to let them ignore the sanctions and help Russia offload the oil in The Black Sea, would Russia actually need there help?

Has anybody seen the latest Ukraine hissy fit?

Ukraine demands confiscation of Gazprom property… http://www.fort-russ.com/2017/04/ukraine-demands-confiscation-of-gazprom.html

Gary Sellars
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Gary Sellars

“Has anybody seen the latest Ukraine hissy fit?”

Does anyone really care what the 404 nation says, wants, thinks or does?

AMHants
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AMHants

Sadly the idiots that run our nations and those so supportive of the failed state.

Kyler Phoenix
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Kyler Phoenix
AMHants
Guest
AMHants

Hahahaha -Newsweek. Really and who controls Newsweek? Personally I look at what the debt clock has to say. Russia Foreign Exchange Reserves US Foreign Exchange Reserves Russia Gold Reserves Russia National Debt: $155,410,825,045 Interest per Year $9,541,556,000 Interest per Second $303 Debt per Citizen $1,062 Debt as % of GDP 15.59% GDP $997,000,000,000 Population 146,300,000 United States National Debt: $19,853,203,835,571 Interest per Year $442,585,040,366 Interest per Second $14,034 Debt per Citizen $61,209 Debt as % of GDP 106.31% GDP $18,675,300,000,000 Population 324,352,551 Russia, a creditor nation, in control of their vast wealth of natural resources. The middle class sector on… Read more »

Kyler Phoenix
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Kyler Phoenix

The information shared can be verified online on myriad sites. Your info comes from?

AMHants
Guest
AMHants

A myriad of sites? Can you site them in an academic paper? National Debt Clock … http://www.nationaldebtclocks.org/ US Foreign Exchange Reserves http://www.tradingeconomics.com Federal Reserve (America) Russia Foreign Exchange Reserves http://www.tradingeconomics.com Russia Central Bank Russian Central Bank Gold Reserves… http://goldsilverworlds.com/wp-content/uploads/2014/07/Russian-Gold-Reserves-June-2014.jpg Your article, just happend to cite Moscow Times. Did you know that the paper has no loyalty to Russia? However, doesn’t Genie Energy Murdoch still have shares in Moscow Times, despite who he sells it to? There was no facts in that article that could be substantiated. Except for GDP. However, they ignore GDP Debt. Russia, as shown by the debt… Read more »

Kyler Phoenix
Guest
Kyler Phoenix

That is not an argument nor does it speak to their current economy. Are you a dropout? You are quoting Russian government sources.

AMHants
Guest
AMHants

Are you a dropout? Russian Government Sources? When has the National Debt Clock been Russian? Russian Gold Reserves Since when has Trading Economics been part of the Russian Government? ‘… ABOUT US Trading Economics provides its users with accurate information for 196 countries including historical data for more than 300.000 economic indicators, exchange rates, stock market indexes, government bond yields and commodity prices. Our data is based on official sources, not third party data providers, and our facts are regularly checked for inconsistencies. TradingEconomics.com has received more than 270 million page views from more than 200 countries. ..’ http://www.tradingeconomics.com/about-te.aspx http://goldsilverworlds.com… Read more »

Kyler Phoenix
Guest
Kyler Phoenix

So, BS right wing blogs huh? Any credible sources? You look like a fool, cretin.

AMHants
Guest
AMHants

You argue with legality. You argue with fact. Failing that you spit you dummy out, throw your toys out of the pram and use personal abuse. That is so media disinformation agent style. What is the script they are given? Besides the 5Ds? Deny, discourse, disagree, derail, discredit. ‘…5. Sidetrack opponents with name calling and ridicule. This is also known as the primary attack the messenger ploy, though other methods qualify as variants of that approach. Associate opponents with unpopular titles such as “kooks”, “right-wing”, “liberal”, “left-wing”, “terrorists”, “conspiracy buffs”, “radicals”, “militia”, “racists”, “religious fanatics”, “sexual deviates”, and so forth.… Read more »

Kyler Phoenix
Guest
Kyler Phoenix

No, you share irrelevant, cherry picked facts. No one denies the facts about the Russian economy. It is easily verifiable. You discredited yourself with obvious BS, cretin.

AMHants
Guest
AMHants

Pot, kettle, black, cutie.

‘…You discredited yourself with obvious BS, cretin…’

Kyler Phoenix
Guest
Kyler Phoenix

I shared verifiable facts. You shared fantasy.

AMHants
Guest
AMHants

Rothschilds darling. Can you cite cnbc in an academic paper, based on assumption? The same article as the Moscow Times. World Bank – Rothshcild and who has minimal debt and is not in need of a Rothschild loan? Didn’t the World Bank fail to notice the crash of 2008? The Diplomat – 2016 Time.com – 2015 Well, all I can say is BRICS. Now what is happening there, besides the AIIB Bank and the BRICS Bank? The $6 trillion, currency reserves, between the 5 nations. The New Silk Road Project. Not forgetting their dominance in the manufacturing and service industries.… Read more »

Kyler Phoenix
Guest
Kyler Phoenix

Everyone is lying except you and some blogs huh? You must be proud. Is that why you hide. Or is there another reason. Let’s find out…https://www.fbi.gov/contact-us

AMHants
Guest
AMHants

Everybody is lying except me? Hahahaha. Darling, one makes up their own opinion, whatever side of the argument. I am more than happy to own my opinion, but, have no desire to take the responsibility of others. I actually care nought about who believes what. However, owing to simple facts, I do not believe Russia is on her knees.

Now why on earth would I wish to contact the FBI?

Kyler Phoenix
Guest
Kyler Phoenix

Iam contacting them. I get a weirdfeeling about youraccount. You definitely are not American and you are spewing pro-Russia propaganda that flies in the face of facts. Good luck.

AMHants
Guest
AMHants

Contact them and I have never said I am American.

I am English. Like the people of America, one gets sick and tired of living in the land of the free, with fascist rules. You explain it perfectly. Report me to the FBI because I had the audacity to poste the findings of the National Debt Clock and Russian and American Foreign Exchange Reserves, with a chart showing how much Russian Gold they have in their vaults.

Excuse me whilst I laugh and have a good day.

Kyler Phoenix
Guest
Kyler Phoenix

No, you aren’t. You posted cherry picked facts that inno way disproved what anyone can easily research and see, the Russian economy is bad. It is forwarded.

AMHants
Guest
AMHants

Yeeah, whatever cutie pie. They have had a file on me since the 70s, am I bovvered? Not at all. If I walk out the door and end up in dead in a briefcase, three bullet holes in the head or worse, but, arranged as a suicide, it is covered. Who cares, I can walk across the road, but, it does not mean I will get to the other side. Death does not bother me, what does bother me, is keeping my mouth shut and being frightened to open it. What a waste of a life. We all come with… Read more »

Kyler Phoenix
Guest
Kyler Phoenix

You seem mentally ill. It is forwarded. You can stop replying now, if you have the ability to control yourself.

Kyler Phoenix
Guest
Kyler Phoenix

Oh, and what would you know of any academic paper, wantwit?

Isabella Jones
Guest
Isabella Jones

Ah, that wonderful Law of Unintended Consequences. All we need now is a couple more plus a Black Swan event against America and that will be the end of the Empire of Cowards and it’s blood money $.

Kyler Phoenix
Guest
Kyler Phoenix
Bente Petersen
Guest
Bente Petersen

very good reporting thank you… The Duran delivers !!!!!

Aby
Guest

Well, sanctions are not the solution of any conflicts and this have to be understand to the nation. The global trade is open momentum & this shouldn’t be blocked.

Latest

Russia Gives US Red Line On Venezuela

Political force is out. Military force is out. Respect international law and Venezuela’s sovereignty. That’s Russia’s eminently reasonable ultimatum to Washington.

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Authored by Finian Cunningham via The Strategic Culture Foundation:


At a high-level meeting in Rome this week, it seems that Russia reiterated a grave warning to the US – Moscow will not tolerate American military intervention to topple the Venezuelan government with whom it is allied.

Meanwhile, back in Washington DC, President Donald Trump was again bragging that the military option was still on the table, in his press conference with Brazilian counterpart Jair Bolsonaro. Trump is bluffing or not yet up to speed with being apprised of Russia’s red line.

The meeting in the Italian capital between US “special envoy” on Venezuelan affairs Elliot Abrams and Russia’s deputy foreign minister Sergei Ryabkov had an air of urgency in its arrangement. The US State Department announced the tête-à-tête only three days beforehand. The two officials also reportedly held their two-hour discussions in a Rome hotel, a venue indicating ad hoc arrangement.

Abrams is no ordinary diplomat. He is a regime-change specialist with a criminal record for sponsoring terrorist operations, specifically the infamous Iran-Contra affair to destabilize Nicaragua during the 1980s. His appointment by President Trump to the “Venezuela file” only underscores the serious intent in Washington for regime change in Caracas. Whether it gets away with that intent is another matter.

Moscow’s interlocutor, Sergei Ryabkov, is known to not mince his words, having earlier castigated Washington for seeking global military domination. He calls a spade a spade, and presumably a criminal a criminal.

The encounter in Rome this week was described as “frank” and “serious” – which is diplomatic code for a blazing exchange. The timing comes at a high-stakes moment, after Venezuela having been thrown into chaos last week from civilian power blackouts that many observers, including the Kremlin, blame on American cyber sabotage. The power grid outage followed a failed attempt by Washington to stage a provocation with the Venezuelan military over humanitarian aid deliveries last month from neighboring Colombia.

The fact that Washington’s efforts to overthrow the elected President Nicolas Maduro have so far floundered, might suggest that the Americans are intensifying their campaign to destabilize the country, with the objective of installing US-backed opposition figure Juan Guaido. He declared himself “acting president” in January with Washington’s imprimatur.

Given that the nationwide power blackouts seem to have failed in fomenting a revolt by the civilian population or the military against Maduro, the next option tempting Washington could be the military one.

It seems significant that Washington has recently evacuated its last remaining diplomats from the South American country. US Secretary of State Mike Pompeo commented on the evacuation by saying that having US personnel on the ground “was limiting” Washington’s scope for action. Also, American Airlines reportedly cancelled all its services to Venezuela in the past week. Again, suggesting that the US was considering a military intervention, either directly with its troops or covertly by weaponizing local proxies. The latter certainly falls under Abrams’ purview.

After the Rome meeting, Ryabkov said bluntly: “We assume that Washington treats our priorities seriously, our approach and warnings.”

One of those warnings delivered by Ryabkov is understood to have been that no American military intervention in Venezuela will be tolerated by Moscow.

For his part, Abrams sounded as if he had emerged from the meeting after having been given a severe reprimand. “No, we did not come to a meeting of minds, but I think the talks were positive in the sense that both sides emerged with a better understanding of the other’s views,” he told reporters.

“A better understanding of the other’s views,” means that the American side was given a red line to back off.

The arrogance of the Americans is staggering. Abrams seems, according to US reporting, to have flown to Rome with the expectation of working out with Ryabkov a “transition” or “compromise” on who gets the “title of president” of Venezuela.

That’s what he no doubt meant when he said after the meeting “there was not a meeting of minds”, but rather he got “a better understanding” of Russia’s position.

Washington’s gambit is a replay of Syria. During the eight-year war in that country, the US continually proffered the demand of a “political transition” which at the end would see President Bashar al Assad standing down. By contrast, Russia’s unflinching position on Syria has always been that it’s not up to any external power to decide Syria’s politics. It is a sovereign matter for the Syrian people to determine independently.

Nearly three years after Russia intervened militarily in Syria to salvage the Arab country from a US-backed covert war for regime change, the American side has manifestly given up on its erstwhile imperious demands for “political transition”. The principle of Syrian sovereignty has prevailed, in large part because of Russia’s trenchant defense of its Arab ally.

Likewise, Washington, in its incorrigible arrogance, is getting another lesson from Russia – this time in its own presumed “back yard” of Latin America.

It’s not a question of Russia being inveigled by Washington’s regime-change schemers about who should be president of Venezuela and “how we can manage a transition”. Moscow has reiterated countless times that the legitimate president of Venezuela is Nicolas Maduro whom the people voted for last year by an overwhelming majority in a free and fair election – albeit boycotted by the US-orchestrated opposition.

The framework Washington is attempting to set up of choosing between their desired “interim president” and incumbent Maduro is an entirely spurious one. It is not even worthy to be discussed because it is a gross violation of Venezuela’s sovereignty. Who is Washington to even dare try to impose its false choice?

On Venezuela, Russia is having to remind the criminal American rulers – again – about international law and respect for national sovereignty, as Moscow earlier did with regard to Syria.

And in case Washington gets into a huff and tries the military option, Moscow this week told regime-change henchman Abrams that that’s a red line. If Washington has any sense of rationale left, it will know from its Syria fiasco that Russia has Venezuela’s back covered.

Political force is out. Military force is out. Respect international law and Venezuela’s sovereignty. That’s Russia’s eminently reasonable ultimatum to Washington.

Now, the desperate Americans could still try more sabotage, cyber or financial. But their options are limited, contrary to what Trump thinks.

How the days of American imperialist swagger are numbered. There was a time when it could rampage all over Latin America. Not any more, evidently. Thanks in part to Russia’s global standing and military power.

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Latest

With RussiaGate Over Where’s Hillary?

Hillary is the epitome of envy. Envy is the destructive sin of coveting someone else’s life so much they are obsessed with destroying it. It’s the sin of Cain. She envies what Trump has, the Presidency.

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Authored by Tom Luongo:


During most of the RussiaGate investigation against Donald Trump I kept saying that all roads lead to Hillary Clinton.

Anyone with three working brain cells knew this, including ‘Miss’ Maddow, whose tears of disappointment are particularly delicious.

Robert Mueller’s investigation was designed from the beginning to create something out of nothing. It did this admirably.

It was so effective it paralyzed the country for more than two years, just like Europe has been held hostage by Brexit. And all of this because, in the end, the elites I call The Davos Crowd refused to accept that the people no longer believed their lies about the benefits of their neoliberal, globalist agenda.

Hillary Clinton’s ascension to the Presidency was to be their apotheosis along with the Brexit vote. These were meant to lay to rest, once and for all time, the vaguely libertarian notion that people should rule themselves and not be ruled by philosopher kings in some distant land.

Hillary’s failure was enormous. And the RussiaGate gambit to destroy Trump served a laundry list of purposes to cover it:

  1. Undermine his legitimacy before he even takes office.
  2. Accuse him of what Hillary actually did: collude with Russians and Ukrainians to effect the outcome of the election
  3. Paralyze Trump on his foreign policy desires to scale back the Empire
  4. Give aid and comfort to hurting progressives and radicalize them further undermining our political system
  5. Polarize the electorate over the false choice of Trump’s guilt.
  6. Paralyze the Dept. of Justice and Congress so that they would not uncover the massive corruption in the intelligence agencies in the U.S. and the U.K.
  7. Isolate Trump and take away every ally or potential ally he could have by turning them against him through prosecutor overreach.

Hillary should have been thrown to the wolves after she failed. When you fail the people she failed and cost them the money she cost them, you lose more than just your funding. What this tells you is that she has so much dirt on everyone involved, once this thing started everyone went along with it lest she burn them down as well.

Burnin’ Down da House

Hillary is the epitome of envy. Envy is the destructive sin of coveting someone else’s life so much they are obsessed with destroying it. It’s the sin of Cain

She envies what Trump has, the Presidency.

And she was willing to tear it down to keep him from having it no matter how much damage it would do. She’s worse than the Joker from The Dark Knight.

Because while the Joker is unfathomable to someone with a conscience there’s little stopping us from excising him from the community completely., even though Batman refuses.

Hillary hates us for who we are and what we won’t give her. And that animus drove her to blackmail the world while putting on the face of its savior.

And that’s what makes what comes next so obvious to me. RussiaGate was never a sustainable narrative. It was ludicrous from the beginning. And now that it has ended with a whimper there are a lot of angry, confused and scared people out there.

Mueller thought all he had to do was lean on corrupt people and threaten them with everything. They would turn on Trump. He would resign in disgrace from the public outcry.

It didn’t work. In the end Paul Manafort, Michael Cohen and Roger Stone all held their ground or perjured themselves into the whole thing falling apart.

Andrew Weissman’s resignation last month was your tell there was nothing. Mueller would pursue this to the limit of his personal reputation and no further.

Just like so many other politicians.

Vote Your Pocketbook

With respect to Brexit I’ve been convinced that it would come down to reputations.

Would the British MP’s vote against their own personal best interests to do the bidding of the EU?

Would Theresa May eventually realize her historical reputation would be destroyed if she caves to Brussels and betrays Brexit in the end?

Always bet on the fecklessness of politicians. They will always act selfishly when put to the test. While leading RussiaGate, Mueller was always headed here if he couldn’t get someone to betray Trump.

And now his report is in. There are no new indictments. And by doing so he is saving his reputation for the future. And that is your biggest tell that HIllary’s blackmail is now worthless.

They don’t fear her anymore because RussiaGate outed her as the architect. Anything else she has is irrelevant in the face of trying to oust a sitting president from power.

The progressives that were convinced of Trump’s treason are bereft; their false hope stripped away like standing in front of a sandblaster. They will be raw, angry and looking for blood after they get over their denial.

Everyone else who was blackmailed into going along with this lunacy will begin cutting deals to save their skins. The outrage over this will not end. Trump will be President when he stands for re-election.

The Wolves Beckon

The Democrats do not have a chance against him as of right now. When he was caving on everything back in December it looked like he was done. That there was enough meat on the RussiaGate bones to make Nancy Pelosi brave.

Then she backed off on impeachment talk. Oops.

But the Democrats have a sincere problem. Their candidates have no solutions other than to embrace the crazy and go full Bolshevik. That is not a winning position.

Trump will kill them on ‘socialism.’

The Deep State and The Davos Crowd stand revealed and reviled.

If they don’t do something dramatic then the anger from the rest of the country will also be palpable come election time. Justice is not done simply by saying, “No evidence of collusion.”

It’s clear that RussiaGate is a failure of monumental proportions. Heads will have to roll. But who will be willing to fall on their sword at this point?

Comey? No. McCabe? No.

There is only one answer. And Obama’s people are still in place to protect him. I said last fall that “Hillary would indict herself.” And I meant it. Eventually her blackmail and drive to burn it all down led to this moment.

The circumstances are different than I expected back then, Trump didn’t win the mid-terms. But the end result was always the same. If there is no collusion, if RussiaGate is a scam, then all roads lead back to Hillary as the sacrificial lamb.

Because the bigger project, the erection of a transnational superstate, is bigger than any one person. Hillary is expendable.

Lies are expensive to maintain. The truth is cheap to defend. Think of the billions in opportunity costs associated with this. Once the costs rise above the benefits, change happens fast.

If there is any hope of salvaging the center of this country for the Democrats, the ones that voted against Hillary in 2016, then there is no reason anymore not to indict Hillary as the architect of RussiaGate.

We all know it’s the truth. So, the cheapest way out of this mess for them is to give the MAGApedes what they want, Hillary.

And hope that is enough bread and circuses to distract from the real storm ahead of us.

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Trump’s CIA Now Unbound And Back To Its Traditional Hijinks

There is further evidence that suggests the neo-cons, in cahoots with Haspel at the CIA, set out to disrupt the Hanoi summit.

Strategic Culture Foundation

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Authored by Wayne Madsen via The Strategic Culture Foundation:


Under the directorship of torture and black site maven Gina Haspel, Donald Trump’s Central Intelligence Agency has returned to its traditional roots of conducting “black bag” operations and disrupting electrical grids through cyber-attacks.

The Venezuelan government has accused the Trump administration of giving the green light for a series of crippling power failures in Venezuela, which affected 22 of Venezuela’s 23 states, including the capital of Caracas. The long-duration power failures were cited by US Secretary of State Mike Pompeo as a reason for the US withdrawing its diplomats from Caracas. Venezuelan President Nicolas Maduro announced that an international commission assisted by specialists from Russia, China, Iran, and the United Nations would help his country analyze the sources of the Venezuelan electrical grid cyber-attack. Initial cyber-forensics by Venezuela traced some of the cyber warfare being waged against Venezuela to nodes in Houston and Chicago.

In addition to electricity, water service was disrupted in Venezuela. From Miraflores presidential palace in Caracas, Maduro tweeted on March 12: “From the Presidential Command Post, we monitored minute-by-minute the progress of the recovery of the National Electric System.”

Cyber-attacks on a country that puts its civilian population in jeopardy might, at first glance, appear to be a violation of the Geneva Conventions on warfare. However, without a Digital Geneva Convention, civilian populations are not covered by the current Geneva Conventions. However, in 2015, the United Nations Group of Governmental Experts on Developments in the Field of Information and Telecommunications in the Context of International Security (UN GGE), which included experts from the United States, China, Russia, France, the United Kingdom, and other nations, agreed that current international law does apply to cyberspace. Most international legal experts agree that the Geneva Conventions require a digital annex to cover the type of cyber-disruption of the Venezuelan electrical grid carried out by the US intelligence services.

Hybrid warfare against Venezuela, which includes economic, diplomatic, and cyber, has the backing of the neo-conservatives who now call the shots for the Trump White House. They include, in addition to Pompeo, national security adviser John Bolton; Iran-Contra felon Elliott Abrams, Trump’s special envoy to the US-backed opposition-led rump Venezuelan government of Juan Guaido; Cuban-American Mauricio Claver-Carone, the senior director for Western Hemisphere affairs at the National Security Council; and Florida Republican Senator Marco Rubio, a Cuban-American, who represents the interests of South Florida’s right-wing oligarch exiles from Venezuela and other Latin American countries.

While Trump was preparing for his Hanoi summit meeting with North Korean leader Kim Jong Un, Trump’s second summit with Kim, Haspel’s CIA dug into its old bag of black operations, while also engaging in the more modern form of cyber-attack in targeting North Korea.

On February 22, 2019, ten males, all wearing masks, broke into the North Korean embassy, which is located in the residential suburb of Aravaca, north of Madrid, Spain, and subjected eight embassy staff members to brutal interrogation tactics, including tying up the diplomats, throwing black bags over their heads (a specialty of Ms. Haspel), and subjecting them to beatings. One female diplomat managed to escape through a second-floor window and her screams alerted a neighbor, who promptly called the police. Two embassy employees required medical attention from their injuries.

The Spanish police and National Intelligence Center (CNI) linked two of the embassy invaders to the CIA. “El Pais,” a Spanish national newspaper, reported that the CIA issued one of its standard “denials,” however, the paper stated that Spanish authorities found the denial from Langley, Virginia to be “unconvincing.” “El Pais” reported that the invasion of the North Korean embassy by the CIA had severely harmed relations between Madrid and Washington.

The National Police Corps’ General Commissariat of Information (CGI) and CNI concluded that the attack and occupation of the North Korean embassy was not carried out by common criminals but was the work of a “military cell” that stole mobile phones and computers. Two of the embassy invaders were identified as Koreans and, based on CGI’s and CNI’s analysis of security camera video footage, they were further recognized as Koreans linked to the CIA. Spanish authorities did not rule out the possibility that South Korea’s National Intelligence Service assisted the CIA in the embassy invasion. The embassy invaders escaped from the embassy using two North Korean luxury sedans bearing diplomatic plates. The cars were later found abandoned.

The criminal inquiry into the incident is now before the Spanish High Court, the Audiencia Nacional, which could order the arrests of the embassy attackers and, if they are in the United States or South Korea, have Spain’s INTERPOL national bureau put out a Red Notice for their arrest and extradition to Spain to stand trial.

Spanish authorities believe the CIA’s embassy attackers were looking for information on Kim Hyok Chol, the former North Korean ambassador to Spain, who was declared “persona non grata” by the Spanish government in 2017. Kim Hyok Chol, a career diplomat from one of North Korea’s elite families who studied French at the Pyongyang University of Foreign Studies and speaks fluent English, is now one of Kim Jong Un’s trusted diplomatic advisers on nuclear talks with the Trump administration and he traveled with Chairman Kim to the failed Hanoi summit with Trump.

With certainty, Kim Hyok Chol thoroughly briefed Kim Jong Un on the CIA’s storming of his old diplomatic post in Spain. When Trump and Chairman Kim met in Hanoi on February 27 and if the issue of the CIA’s siege of the North Korean embassy was brought up, that could have been enough to derail the summit. Considering the fact that war hawks like Bolton, Abrams, and Pompeo are now calling the foreign policy shots for the Trump administration, the attack on the North Korean embassy in Madrid, just five days prior to the Hanoi summit, may have been ordered by Washington’s neo-con cell with the intention of scuttling the second meeting between Trump and Kim and put on ice any future meetings.

There is further evidence that suggests the neo-cons, in cahoots with Haspel at the CIA, set out to disrupt the Hanoi summit. While Trump was meeting with Kim in Vietnam, the CIA is believed to have launched a cyber-attack on the Korean American National Coordinating Council (KANCC) in New York, an organization with ties to the Pyongyang government. KANCC is a non-governmental organization with offices in the Interchurch Center building, near Columbia University in Manhattan. It champions the dropping of US sanctions against North Korea, a sore point in Hanoi between Trump and Kim.

The Trump-Kim Hanoi summit was reported to have hit a roadblock over North Korea’s request for a partial lifting of US sanctions on North Korea, in return for the continued North Korean moratorium on nuclear testing and a partial freeze on production of fissile material. With the CIA’s attack on the North Korean embassy in Spain still fresh in the minds of the North Korean side and the neo-cons’ insistence, pushed by Bolton and Pompeo, for complete North Korean nuclear disarmament, the Hanoi summit was destined for failure. And, with Bolton, Abrams, Pompeo, and other dangerous neo-cons in charge at the White House and the State Department — and Haspel dancing to their tune at the CIA – North Korea and Venezuela are not the only countries currently in the gunsights of the Trump administration.

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