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Strategies & Market Trends : Investment in Russia and Eastern Europe -- Ignore unavailable to you. Want to Upgrade?

To: P.T.Burnem who wrote (716)	9/24/1998 1:10:00 PM
From: Rob Shilling	Read Replies (2) \| Respond to of 1301

PT, didn't your parents tell you it is not nice to call people stupid ?? Facts: Current export output of LUKOY is around 600,00 barrels a day. That is 219 million barrels a year. At a price of $15 a barrel that yields about 3.285 billion dollars in hard currency revenues. The rest of the production (around 800,000 bpd) is for domestic use. LUKOY has its own gas stations too. Gas prices have already risen to compensate for the ruble devaluation. So most of LUKOY's revenues are hedged against the ruble. Most of its costs are in rubles. As far as the cost of buying drilling equipment. A company that gets at least $3.285 billion in hard currency revenues should have no problem pay for capital expenditures. I only look at LUKOY because IMHO LUKOY is the only transparent and well run oil company. If anything gets nationalized, it will only be unprofitable companies according to the new "communist" economic czar. As far as robbing domestic industry, the government has said it wants to help domestic industry and attract more foreign investment. Sort of the opposite of the IMF. As far as bondholders not getting a good deal. It is called risk. They need to learn to deal with it. Russia's priority is not to make the terms of the default a little better for foreign bankers. They are focusing on other important things like starving soldiers. The Investment bankers in the west will have to wait. Bankers losing money, I like the sound of that !!!