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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Rob Shilling who wrote (42560)	4/18/1999 10:15:00 PM
From: Aggie	Respond to of 95453

Rob, hello again, Well......everything you say is true when strung together word by word, but a ways off when I read it from my perspective. "Yes there are transparency issues" - I agree: Like when the Russians routinely changed the law of the land at the Dumas level to make production and transportation of oil not only unprofitable for JV's, but costly, thus driving a stake through their heart after they've ponied up with the initial millions. Yeah, I'd say there are transparency problems all right - and that's only one example from one entity. When I first started in Kazakhstan, I went to the morning drilling meetings the Kazakhs were conducting. It took about 6 months before the deep seated, suspicious hostility that the Kazakhs had been trained, since birth, to harbor against Americans began to break down. Once this barrier was breached, we began to work co-operatively to our mutual benefit. Nothing in the FSU is as it first appears. My interpreter, for example, was a slight, unassuming young man with thick glasses who incidently was ex-KGB and could field strip a Kalashnikov and re-assemble it, with his eyes closed, in 45 seconds. The effect of the world economy and the relative standing of the ruble is only one variable in an incredibly complex social dynamic whose structure and organization a westerner can only begin to interpret. This is the single biggest reason that the western ventures fail - a lack of understanding of the Russian system as it continues to evolve. I say again: Russia and the FSU remain incredilbly seductive natural resource prospects - but the western investor should bear in mind that these are sophisticated, educated people who are living by their wits in a harsh environment where everything is possible. IMHO investment in this arena should be treated as having potential being at best fractionally proportional to risk. Good Luck, Aggie Say, by the way: After reviewing this, I am struck that it may appear a bit condescending to you - that is not my intention at all, I must say that I have never had a deeper emotional connection to a project than the one I worked in the FSU. They are amazing people and I would go back tomorrow - it was an incredibly challenging experience.