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The Guardian: Booms, bonuses and bankruptcy

David Teather and Angela Balakrishnan
Saturday December 30, 2006

Behind many of the year’s stories was the shifting world order: the emerging power of Russia, India and China.

The year began with Russia cutting gas supplies to Ukraine, raising fears of shortages and soaring prices across Europe. At the end of the year Shell was forced by the Russian government to reduce its stake in the world’s biggest liquefied gas project. Both raised fears about the Kremlin using the country’s natural resources as a political weapon as well as highlighting concerns about both the security and cost of energy supplies as emerging economies began to compete for resources.

Over the summer, Sinopec of China agreed to pay $1bn for the right to explore for oil in deep water off Angola, shocking the west, which fears it could be left behind in a scramble for assets. Gazprom, the Russian gas supplier, signalled its interest in buying a business in Britain.

The rapidly growing economies of China, India and Russia were also behind the surge in commodity prices. China is building cities and infrastructure at an unprecedented rate. Early in the year, it overtook Britain to become the world’s fourth-largest economy behind the United States, Japan and Germany.

The year offered a final bookend to the Enron saga, five years after the Houston energy firm combusted. The company’s former bosses Jeffrey Skilling and Ken Lay were finally brought to trial and both were convicted on numerous counts including fraud and conspiracy. Skilling has now begun a 24-year prison term. Lay died of a heart attack in July.

The above are extracts. To read the entire article go to…,,1980182,00.html

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