February 12, 2005 by AK
Getting a few facts straight
1. Russia recovered from the August-September, 1998, crisis, without material financial assistance from the IMF. This should be obvious from my comments at Winds of Change, the bottom line being the schedule of Russia–IMF inflows and outflows.
2. Chechnya is not a major oil producer, actual or potential. Yet I found this at Flogging the Simian:
Besides the nationalist interests that Russia has in keeping its territory from further dissolution, it’s worth mentioning here that over 10% of all of Russia’s oil comes from Chechnya. There are also major refineries located in Chechnya and the republic is the transit point for several key Russian oil pipelines.
“Over 10% of all of Russia’s oil comes from Chechnya.” Not at all. Russia produced over 420 million tons of oil and oil liquids in 2004, which is about 8.4 million barrels per day; of this amount, Chechnya supplied at most 2 million tons, or 40,000 bpd, which makes up about 0.5%. Even before the way, Chechnya produced a maximum of 12 mm tons per year, or 240,000 bpd, which would now be less than 3% of the country’s oil output. Those fields have been operated for a century already and are understandably depleted. However, the oil is light and lies very close to the surface, which lets Chechens extract and refine it using most primitive technology.
“There are also major refineries located in Chechnya and the republic is the transit point for several key Russian oil pipelines.” There was a refinery in Grozny, but I understand it was destroyed in the war. Russia’s South has excess refining capacity, so the value of just another refinery is hardly spectacular. Also, Transneft, the oil pipeline monopoly, built a new pipeline bypassing Chechnya a few years ago.
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