Goldman Sachs dumps on Alaska while investing in Russian Arctic oil - Must Read Alaska
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Monday, April 19, 2021
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Goldman Sachs dumps on Alaska while investing in Russian Arctic oil

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While Goldman Sachs, one of the largest investment enterprises in the world, has caved to radical environmentalists by saying the company won’t invest in Alaska’s Arctic oil, it’s investing heavily in oil development in the Russian Arctic.

Goldman Sachs, in fact, is investing in unregulated dirty oil.

[Read: Goldman Sachs redlines Alaska]

The bank is pouring its resources into the independent Irkutsk Oil Company, known as INK. Along with the European Bank for Reconstruction and Development, Goldman Sachs is a minority shareholder in INK, which operates the Yarakta oil field in Irkutsk, as well as in Republic of Sakha (Yakutia) in Siberia.

In Russia, environmental laws are merely suggestions. There is little enforcement and the industry is notorious for leaks, spills, and contamination, especially in far-flung Siberia. Corruption is just a cost of doing business in Russia, and Goldman Sachs is a party to that system of doing business, and the U.S. government can’t do a thing about it.

“INK is not subject to the U.S. sectoral sanctions that apply to Russia’s biggest energy firms and which place restrictions on the type of financing they can attract from Western creditors. INK’s minority shareholders include Goldman Sachs and the European Bank for Reconstruction and Development (EBRD),” according to a report from Reuters in April.

[Read: Upstart Russian oil company with Goldman Sachs backing]

Goldman Sachs International has a 3.75 percent stake in INK, which works in both the Irkutsk region and the Republic of Sakha (Yakutia) in eastern Siberia.

INK told Reuters that it plans to invest $3-4 billion into the Arctic oil field over the next three years, and develop more of its gas business with four new processing plants.

Building up the Russian oil industry while taking a pass on Alaska’s Arctic is just another calculation on profitability for Goldman Sachs. But its decisions, profitable as they may be, have global consequences, both environmentally and geopolitically.

Earlier this year, when Iran’s oil was cut off from Syria by the impounding of an Iranian tanker, the war-torn country looked to Russia for help.

Analysts predicted the move would make Syrian President Bashar al-Assad even more dependent on Moscow and less able to withstand Russian demands. Russian oil, then, makes Russia more influential in that war-torn region of the Middle East.

“The Kremlin has sought to wield the main influence over Syria and reap geo-strategic and business benefits from its military intervention in the eight-year Syrian war and its propping up of the Assad government,” according to Voice of America.

[Read: Goldman Sachs-backed Russian oil firm plans expansion]

Goldman Sachs has a history of making deals with some of the world’s biggest polluters and baddest political actors. People like Moammar Qaddafi in Libya.

[Read: Hot Mess: How Goldman Sachs lost $1.2 billion of Libya’s money]

According to Goldman Sachs’ oil analyst Michele Della Vigna, there’s still money to be made in Big Oil. “In our view, the first wave of final investment decisions will likely take the form of brownfield developments with quicker payback, particularly in West Africa, the Gulf of Mexico and the North Sea. We should see a strong recovery in the number of projects in 2019 and 2020, led by Big Oils’ deepwater and liquefied natural gas investments. We expect roughly $120bn in LNG projects during those two years as the industry catches up with the production gap resulting from four years of low investments and strong underlying demand,” she said, in a Goldman Sachs publication.

In other words, the company is still investing in oil. But it’s investing in other countries, where regimes are corrupt and environmental organizations don’t have influence.

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Suzanne Downing had careers in business and journalism before serving as the Director of Faith and Community-based Initiatives for Florida Gov. Jeb Bush and returning to Alaska to serve as speechwriter for Gov. Sean Parnell. Born on the Oregon coast, she moved to Alaska in 1969.

Latest comments

  • I’m sure there is a dollar or two to made here. One way I can think of is that not investing in Alaska makes us hungrier and more amenable to future deals that make these ploys all worth it. Or maybe they’re shorting in North Slope Crude this week. Having a State so dependent on the vagaries of feckless speculators is going to lead Alaska down a dark path. Stop chasing the high.

  • The virtue signaling is strong with Goldman-Sachs.

    -Yoda

  • Alaskan politicos need to listen to the youth in AK.
    Without focusing on clean energy in America, there will be a natural divestment by U.S. based bankers and even foreign traders due to the huge pressure of the “resistance”.
    AK has the potential to turn the corner and make it to the next level of opportunity but the roadblocks and hurdles of leadership stand in the way.

    • Steve,
      I believe you should say the “roadblocks and hurdles of ‘leftist’ leadership”. That’s the “leadership” blocking progress in Alaska. With the attempts by outside and local leftists and leftist organizations trying to turn Alaska into another liberal stronghold, reason dictates the blame be put where it belongs. Not on conservative leadership trying to save Alaska. Is your “swamp boat” sinking? Are you depending on “youths” to save Alaska? Either way, lots of luck there. Our current crop of “youths” are, for the most part, aspiring leftists, with, of course, exceptions.

    • Steve, some ” clean energy” is good other clean energy is just stupid for Alaska. Hydro Electric is best . Oil is indispensable, especially for transportation of individuals. Nothing is cleaner or more efficient than jet travel. Oil is your friend, Steve. Being cold really sucks. The resistance you speak of is really a form of mass hysteria.

    • This listening to “youth” thang is ridiculous.
      I raised 6 kids born and raised here in the Interior. They’re good kids – well educated, ( mostly not government schools; a few none at all, others home/private/gov), but I’ll tell ya:
      If I had listened to everything they said or thought at their most retarded ages of 15-16 or so, I’d have been the idiot. They were “smarter” when they were 8 or 10. They were “smarter” when they were 18 – 20 +. But 14-17 or 18…they were, aside from academic and intellectual ability, freakin’ stupid and thought they knew a lot more than I did.

      And my kids were pretty darn politically astute because of me, but they weren’t angels either. They are all hard workers. They don’t fit the stereotype of millennials.
      But this kids running the show thing – and particularly its advocates – is the most idiotic thing of all.

  • What is the “next level of opportunity” for supporting our populace? And, what do people do for a living? How does the sate support it’s welfare PFD program and uncontrolled budget in the short term?

  • Have you been able to verify whether Goldman is making new investments in INK (separate and distinct from the investments that INK may be making going forward) or is their investment in INK part of a portfolio they held prior to their recent announcement that they are discontinuing investment in arctic oil exploration and development going forward?

  • I am confused…. I thought “Trump=Russia” in 2016 but it was really “Hillary+Russia+Sachs” in 2016? Where’s that reset button?

  • Very good reporting Suzanne! We should not do business with these people in any of the State corporations or public bond offerings.They are under indictment in the huge Malaysia 1MBD scandal as well. So hypocritical to single out investment in Alaska. The fact that they always support Democrats is irrelevant but just thought I’d mention in passing.

  • Always support democrats. I guess Trump doesn’t care. First place he turned for economic advice.

  • The April reuters article states Goldman Sachs invested in 2013.

    • Now we get to the truth. GS invested in the project in 2013 when we had an administration that was interested only in selling the USA to the highest bidder to line their own pockets. Isn’t it wonderful how the more you dig the more real truth becomes?

  • Goldman Sachs former CEO Lloyd Blankfein wanted a job in Trump’s cabinet. Trump shut him down. Blankfein hates that Trump wants MAGA trade deals and Goldman wants China trade deals.

    CNBC headlines like this: ‘Goldman CEO Blankfein jabs at Trump: ‘Despite all the sh*t, American values will shine through’

    Lloyd has a Napoleon complex.

    Any wonder why Goldman Sachs is shooting flaming arrows at Trump (and Alaska)?

  • We’re in a snit about Goldman, like, totally mad… triggered!
    .
    So the Walker-Goldman Sachs-Communist China consortium secret (remember the secret part?) deal to build a gas pipeline to ship product too expensive for the world market fell through.
    .
    Good news is Alaska’s Permanent Fund won’t be mortgaged for collateral… for the moment.
    .
    Maybe Alaska’s lobbyist-legislator team’ll hire Hunter Biden in time to fix things; remember Hunter does deals with the same Bank of (Communist) China and his Dad’ll help when he’s President.
    .
    What if Goldman’s attitude toward Alaska simply reflects how first-world investors deal with third-world dictatorships?
    .
    Like productive Alaskans, Goldman management may have realized dealing with a clumsy, egotistical, lobbyist-legislator team bent on financial self-destruction was a bad idea.
    .
    Unlike productive Alaskans, Goldman shareholders aren’t stuck with a board of directors intent on seizing shareholders’ dividends, bankrupting the company, disrupting its major income stream, corrupting corporate governance, violating its own bylaws, financing infanticide, destroying its
    education system, undermining its CEO, and transforming the company into a subsidiary of Communist China.
    .
    Undermining the CEO? Governor Dunleavy extolls the virtue of investing in Alaska while Peoples Co-Governor and Imperial State Senate President Giessel and friends plan what for productive Alaskans?
    .
    Maybe Goldman figured half the population of Anchorage’s biggest city working hard to separate themselves from their city government is a sign something’s going badly in our Workers Paradise, not what an investor likes to see.
    .
    If productive Alaskans have no idea where their government’s incompetence, malfeasance, and mismanagement stops, or even if it can be stopped, how can they expect Goldman to pour money into a venture that could well be wrecked by the same greedy gang of thieves?
    .
    Sure, the Communist Chinese want to help. Our big old Permanent Fund is up for grabs by anyone with chutzpah to do it. And once they’ve bought their way into Alaska’s government, culture, infrastructure, what exactly stops our BFF’s, the Communist Chinese from grabbing the PF, plus anything else they want?
    .
    Point is, first we gotta drain our Swamp… second, open Alaska for business. Governor D’s trying to do it, let’s help him. Then Goldman et al might be persuaded to come back.
    .
    Could happen… if we want it to happen.

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