Profiting from Putin

As noted yesterday, Russian President Vladimir Putin has made two brazen moves on the energy front…using courtroom maneuvers to seize control of the last two remaining energy projects in Russia still in the hands of foreigners.  One of them is a huge natural gas field that will likely fall into the hands of Gazprom, the Russian gas giant.

The folks at Stratfor note that Gazprom is slowly winding down its program of subsidizing gas to the people of Russia below cost.  Domestic consumption currently eats up 70% of Russia's gas production, and Putin wants to bring that number down so he can export more.  Dan Amoss from Strategic Investment passes along this observation:

It seems that Gazprom must start acting like a private enterprise and retain
its profits so it can replenish its eroding capital base. This is a problem
for any National Oil Company that serves as a honey pot for social spending
initiatives (i.e. PDVSA in Venezuela). Large capital investments will be
needed to offset its old, rapidly depleting gas reserves … all the more
reason to scout out the best international oil service companies.

Which is exactly what Dan's been doing over the last several months.  You can access a full report on Dan's latest pick by subscribing to Strategic Investment now.