Monday, December 22, 2008

There has been much talk and speculation concerning Russia joining OPEC. While current market conditions make it a possibility with some logic, our prediction is it is not likely to happen. Before asking if its is politically feasible or probable, one must be familiar with the drilling realities of Western Siberia and the Arctic regions. Because of the extreme environment, drilling can not just be stopped, put on hold, and started again later at the flick of a switch. If drilling is stopped in that environment, equipment will break and the fields will have to be drilled all over again, with new equipment. Storing the oil instead of exporting would create its own set of problems. Russia joining a natural gas group of exporters is a much more likely scenario. How likely though, remains to be seen.

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