Still hoping that nation-by-nation regulation of globally-connected markets will work

ARTICLE: "U.S., Europe at odds over global financial reform," by Howard Schneider and David Cho, Washington Post, 13 March 2010.

The key bit:

The chief concern is with Europe, the world's other major capital market, where officials want to deal more rigorously with some types of activity -- effectively barring U.S.-based hedge funds from operating there, for example -- while remaining more relaxed in areas where the United States has taken a tougher line.

So no new global rule set. Not too surprisingly, given the speed of recovery.

So the patchwork continues until the right System Perturbation comes along to force something more comprehensive in response.

End of the world?

Nah, just the next iteration.

On the syndicated national radio tonight (The Vantage Point)

With Michael Vail at 6pm CST/7pm EST this evening.

Talking Great Powers.

Listen here live

The archives are found here.

The riser's ego naturally swells

ARTICLE: "Is China's Politburo spoiling for a showdown with America? The long-simmering clash between the world's two great powers is coming to a head, with dangerous implications for the international system," by Ambrose Evans-Pritchard, Telegraph.co.uk, 14 March 2010.

I like this piece. Guy is working it out mentally on the page, and it's worth reading. Very much in the vein of the discussion in which I participated on the BBC World Service radio show two days ago.

I especially liked this bit from Pettis (cited therein), who consistently impresses:

Michael Pettis from Beijing University argues that China's reserves of $2.4 trillion - arguably $3 trillion - are a sign of weakness, not strength. Only twice before in modern history has a country amassed such a stash equal to 5pc-6pc of global GDP: the US in the 1920s, and Japan in the 1980s. Each time preceeded depression.

Counter-intuitive, but smart.

All of this 'shturm und drang" has an air of inevitability about it.

After the too-strong Nixon, we opted for the too-smart Carter as sort of a paralysis-by-analysis break in the action. I think we did much the same with Obama after Bush.

So the weakness perceptions pile up, and frankly, we're due for a bout of that. Good for us, and honestly, not bad for the world. McCain would have fought it tooth and nail, preventing the necessary recalibration (locate ego, insert needle versus locate anger pump and crank like mad!).

Naturally, the riser of the age gets full of himself as a result. Big deal? More just an inevitability, just like the inevitable come-uppance, which can come to China in too many ways to count.

And yeah, that will also be good for China and the world, assuming China can handle the tumult. America does that exceeding well, hence I don't worry about the bad stretches or the weaker leaders. The sins of omission pile up much more slowly than the sins of commission. And they're easier to rectify.

But my gut instinct: whenever I see the hype get that big, and the ego starts swelling, whether we're talking an individual figure or a group or a nation, you just know the come-uppance is nearing.

I don't think the Chinese Politburo really wants a fight. I think we consistently overestimate China's strengths and underestimate its weaknesses--and vastly under-appreciate how the latter keeps their leadership rather nervous and thus careful.

Can the Chinese blow it by doing something truly stupid? Sure. Happens all the time. The key for us is not to lose our cool in response, because we love to FREAK OUT!

The Chinese, on the other hand, really fear letting their inner freak escape, because their history says it does not renew but destroys--damn near everything!

Again, on that score, our system remains our advantage. We can absorb our own stupidity and hubris and self-correct faster and better than others. Typically we soon grow fairly disillusioned with the correction, because we prefer the manic phases to the depressive ones (unlike say, the Irish or Russians or anybody else given to extreme drinking). But we're definitely weird in that way, being a conglomerate gene pool of type-A personalities from all over the world who've inter-bred for generations, producing even weirder types!

Anyway, I say, stay cool on this subject. Tumult will come and corrections will follow. The key--again--is playing it smarter than the average bear--or dragon (or leprechaun, I guess).

[Thanks to Terry Collier]

Nuclear proliferation--the real-world version

IN DEPTH: A High-End Bet On Nuclear Power,"" by Carol Matlack, Bloomberg BusinessWeek, 15 March 2010.

The nuclear "renaissance" portrayed on a map: just over 50 new plants under construction, with China (20), Russia (9) and South Korea (6) accounting for the bulk.

Biggest collection of existing plants? That would be the US with 104. Closest are Japan (54) and France (58).

Russia, China and South Korea collectively have 62 plants currently in operation.

America plans/builds one, just like Iran.

The pullout of combat troops will proceed, but the trainers will remain in Iraq past 2011

WORLD NEWS: "Iraq poll hailed as key step on road to US pullout: 'Milestone' delights top commander; Quest for coalition after successful poll," by Andrew England, Financial Times, 9 March 2010.

The drawdown continues and is expected to pick up pace in May, now that the election successfully unfolded. Naturally, the chunk of America that condemned this effort either from the start or when it got hard (Of course, all supporters must answer to the charge of Adelman's "cakewalk" comment because that jackass prediction binds us all together!) will continue to condemn the entire affair even as it winds down successfully ("What, no Tom Jefferson? Just a bunch of slimey Arab and Kurd politicians?!?"), doing their best to diminish the tremendous and painful evolution of the U.S. military in response to significant--but historically low--losses (to the immense credit of all involved, even as I still blame Bush-Cheney for taking far too long on the shift to COIN).

But here's the quote from a secular Shiite candidate that says the trainers (the 50,000 non-combat that will remain through 2011) will remain for a long(er) time:

Our army is not finished yet. It is not well-trained and not well-equipped. The police and the army are both built on a sectarian basis. They are not yet real national forces . . . We need to rebuild these forces on a professional basis and we need the Americans' help.

This is an enduring reality that we will meet time and again across the Gap: if you want to leave, you need to train your replacements--pure and simple. When you remove a dictator, you create a vacuum. You can fill that for a while, but eventually it must be filled by competent locals.

A diminished burden from what we currently face, naturally, but a burden nonetheless.

Many (opponents of the war, the freak-out artists on Iran) will continue to argue that this enduring responsibility marks the failure of the intervention.

That is complete nonsense. It's the next best problem to move on to. You want "realism"? This is it. It's why I said--and I quote--in the original Esquire article:

As baby-sitting jobs go, this one will be a doozy, making our lengthy efforts in postwar Germany and Japan look simple in retrospect.

I also said this on the hotspot list:

10) IRAQ Question of when and how, not if. • Then there's the huge rehab job. We will have to build a security regime for the whole region.

That still holds too, although now, thanks to our choices, Iran's nukes will be the driver.

The New Core East will get over its fixation on boys versus girls

LEADERS: "Gendercide: Killed, aborted or neglected, at least 100m girls have disappeared--and the number is rising," The Economist, 8 March 2010.

INTERNATIONAL: "Gendercide: The worldwide war on baby girls: Technology, declining fertility and ancient prejudice are combining to unbalance societies," The Economist, 8 March 2010.

"Baby girls are thus victims of a malign combination of ancient prejudice and modern preferences for small families."

True enough, but the push for small families means the world tops out at roughly 9.5B people mid-century, and that is a very good thing that dismays the apocalyptics the world over. In this process, a lot of girls go missing, but so do a lot of boys. China, it is estimated, would have 400m extra people now without the birth-control push. They weren't all girls.

The skewing is clearly regrettable and truly odd from our perspective (although we don't have to go back to far to spot similar nonsense in our past), but it's a temporary problem: a culture that's been overwhelming rural for thousands of years is, in short order, transformed to an urban one. So yeah, ancient prejudices, however backasswards, change more slowly than the economy. Rural folk want sons to provide for them in their old age, whereas, in modern societies, most folk know that it's the daughters that actually take care of you in old age, not the sons. Once you modernize, it's not a matter of brute labor but somebody who actually cares.

South Korea has affected this mind-shift to a certain degree, and it presages similar shifts in China, where already the exporting of unwanted female babies is decreasing--as it should.

No doubt, this is a sad price to pay for Asia's rapid rise, and the resulting imbalances will trigger social tensions for decades. The briefing cites the skyrocketing rate of mixed marriages in Korea, where Koreans are marrying non-Korean Asians because they have no choice. By 2020, it is estimated that half the rural kids will be Kosians, slang for Korean-Asians.

No, no wars will result, and people will consistently choose mixed marriages over no marriages at all, and this will change things in Asia in "inconceivable" ways, even though it's been the norm in America for many decades now (Germans marrying Irish! Italians marrying French! Europeans marrying Africans! Inconceivable! Everything will be ruined!).

Except we only got better and stronger and smarter--and better looking!

I don't mean to make light of this. My family felt strongly enough about the issue to adopt a girl from China.

But this too will pass, the larger good will not be sacrificed in the process, and these societies will actually improve both in appreciating females and the social strengths that arise from the dreaded "mongrelization."

But definitely keep this in mind the next time you hear about the "superiority" of Asian values.

There's dominating at home, and then there's competing internationally--when it comes to media

ASIA: "The Chinese are coming: To a sitting room, mobile telephone or supermarket screen near you soon," by Banyan, The Economist, 6 March 2010.

The Chinese aim to make their flagship media companies serious players globally.

The problem will naturally end up being the large amounts of material that their media simply cannot cover--no-go zones. The propagandistic tendencies of the same, while now far more muted, will also limit appeal.

Yes, the Chinese can bitch all they want about an anti-Chinese bias in the Western media, but it simply reports that which it knows will appeal, and such stories typically will cast Chinese officialdom in a bad light. Why? In a regime where the bums cannot be thrown out via real elections, expect foreign media to consistently aspire to that role which the local media dare not play. Because, in the end, some genuine balance is achieved.

Does this disappoint the bosses in Beijing? Certainly. But if they want Chinese media to do it better, they would need to accept the political consequences.

Short of that acceptance, Chinese news media cannot be taken too seriously, even as it improves. I would never accept it as a serious source of analysis on events in China.

Targeting Iran's gasoline imports

FRONT PAGE: "Oil traders end petrol supplies to Iran as US pressure pays off: Trafigura, Glencore and Vitol stop shipments," by Javier Blas, Financial Times, 8 March 2010.

CORPORATE NEWS: "Shell Halts Gasoline Sales to Iran: Company Is Latest European Energy Firm to Act as U.S. Considers Sanctions," by Guy Chazan and Spencer Swartz, Wall Street Journal, 11 March 2010.

Decent sign.

Larger reality: Dubai-based and Chinese suppliers simply step in and grab the business. One secretive Chinese oil company, ZhenHua Oil, now supplies one-third of Iran's needs.

The new map of shale gas

FOSSIL FUELS: BREAKING WITH CONVENTION: "Europe the new frontier in shale gas rush," by Carola Hoyos, Financial Times, 8 March 2010.

FOSSIL FUELS: BREAKING WITH CONVENTION: "Fears raised over process of extraction: Regulation," by Sheila McNulty, Financial Times, 8 March 2010.

The geographic spread here is impressive (in barrels of oil equivalent):

• Canada with 192B and US with 315B in NorthAm

• Venezuela with 250B and another 50-100B more south on that continent

• Europe boasts 90B, while the Middle East and Africa have far less (based on current estimates; one assumes not much searching has been done)

• Russia possesses 45B and Asia has 200-250B. Australia with a mere 40B

I would treat everything as floors, with NorthAm in the lead only because it's looked harder to date.

Of course, all this extraction is subject to environmental concerns.

WAPO's Howard Kurtz cites my WPR piece on blogging

His "Media Notes" blog, where I've been mentioned before (usually to cite my less-than-stellar journalistic ethics).

The part concerning my column:

I blog, therefore I am

As someone who pulls together this blog every day, I was struck by the observations of one Thomas Barnett at World Politics Review (hat tip: Andrew Sullivan). Barnett says that "generating and maintaining the blog magnificently expanded my professional 'RAM,' or random-access memory storage capacity. Without that upgrade, I simply couldn't write or think at the level I do today, nor could I cover as much of the world or so many domains. Without that reach, I couldn't be much of an expert on globalization, which in turn would seriously curtail my ambitions as a grand strategist -- because nowadays, strategic thinking requires a whole lot more breadth than merely mastering the security realm. To be credible and sustainable in this complex age, grand strategy requires a stunning breadth of vision when judged by historical standards. So as far as this one-armed paperhanger is concerned -- no blog, no grand strategist. . . .

"I have found that to flex strategic muscles, it's crucial to stay above the minute-by-minute fray of the blogosphere. Blogging can be highly addictive, and chasing stories can have a crack-like effect on one's brain. Whenever I've done that in the past, playing online virtual reporter, I found I spent a lot of time correcting my own mistakes as well as those of others. It's a great approach for becoming a professional fact-checker, but it does not build up your strategic or writing skills. There is a serious gulf between reportage and strategic analysis.

"That's also why I gave up feeding the blog on a real-time, everyday basis a couple of years ago. Coincidentally (or not), the volume of my posting increased noticeably -- as did the quality, according to my most trusted readers. . . . As soon as the blog stopped owning me, I finally began to master the blog form."

I, on the other hand, am still a slave to this thing.

All well and good, but Kurtz gets paid to blog!

Brazil envy. Get some!

ARTICLE: "Mexico's Brazil Envy: Hoping History is not Destiny," by David Agren, World Politics Review, 22 March 2010.

A real sense of Brazil's rising influence in LATAM, as well as a measure of how poorly Venezuela under Chavez compares. I mean, does ANYBODY have Venezuela envy?

To me, Brazil envy is a great thing. The region needs more of it.

The smuggler's life: NorKo

WORLD NEWS: "N Korea draws on tobacco to generate hard cash: Re-export of UK cigarettes revealed; Pyongyang seeks sanctions loopholes," by Tom Mitchell and Pan Kwan Yuk, Financial Times, 9 March 2010.

The Kim regime, hard up for hard currency earnings, has taken to re-exporting Brit cigs throughout Asia. Pretty low-grade criminality, but if the regime is resorting to that, you can imagine how hard up it is.

The usual NorKo tricks involve counterfeit US paper.

Checking up on Chinese IPOs

FTfm: "Investor alert to suspect Chinese IPO prospectuses: A large number of Chinese companies are being sued in the US," by Elizabeth Fry, Financial Times, 1 March 2010.

The US, not Hong Kong, remains the primary destination for Chinese companies doing initial public offerings.

The friction here? More and more companies are being sued in US courts for prospectuses that contain false or misleading info.

I say this is a good thing for Chinese business in general--raising the transparency bar.

I'll be on the BBC world radio service's "World Have Your Say" program at 1300 EST Today

First time using Skype versus a landline.

Go here to listen live

Subject is:

Has the West provoked a tougher China?

Krupa Thakrar-Padhy | 09:03 UK time, Friday, 2 April 2010

From Copenhagen and the Dalai Lama, to the execution of Akmal Shaikh and Google, it's hard to keep China out of the news. In this week alone, China's been back in the spotlight over the Rio Tinto verdict, the Mekong River and Beijing's indecision over new sanctions on Iran, another strain on US-China relations.

So is this China being difficult? Or is the West to blame for China hardening its stance? That's the line from Dr Jian Junbo at Fudan University in Shanghai.

'Outsiders believe that China is hardening its foreign policy, citing a number of recent events. But from China's viewpoint, the United States and Europe have provoked it into taking a tougher position...

...The US and Europe must remember that China is like an adolescent who wants to be admitted to an adult's world, hoping for more independence and respect. If the West imposes unjust criticism or responsibility on China, it could be pushed it into a corner from which it would need to fight its way out.'

Is China simply taking a defensive rather than offensive position?

Dr. Junbo adds that at the core of China's attitude lies its desire to protect Chinese public interests. And this editorial in China's Global Times agrees.

Is there anything wrong with China's putting national interests first?

This article in The Hindu believes that we need to start trusting China more.

And Dr. Junbo offers some words of advice to the West in the same vein,

'If there is a change in China's foreign policy toward the US and European countries, it's not in principle but rather in style, and the fact that China is now being criticized for "toughening" its foreign policy is actually evidence that the West is listening more to China's voice.'

Is it time to give China a break?

Go here to listen via podcast: http://www.bbc.co.uk/podcasts/series/whys/

My post-broadcast comment: The show's producers always push the remote participants to jump in whenever they want, but it never happens. There's just no competing with panelists in the studio (who can cue themselves up visually with the host while you, the remote, cannot, plus there's a couple seconds lag time, so even if you try to interrupt, you'll invariably end up speaking over someone, which makes you come off like the "ugly American"). As such, getting the remotes to pipe in remains the job of the host. This time I got four chances to speak--each one in response to the host directing it my way,which is pretty normal, I would say, for a group of six people plus a host speaking over an hour, factoring in the several callers and the news break in the middle. Was I particularly happy with my performance? It was so-so in the sense that I didn't really have questions to respond to, just a lot of fairly reasonable statements to follow up on. So your points tend to be mini-statements versus genuine dialogue, which is simply too hard to achieve with six voices, especially when half are remote. I like the show well enough, but I feel like it tries to include too many voices in one hour and, as such, even the speakers tend to come off as just another call-in versus the dynamic you want to see emerge on a show like this, which is point building on point. For me, I just never get warmed up enough to get into any serious flow: you speak for 2 minutes, then sit for 12, and repeat until the show ends.

Still, it's the Beeb, so I tend to say yes no matter the program.

Gosh! The borderless world that we all dreamed about isn't happening!

ANALYSIS: "Closing the frontier: The internet; Google's showdown with China's censors highlights increasing official efforts to control the web, fragmenting the dream of a borderless world," by Richard Waters and Joseph Menn, Financial Times< 29 March 2010.

COMPANIES & MARKETS: "Censorship fears over China spam texting curb: IBM develops system for China Mobile; Move could help track social network groups," by Kathrin Hille, Financial Times, 25 March 2010.

US VERSUS CHINA | GOOGLE: "Realism lies behind decision to quit: Beijing would never have allowed the US company to dominate," by Richard Waters and David Gelles, Financial Times< 24 March 2010.

OPINION: "Leaping the Great Firewall of China," by Emily Parker, Wall Street Journal, 24 March 2010.

Please! The "borderless world" dream was always just that--a fantasy. States do not go away with globalization, because the most globalized societies and economies feature the largest and best governments, meaning plenty of rules to regulate all that connectivity.

Equally goofy was the notion that all states in the world would simply take the Internet (and its dominant companies) strictly on our terms just because we invented it. As has been my mantra since PNM: everybody wants the connectivity, but damn near everybody likewise wants controls over content--to include making sure the bulk of it isn't controlled by dominating foreign would-be monopolists.

Just because China doesn't accept the notion that Google should control the bulk of searches in its market doesn't meant China rejects connectivity. Controlling those searches and all the biz intell they create is a huge proprietary asset that China wants to see go to its own flagship companies.

Yes, the underlying fight over censorship is real, but it pales in comparison to the competitive desires here. Ultimately why Google leaves is because it saw little market opportunity and more PR opportunity in making a principled stand--fine and dandy. But let's not pretend that China's rejection of Google's efforts to establish a near-monopoly there represents a great defeat of the Internet. If anything, it says how much Beijing recognizes its economic value.

The Internet becomes a primary medium for developing a nation's economy, so duh! Rules will be applied country-by-country, and every semi-intelligent government will do everything it can to stack the deck for local players. To expect otherwise is dreamy indeed.

So far as the censorship game goes, I continue to bet on the ingenuity of individuals. Tell me I can't use certain words and I will invent euphemisms galore.

But yes, authoritarian governments like China will continue to fear spontaneous mob activity of any sort that's generated through telecommunications channels. China's government remains deeply in deficit when it comes to capabilities for responsiveness to its citizenry, so as those citizens leap ahead in connectivity, the government naturally fears being overwhelmed by their signaling capacity--especially when it stems from deep-seated anger (which the Chinese people have plenty of).

Meanwhile, new technologies and platforms continue to emerge that will bedevil Chinese efforts to control conversations, and the U.S. should encourage, as Parker argues, the Chinese people to continue accessing information from outside China--just doing it the reverse of the way that Google attempting (instead of bringing the world to the Chinese, bring the Chinese to the world):

In other words, U.S. companies can set up shop outside of China but make it as easy as possible for the Chinese to access their services. Call it Twitter diplomacy.

The details as presented here:

The fact that Chinese can access this service has much to do with Twitter's design. Twitter has an open application programming interface, or API. Twitter's API allows people to post and retrieve tweets on sites other than Twitter. "Coders in China can still find wholesale access to twitter.com blocked," says Jonathan Zittrain, co-director of Harvard's Berkman Center for Internet and Society. "The idea is that coders elsewhere get to Twitter, and offer up feeds at their own URLs--which the government has to chase down one by one."

Other help: safer and cheaper virtual private nets that allow Chinese to access the Web as if they were outside of China. Google, Parker points out, can leave China whenever it wanted. The average Chinese cannot "walk," as of yet, and this, as much as the principled stance, is what awed most Chinese regarding Google's pullout.

So the struggle continues. But take heart, realists always knew that the Internet was going to have to join the world, as it were, and not the other way around.

Sullivan on my WPR "blogging" column

Andrew says my analysis is "sage and sobering."

A lover of alliteration, I absolutely approve.

"Sobering" probably refers to the grind argument. Sullivan would know that, pumping as he does so many posts every day (truly stunning).

Alas, he gets to thank two staffers!

The combination resource/corruption curse: How determinant?

WORLD NEWS: "Kazakh Spat Casts Light on China Deals: Exiled Banker Alleges Chinese Oil Firm Routed $166 Million to Associate of Top Oil Executive, as Part of 2003 State Sale," by Guy Chazan, Wall Street Journal, 27-28 March 2010.

FRONT PAGE: "Sinopec calls on Beijing to target corrupt foreign business practices," by Patti Waldmeir and Peter Smith, Financial Times, 27-28 March 2010.

COMMENT: "Resource wealth need no longer be a curse," by Mats Berdal and Nader Mousavizadeh, Financial Times, 25 March 2010.

China's commanding position in Kazakhstan's oil industry was achieved with a lot of bribes, not exactly new news. Meanwhile, Sinopec calls on the Beijing government to crack down on foreign corrupt practices inside China.

A bit of the pot calling the kettle black? Certainly. But such corruption costs everybody, no matter where it happens. It simply raises the hidden costs of doing business, something I'm sure Sinopec is well aware of in its own overseas dealings. You simply end up paying above market prices.

Can such cycles be broken? Yes, argue Berdal and Mousavizadeh. The way to make resources work for local states is to build an investment climate based on transparency and accountability--aka, rules. That's hard to do in a boom-and-bust climate, the typical bane of commodities markets.

So the real advantage presented by China's and India's growing dependency on African resources is the long-term timeframe:

The reality is that the principal private-sector opportunities in many post-conflict societies are associated with natural resources and require long-term investment, a high tolerance of political and financial risk, and the ability to mitigate that risk through state-backed preferential financing and political support. For those able to attract it, macro-finance is compelling as a matter of economics, politics and national dignity.

In sum, the "private-sector" version of investment that comes in form of China's national energy companies is exactly what Africa needs right now. Will it be the best model over the long run? Not with the corruption that tends to come with it, but it beats the purely private-sector model that the West has mounted in Africa in the recent past, which came with plenty of corruption but not the same staying power or financial heft.

In short, China provides a Long and Big Bang that the West simply cannot muster, and that's a good thing--relative to everything else. It's the next best set of problems for Africa to endure--a distinct improvement over the past and a potential bridge to a much better future.

The courting of money flows remains a two-way street

POLICY IN CHINA: "Beijing Looks Overseas for Pension Growth," by Victoria Ryan, Wall Street Journal 30 March 2010.

MARKETS & INVESTING: "Sovereign wealth funds courted in debt sales: Governments use fresh strategies to woo new global investors," by David Oakley and Gillian Tett, Financial Times, 25 March 2010.

China is getting older, and so its national pension fund seeks to more than double its overseas investments over the next five years to almost $300B.

Why?

It's the pressure China faces to build up the fund as the retirees accumulate. By 2050, China will have an elder population roughly equal to our entire population--400 million.

For now, the fund's overseas exposure is only about 7%, well below the government-imposed limit of 20%.

Bottom line: "the pension fund isn't satisfied with the investment options at home."

Such trends portend good news for a West eager to court the East's largest wealth funds. The reality of the West: simply announcing a bond auction and then waiting for foreigners to show up in sufficient numbers no longer works. So road shows are in order, and sovereign wealth funds become a primary target.

Looks East meets Looks West

ARTICLE: "India and Saudi Arabia Deepen Ties," by Saurav Jha, World Politics Review, 29 March 2010.

Sharp piece about India's diplomatic push to boost strategic partnership with Saudi Arabia: Singh's "Look West" policy meets Abdullah's apparent "Look East" policy.

Worth reading if only to keep abreast of India's increasingly ambitious diplomacy, which, like Turkey's, strikes me as very wise.

Russia scares off another Western oil company

MARKETPLACE: "Conoco to Pull Back From Russian Partnership," by Jacob Gronholt-Pedersen, Wall Street Journal, 24 March 2010.

Another bad sign for Putin & Co.: ConocoPhillips exhibited supreme patience with the Russian energy market. Now it's pulling as much as half of its ownership share in Lukoil Holdings (we're talking about $5B). This was a rare successful partnership.

Bottom line: Conoco found it just wasn't making any headway on new discoveries in Russia. The oil is there, the opportunities apparently not.

As usual, when you want all the control, you end up with less reserves.