Tuesday, February 26, 2008

A Piece of Paper

This morning I'm looking at a story in the International Herald Tribune about a Texas oilman suing a Russian state owned gas company for breech of contract -- they are hoping to have the case heard in a German court.

It's a breech of contract suit -- what it looks like is that the guy from Texas said he would partner with the Russians back in the early days after the fall of the Soviet Union. It was a risky time to do business there, and the American obtained financing, in effect backing the government and the exploration and distribution of what is thought to be the largest natural gas field in the world.

What I don't see is any investment actually made on the part of the American -- not any major investment, anyway -- I'm sure it all cost a lot of money -- there were flights to Moscow and lots of expensive vodka, no doubt. But nothing to really support his claim to 40% of a 12 billion dollar location.

A piece of paper.

I've been sort of interested -- looking at the news for these months -- in just this sort of thing. All over the world much of the oil and gas is controlled by state owned operations. And they often partner with foreign investors. Venezuela, The Middle East, China -- all of these countries hold hold stakes, benefit and look out for their citizens (to varying degrees of success) in relation to their profits and holdings. I thought about the alternative here in the States -- well, one side is that foreign investors are free to come in and begin to obtain controlling interests in many delicate endeavors here -- we saw this last fall when:

Yesterday, Wednesday, Nov. 28, The Abu Dhabi Investment Corp. firmed plans to spend $7.5 billion and become the largest single share holder in Citigroup. I wrote about it then.

Another is that it might be argued that the oil companies run Washington, and it might be better the other way around -- the guy who's suing, his name personally came up in a meeting between Bush and Putin. I for one don't want to think that the Russian government is going to put a promise to any Texas oilman ahead of what is right for the people of Russia -- I've been fairly mortified to learn of the oilman impingement on American interests myself...

I don't know -- it just brings up all kinds of questions for me. Of course, foreign investment and aid are crucial when things are falling apart -- they are also big bargains -- can one who makes an agreement under duress really ever be expected to maintain that oath a decade later?

Really, when should a contract be binding?
Who should it be binding to?
What should we be allowed to take advantage of?
Is some global court of law really what we want in this world?
Wouldn't that likely get the US sued for all sorts of things?

But you promised.

I lied.

You can't lie.

So sue me.

I needed a loaf of bread to feed my starving family.
I needed to get through the day the year the decade.
I needed to get back on my feet.

But I was there for you --
You said you needed me --
You said we were in it together --

I thought you were the love of my life...

Thanks anyway.

"This is about bringing out the facts about our claim," Moncrief ((said oilman)) said during an interview. "We do not view our agreement with Gazprom as a memorandum of understanding. We view it as a binding contract."

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