No Russian oligarch has had a longer career stretch than Mikhail Fridman -- enfant terrible, tormentor of foreign titans and, according to Forbes, the 43d richest man in the world. Now, this last pillar of no-holds-barred Russian capitalism is under threat, at least in the oil industry, where he has earned many of his billions -- challenged in the early stages of his latest unsentimental caper. Are we witnessing the final act in two decades of some of the world's rawest displays of capitalism? If so, it will be another sign of President Vladimir Putin's crusade to wring out the disorder that has always vexed him. Russia may become more boring with a tamer Fridman. But in Putin's view, that is a small price to pay for the predictability he cherishes.

The crisis for the 48-year-old Fridman, a pudgy man with an impish grin, has unfolded over the last few days. Last week, he unveiled a typically breathtaking resolution to a long-standing row with BP, his long-time partner on the Russian oil patch. If it worked, AAR, a financial group he leads, would end up with probably the largest single shareholding of the British oil company. And Fridman seemed sure it would -- people close to the Russian told me that Fridman enjoyed the Kremlin's blessing. Only, Fridman seems to have been misinformed: On Monday, his initiative was contested by Rosneft, Russia's powerful state oil company. Rosneft chairman Igor Sechin, Putin's chief oil advisor, announced that he would bid for BP's share of TNK-BP, the nation's third-largest oil producer, in which AAR and the British company are 50-50 partners. Sechin released a bland statement calling acquisition of BP's stake "an attractive commercial proposition" that will "complement [Rosneft's] existing portfolio and create value for all stakeholders." But for those who speak business Russian, the message was clear -- "bid," when it comes to a Putin-linked company, means "buy."

Playing on the Russian oil patch is a definitively courageous act - Putin regards it as a state preserve, and Fridman's 50-50 partnership with BP always crossed the line. The Rosneft move appears to be a signal of game over, according to close observers of the Russian industry with whom I've spoken -- the Fridman group's share of TNK-BP seems likely to be swallowed up by Rosneft along with BP's, with terms to be determined, and he subsequently will be pushed entirely out of the oil sector.

Should this scenario play out, it would not be your standard oligarch hanging, the string of untimely departures witnessed in the early years of Putin's first turn at leadership -- the 2000 flights of media tycoon Vladimir Gusinsky and industrialist Boris Berezovsky, and of course the 2003 imprisoning of oilman Mikhail Khodorkovsky. Fridman would retain the bulk of his fortune, his financial and telecoms empire, and most important his freedom and right to move unencumbered in and out of Russia. The same would go for Fridman's three partners in the AAR consortium -- Russian-American industrialist Len Blavatnik, German Khan and Viktor Vekselberg. Yet, by circumscribing Fridman's activities, Putin would arguably draw a final line under the age of the iconic post-Soviet oligarch, the hard-bitten, ultra-opportunistic, and ruthless men who came to symbolize Russia's chaotic 1990s, and were demonized once Putin took power in 1999. Putin is "totally fed up with [Fridman's] behavior," said a Moscow-based banker who did not want to be quoted by name. He went on in an email exchange: "Fridman has miscalculated Putin's reaction here. Putin does not like nor trust the belligerent and (his mind) unreliable oligarchs. He wants them out of the oil business."

In most annals of the era, Khodorkovsky's arrest -- after Putin decided he had been double-crossed -- marks the start of the post-oligarch era. In their place are approved oligarchs -- gas magnate Gennady Timchenko, metals titans Oleg Deripaska and Mikhail Prokhorov, among others -- who either serve specific purposes for Putin, or whose latitude is confined. Then there is Fridman, who traveled with the 1990s outcasts but managed to survive and keep up his devil-may-care ways, even in the most strategic sector of all -- oil -- always careful to assure Putin that he was only conducting tough business.

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The geopolitics of picking winners: Scorn is routinely heaped on the George W. Bush Administration for allegedly being in the pocket of Big Oil: Vice President Dick Cheney dined regularly with his old buddy Lee Raymond of ExxonMobil, Steve Coll writes in his new book on the company, and otherwise handed over the henhouse to the foxes. But this is not strictly true: Bush also put the government decidedly behind the development of technologies that could upend Big Oil -- battery-powered electric cars, and especially hydrogen fuel-cell vehicles. Positioning new technologies to challenge the economics of incumbents is always a tricky business, and so it has been with these non-fossil fuel approaches to locomotion. But Bush (pictured above at a hydrogen fuel cell event in 2003) decided to pour hundreds of millions of dollars into them anyway.

The laissez faire puritans don't like it, but governments around the world these days are in the business of choosing what industries and companies will win the day. The Brazilians like sugar ethanol and Petrobras, the South Koreans favor Samsung and their other national champions, and the Chinese hand-select for the entire economy. The common denominator in these examples is that a business decision is made by government, and generally maintained through successive national leaderships. Not in the United States, which has zigged and zagged according to the whims of who is in the White House or Congress. When critics of whatever stripe tell you that a given administration "has no policy" on (take your pick: Russia, energy, the Middle East), that is generally what they mean -- the White House has diverged from a prior policy that the critic embraces.

So it has been with the effort to upend how Americans transport themselves from place to place -- the Obama Administration's tastes have been the opposite of its predecessor's: From the beginning, it favored battery-driven electric cars, and shunted hydrogen fuel-cell vehicles to the back-burner. In fact, these are sister approaches -- both use electricity to move a car. Only, batteries store electricity produced elsewhere, while fuel cells produce their own from fuel (in this case hydrogen) stored on board. I have heard some disappointment from the fuel cell crowd -- it makes no sense, they say, to spend hundreds of millions of research dollars on hydrogen fuel cells, then overturn the process over policy. If your intuition tells you that batteries are a better bet, throw money that way too, but keep them going on parallel tracks. All of the above, as Obama describes it, ought to include fuel cells.

As I write this week at Slate, this line of thinking appears to have been heard in the Administration, which seems to have warmed up toward hydrogen fuel-cell vehicles. But to the degree that this change in attitude is carried through, it will have a steep climb. Fuel cells have the advantage of no range anxiety -- they can go 150-250 miles on a hydrogen fill-up, then refuel in a matter of three to five minutes. Only, while Germany is building hydrogen refueling stations like gangbusters, there are almost none in the United States. (There need to be about 11,000 at about $1.5 million each, according to General Motors.) The conventional thinking -- which I do not totally accept -- is that they may have to be stand-alone stations, because incumbent oil companies have no incentive to add hydrogen to their gas pumps when they themselves do not produce this fuel. From my side, I think that will probably be the case in the beginning, when the market is being formed; but once it gets going -- if it gets going -- entrepreneurs will step in and incentivize incumbent station-owners to add hydrogen tanks.

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On the shale gas patch, the twain decidedly do not meet: Shale gas drillers, on the receiving end of two years of withering attacks by anti-fracking elements, have launched a counter-offensive. A special-purposed group of 11 big industry players including ExxonMobil, Shell, Chevron and Anadarko issued an eight-page code of conduct for hydraulic fracturing in Pennsylvania and New York (pictured above, outside the town of Waynesburg, Pa.). I spoke with Anadarko CEO James Hackett, a leader of the group, before the Obama administration's release today of somewhat stiff rules governing fracking on federal land. As I wrote at EnergyWire, Hackett said the group wished to "set a good example" -- a high bar for all operators on the patch in order to reassure public opinion. But Hackett's vituperative description of critics suggests little room for conciliation between the sides. In a nutshell, Hackett sees himself as a patriot, and his critics as anti-science extremists, and worse.

The industry embarked on the standards as part of studies requested by the Department of Energy and a diverse group called the National Petroleum Council. But it was all against the backdrop of hyper-critical media like "Gasland," Josh Fox's much-watched 2010 documentary on fracking. The companies felt that shale gas "can be developed responsibly, but you had a slew of articles coming out from the New York Times. Whether they were fact-based or not didn't seem to matter," Hackett told me. "The Cornell study, the Duke study, the hysteria that people were trying to create around hydraulic fracturing, which was scientifically misplaced."

So there was industry interest in counter-attacking, Hackett said. But once they were into the process, the CEOs started thinking more broadly that they had something to gain by conceding to regulation. Hackett:

There was a feeling that this could be a useful way for us to proceed long term, because the truth is that the technology does keep changing and the practices keep changing. And we have every bit or more a stake of how the regulatory process evolves and society's acceptances of our industry. We have a bigger stake than I'd say than anyone else but the citizenry that we want to make sure is educated about what the benefits of this are so that they don't just say, ‘You lose your license to operate,' without understanding what it means when they say that.

Read on for more of James Hackett, and the rest of the Wrap.

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There is a comforting thought for those alarmed by Vladimir Putin's large electoral triumph, in which he suggested that his opponents are traitors and foreigners out to commandeer the Russian state. It is oil and gas, which while they fuel Putin's confidence, could also step in and serve as a leash on his tendency to over-reach.

Putin's history closely tracks the inclination of petro-rulers to shift from hubris to malleability with the decline of oil prices. Oil and gasoline prices are currently high, but they also seem close to a tipping point at which consumer tolerance could break, demand fall, and prices plunge. Deutsche Bank's Paul Sankey is forecasting a more-than 25 percent long-term plummet from that inflection point, which he puts at $135 a barrel for European-traded Brent crude. If this scenario materializes, look for Putin to revert to a friendlier form.

Are there other under-appreciated aspects to Putin's return to the Kremlin? I asked a few O&G readers specializing on Russia to weigh in. Andrew Kuchins, who runs the Russia program at the Center for Strategic and International Studies in Washington, replies that insufficient attention has been paid to the impact for U.S. foreign policy in places like the Middle East. Kuchins writes:

While Putin may be conservative and pragmatic by nature, with the United States his emotions are more raw and palpable. We are likely to need Russia's support even more in the future in management of the Afghan drawdown and Iran, and his bargaining is likely to be tougher. And if domestic troubles intensify and he feels more threatened, certainly that will not bode well for ties with Washington. Already we see inclinations for closer ties with Beijing, and, in the context of the Arab Spring, with Iran as well. It is not hard to envision further drift in this direction given certain domestic and/or external developments.

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The news on the axis of oil -- Africa and South America: A key new travel route for oil executives is the south Atlantic shuttle between the west coast of Africa and the east coast of South America. This is because, geologically speaking, they are "anologues" -- millions of years ago, the two continents were united, so that when oil is found on the coast of one, it can also be found on the coast of the other. Take this week for example. Houston-based EnerGulf Resources announced that it is drilling a supergiant 3.1 billion-barrel oilfield off the coast of Namibia, Bloomberg reports. Meanwhile, across the Atlantic in northern Brazil, BP took a 40 percent stake in an offshore area held by Petrobras for an undisclosed sum of money; for BP, that is on top of a $3.2 billion investment in Brazil last year. On the South America side, this area is called the "equatorial margin," which includes northeastern Brazil, French Guiana, Guyana and Suriname, write Bloomberg's Peter Millard and Rodrigo Orihuela. Companies working the equatorial margin have conviction that they can find oil straight across the sea in Africa as well. The Bloomberg writers quote Bob Fryklund of IHS CERA, a Massachusetts-based energy research firm: "It's one of the hottest trends in the business at the moment. People are marching up and down the coasts to figure out where those fan-shaped deposits are."

Yet the African continent can be perilous, as Chinese companies have discovered. South Sudan has expelled the head of the Chinese-Malaysian partnership conducting most of the country's oil production, reports the Associated Press. Liu Yingcai, chief of Petrodar (81 percent owned by the China National Petroleum Company and Malaysia's Petronas), was given 72 hours to leave after being accused of helping Sudan to steal South Sudan's oil. The alleged theft of more than 2 million of barrels underlies a ferocious row between the two neighbors. South Sudan asserts that Petrodar helped Sudan to build a dogleg pipeline that aided the alleged oil theft. It is the second recent drama involving the Chinese -- last month, 29 Chinese workers in South Sudan were abducted and held for 10 days by rebel forces. Yet, for the reasons stated above, the stakes are too high to leave. China relies on Africa as a whole for 24 percent of its oil imports, writes Reuters' David Stanway, and is not likely to pull back.

For Putin, the price of oil goes up: Russian strongman Vladimir Putin is waging a furious contest for a third term as president. His opponent? Enemies abroad (mainly Americans) who, he suggests, covet Russia's oil, corrupt its citizens into traitorous behavior, and all in all wish harm to the country. To buttress his fiery defense of Russia against a potential new invasion such as Napoleon's of 1812 (yes Putin really cited the French dictator), Putin is promising to dispense billions of dollars -- for higher pay for police and doctors, for cheaper health care, and for a stronger military. The spending, and the sharp-edged confidence behind Putin's politics, both flow from the spigot of Russia's prodigious oil exports, writes the Financial Times' Charles Clover. Many of the world's petro-rulers have become bolder with the rise of oil prices, and more profligate with the revenue given the challenges of the Arab Spring. In Putin's case, it is less than two weeks before a March 4 election that has ignited unprecedented criticism of his rule. That he has resorted to populist spending places enormous demands on Russia's oil income. The state budget already required an estimated $90-a-barrel oil to break even. Now the break-even price could be $120 a barrel, Clover writes. He quotes former deputy energy minister Vladimir Milov: "For Putin to have serious room for maneuver, he needs to have oil at $150 or $200 per barrel. What we have now is not enough." Finances are just one indication of a coming post-election Russian hangover. Putin's jingoism does not seem to be mere electoral politics -- with opponents now able to muster tens of thousands of supporters in the street, Putin will continue to need a bogeyman in order to rule effectively. Look for reset -- the thaw between the U.S. and Russia of the last three years -- to stay stubbornly on the back burner.

Go to the Jump for more of the Wrap.

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The New York Times’ Leslie Kaufman and Kate Zernike had some fun over the weekend at the expense of an apparently large number of Americans, including a top presidential contender, who think clean energy is a subversive plot to create a world government led by the United Nations. Many people are merely annoyed by smart meters, bicycle lanes and added home insulation, but these folks say such ideas are seditious.

In 1841, Charles Mackay wrote a gem called Extraordinary Popular Delusions and the Madness of Crowds, a history of market bubbles based on misperceptions of reality. Call it what you will, but we are in a period of unusually high erroneousness when it comes to energy and the places it’s produced.

Consider the petro-state of Russia. Over the weekend, tens of thousands of people stood outside in minus-10 degree frost in Moscow in order to inform leader Vladimir Putin that he could not simply presume to swap places with President Dmitry Medvedev. What did Putin hear and see? Treacherous protestors acting under orders from Washington.

The Wall Street Journal’s Alan Cullison explains Putin’s assessment as a campaign strategy. Yet the last six years of history suggest that the former KGB officer does actually perceive a White House plot behind the outbreak of popular uprisings of recent years, including the color revolutions of the former Soviet Union and the Arab Spring. (This delusion extends to Washington, where current and former U.S. officials have informed me with serious brows of their decisive role in the color revolutions; these hands still believe that democracy is exported.)

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The geopolitics around us -- mainly Iran and Nigeria -- are keeping oil prices aloft. But should traders lose the fear of Tehran closing the Strait of Hormuz, and Nigeria's Goodluck Jonathan not managing to make peace with his striking countrymen, look for the air to go out of prices that, despite the continuing European economic crisis, exceed $100 a barrel. And if they drop far enough -- into the low-$80s-a-barrel range -- some key petro-states are going to be in serious trouble, according to a couple of analysts from the Eurasia Group.

In a blog post at the Financial Times, Eurasia's Chris Garman and Robert Johnston scrutinize Russia, Nigeria, Venezuela and Saudi Arabia. Garman and Johnston's presumption is that oil demand remains soft in the U.S. and Europe, and erodes the impact of an expected rise in Asian oil consumption. As a result, Saudi Arabia attempts to retain a floor under prices by reducing production, but that just creates a vicious circle: Lower actual Saudi production necessarily means higher idle production capacity, also known as spare capacity. As far as petro-states are concerned, that is a deadly brew.

Oil prices are determined at precisely that inflection point -- spare capacity. Oil traders in London and New York compare global oil demand and the capacity of petro-states to meet it, and if the gap between the two numbers is exceptionally narrow -- if there is barely enough production capacity to satisfy demand -- then traders will bid up the price. When they do so, they are betting on the blowup risk of an event like anti-Iranian sanctions or Nigeria's street protests, and the loss of existing oil exports. This risk is based on the following question: Do or do not states such as Saudi Arabia possess sufficient spare capacity to make up for those lost exports?

Similarly, if the gap between the numbers is super-wide -- such as would occur this year in the Eurasia scenario -- traders will bid down the price, since it almost wouldn't matter what geopolitical event occurred: There is still plenty of spare capacity to compensate for almost any loss of production.

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End-of-year edition

Bad year for petro-tyrants: Did today's trouble for petrocrats truly originate with Muhamad al-Bouazizi, the Tunisian fruit-and-vegetable seller whose self-imolation a year ago preceded the Arab Spring? I don't think so. Before Tunisia and Egypt, before the crumbling of the Berlin Wall and the Soviet collapse, before the rise of Benazir Bhutto, and before even the fall of Chun Doo-Hwan and the birth of South Korean democracy -- there was Corazon Aquino's People Power revolution in the Philippines. At this moment 26 years ago, yellow-clad Aquino supporters with their ubiquitous "L" signs, made with outstretched thumb and forefinger (in photo above, re-enacted earlier this year in a Manila celebration), seemed quaintly outmatched by then-dictator Ferdinand Marcos as they prepared for a snap presidential election. Yet, just two weeks after a fraudulent count gave Marcos the victory, a pair of military men defected, setting off the massive crowds of EDSA, Marcos' ignominious flight out of the country aboard a U.S. aircraft, and his exile in Hawaii. The remarkable string of democratic breakouts in the quarter-century since -- regardless of their imperfection in action -- began on EDSA, with the Laban hand signs, and Freddie Aguilar's haunting renditions of "Bayan Ko."

I am reminded of the Philippine events not because of the anniversary -- I witnessed the revolution as a young correspondent in my first foreign posting -- however, but some similarities with current events in Russia. The fatal cracks in the Marcos edifice were defections, starting with the Catholic church; then government election-commission computer workers; and finally the desertion of Marcos' defense minister, Juan Ponce Enrile, and his vice chief of staff, Fidel Ramos. In Moscow, Patriarch Kirill I, the leader of the Russian Orthdox Church, is an outspoken critic of this month's Russian parliamentary elections, reports the New York Times' Sophia Kishkovsky (the Wall Street Journal's Greg White and Rob Barry have produced a must-read systematic evaluation of the elections.). A regional executive of the powerful state company Gazprom -- Sergei Filippov -- has called for a full accounting of the indications of fraud, reports the NYT's Michael Schwirtz. An unidentified official in the city of Vladimir sums up the quandary for Putin and the ruling United Russia party: "This is probably what United Russia is scared of most: that someone from the inside will start to talk," this official tells Schwirtz.

This unnamed Vladimir official is right. A truly massive public uprising in Russia appears all but impossible, not the least since there is no unifying opposition figure. Lucian Kim writes that that is not necessarily a bad thing -- Putin, he argues, is actually a pretty good reformer. Yet, recalling those days in Manila, I do not recollect a single colleague or source forecasting Marcos's ouster, either.

Go to the Jump for more of the Wrap.

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Kazakhstan is moving fast to pacify its restive west as a new video circulates in which police shoot and beat retreating oil workers protesting labor conditions. Two reasons: With parliamentary elections three weeks away, President Nursultan Nazarbayev (pictured above) wants to stamp out any political narrative conflicting with his long-time assertion of keeping Kazakhstan stable. Abroad, the jittery global oil market is already starting to factor in a possible disruption of Kazakhstan's 1.5 million barrels a day of oil exports, half of which is an extremely high-quality light variety.

The Kazakhstan unrest -- violence in the western city of Zhanaozen in which some 14 workers were killed -- caps an extraordinarily turbulent year in the world's oil patch. The distribution of power has been shaken up in the Magreb countries of Egypt, Libya and Tunisia, and violence continues to threaten the rulers of Syria and Yemen. Saudi Arabia is spending some $130 billion to stave off its own public dissatisfaction. In Russia, Prime Minister Vladimir Putin's seemingly unassailable hold on power has been challenged by a botched decision to return to the Kremlin, and a rigged parliamentary election. All in all, the uprisings have helped to push annual average oil prices to their highest level in history, exceeding $100 a barrel.

The trouble on the eastern Caspian Sea is the climax of a six-month-long labor strike by some 1,500 oil workers over wages and other grievances. These workers appear to have mounted their strike against two oil companies -- the state oil company, which goes by the acronym KMG, and a Chinese-Kazakh oil company called Karazhanbasmunai (here is a good explanation by Alisher Khamidov at eurasianet.org.). Last weekend, as the country prepared to celebrate the 20^th anniversary of its independence, workers protested city plans to turn their strike camp -- the Zhanaozen public square -- into a festive place for dancing and public dining. It turned into a riot, with vehicles and buildings set aflame.

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Vladimir Putin now has something in common with Barack Obama -- approval ratings in the fortieth percentile. So he and his machine are figuring out how to give Russians a better picture of who he is, and what he plans in the next six years. As a first step, he took questions for four-and-a-half hours in a live call-in broadcast today. Russia's government needs "an update," Putin said, seeming to throw fuel on the fire of some who think that one of Putin's main tactics ahead of the March 4 presidential election will be to get President Dmitry Medvedev to quit, and blame Russia's troubles on him.

Yet, according to Russia hands Fiona Hill and Clifford Gaddy, Putin's main obsession at the moment may not necessarily be the election, but shale gas. Hill and Gaddy gathered this idea at the annual Valdai dinner, which Putin has hosted for eight straight years (they have just posted their impressions of the dinner, held last month, at the Brookings Institution web site).

Putin was extraordinarily flat this time, the pair say, becoming suddenly and solely animated on the subject of hydraulic fracturing, or "fracking," the controversial method in which gas is drawn out of hard shale by shooting a water-and-chemical mixture into the rock at tremendous pressures.

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Until September, Russia was ruled in a careful choreography: President Dmitry Medvedev was the face on a tough but reformist agenda that included the construction of Skolkovo, a richly financed version of Silicon Valley in the Moscow suburbs, and a more conciliatory approach to western foreign policy initiatives. Actual power was held by Prime Minister Vladimir Putin, who nevertheless in public was the "chest," spending much time traveling the country in service of showing off his physique and harpooning abilities.

On Sept. 24, however, Putin announced his intention to return as president in elections next year; he would swap with Medvedev, who would take occupancy of the lesser post of prime minister. It would be Putin's third term in the Kremlin, a home he surrendered in 2008 because of a constitutional limit of two consecutive terms.  Putin thought that his word, along with the largesse-enabling factor of high oil prices, were sufficient in terms of setting in motion Russia's next political transition. But on Sunday voters told him otherwise -- the ruling United Russia party received less than half the total vote, and had to cheat to get that much. Russians informed Putin that he will have to campaign for victory on March 4.

So why did the ostensibly long-suffering Russians turn on Putin and deny United Russia continuation of the two-thirds margin that it won in the Duma four years ago?

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A tail risk called Iran: Back in September, New York oil analyst Edward Morse wrote a paper called "Tail Risks and the Oil Market: Expecting the Unexpected." The paper (if anyone finds an open-sourced on-line link for all to avail, please let me know) describes the outsized impact of big surprises on oil prices -- "hurricanes, floods, refinery fires, tanker spills, accidents, terrorism, unpredictable geopolitical strife within OPEC," Morse writes, could drive oil prices through the roof, or just as easily cause them to collapse. That quality, he suggests, makes oil a great investment vehicle -- for those prepared to accept the risks, of course. I write about the role of tail risks this month in Alberta Oil magazine. Others have noted this general law of physics -- Nassim Taleb named it the "black swan" affect; coming from another angle, Stephen Greenblatt calls it "the swerve." For the rest of us, there is a focus on the pure impact on our lives, which at the moment includes what will happen with Iran. Will it develop nuclear weapons? If stymied by sanctions, imposed this week by the U.S. and Europe, will it send Hezbullah against Israel? Will it block the Strait of Hormuz?  Will it elect to withdraw its 2.2 million barrels a day of oil exports off the market, as the Financial Times' Javier Blas asks? The FT published a column by two British writers who suggest that we might be "sleepwalking into a war with Iran."

The Obama administration is attempting to navigate the shoals by shaking the stick of death-strike sanctions, but not actually imposing them. As this blog has suggested, tough sanctions can bite, but companies and countries eventually figure out how to bypass them through the good offices of smugglers and assorted other wily middlemen. Yet the tail risks remain. This is especially so with a nation like Iran, whose essence of power lies in its menacing hint of roguish mischief.

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Vladimir Putin's decision to crown himself king anew has not gone as planned. Most recently, Russia's strongman leader has found himself for the first time commenting publicly on the general belief that he is responsible for the career of one of Russia's richest oligarchs, a St. Petersburg man who until a few years ago was a nobody. Putin denied helping Gennady Timchenko, who runs Gunvor, the world's third-largest oil-trading empire, and Novatek, Russia's second-largest natural gas producer. Why is it not possible to be a self-made oilman oligarch in Russia absent Kremlin support, Putin suggests. Indeed, why not?

In any case, with the clarifying benefit of a few days, we return to the matter of the Kremlin Contest, O&G's betting competition for the identity of Russia's next set of rulers. President Dmitry Medvedev's four-year term as president ends next year, with elections scheduled in March. The prevailing wisdom was that Putin would return, but was that a fait accompli? During the summer, we challenged O&G readers to bet on their beliefs.

On Saturday, Putin announced his decision (he would in fact return as president), but a bit of confusion followed when now-former Finance Minister Alexei Kudrin rejected the corollary -- that not only would Putin take up residence again in the Kremlin, but Medvedev would become prime minister. It seemed that Kudrin himself expected to be named to the latter slot. But Medvedev and Putin have put the kibosh on Kudrin's aspirations -- the two will swap positions -- and no one else has challenged Medvedev.

So we proceed with confirmation of Saturday's announcement. We have dual winners of the contest. They are Theo Francis, a writer at footnoted.org, a newsletter that digs into Securities and Exchange Commission documents; and Michael Perice, a fresh political science graduate from Temple University. Both guessed that Putin and Medvedev would swap positions, and that Putin would make his announcement Dec. 8, which was the best estimate of the actual date.

In the coming days, I will personally email, tweet or Facebook the other entrants with instructions on how to mail their wagers to one of the winners. I am going to assign the booty this way: The alphabetical first half of the entries will go to Francis, and the second half to Perice, in order of their own places in the alphabet. Since I bet two objects -- a glass of Rioja and a signed copy of The Oil and the Glory (the book), I will share the wine with Francis and mail Perice the book.

I myself guessed wrong -- I bet that the tandem would stay in place, Medvedev as president and Putin as prime minister (with the decision on Dec. 9, the same date on which he announced in 2007). My reasoning was that everyone knew that Putin was truly in charge, so that he did not need the presidential title -- in other words, the current system worked, and why mess with success? But after the smoke cleared, my wife provided the best and simplest analyses I've heard of what happened: "The tsar wants to be the tsar."

So how did the winners reach their conclusions? I found the methods surprising. Read on to the jump.

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Professional autocrats have practical reasons for playing their cards close to the chest: Neither friends nor enemies can confidently strategize against you; your vital aura of mystery remains in place; and you demonstrate who is truly in charge. So it is with Vladimir Putin, who seems to have confided to just one intimate his intention of reclaiming the mantle of Russian president. Friends and respected others say this is no surprise. Yet I am baffled -- there is almost no upside for Putin in sitting in the Kremlin, and much disadvantageous in doing so.

Let's start with some housekeeping. Over the weekend, I too hastily announced two winners of the Kremlin Contest, the betting competition on who would serve as Russia's president for the next six years. The winners -- Michael Perice of New Jersey and Theo Francis of Washington, D.C. -- submitted identical entries: They both guessed that Putin and President Dmitry Medvedev would swap places, with Putin announcing the decision Dec. 8, which was the closest date. But since then, Russia's finance minister extraordinaire -- Alexei Kudrin (pictured above, exchanging mutual glares with Putin) -- has openly rebelled and declined to serve a Medvedev-led government. Kudrin has so much domestic and international economic cachet -- he had himself been seen as a potential prime minister -- that observers think his brinkmanship can't be ignored. Putin may have to seriously consider running with him, not Medvedev. Since we have contestants who bet on a Putin-Kudrin ticket, we've withdrawn the declaration of the winners and will stand by while the dogs fight under the carpet.

The Kudrin surprise is important whatever the case -- Putin appears to have tipped his decision only to Medvedev, who had to know because he was the one who made the announcement at a United Russia party convention Saturday. That it openly did not go over well is telling.

A few years ago, such secretiveness would have been no problem. But Russia is a different place from 2008, when Putin elevated Medvedev and became prime minister. Now, Kudrin -- appearing to have been blindsided and possessing the chops to confidently complain -- has forced Putin into a possibly awkward position of not appearing as all-powerful as he likes.

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