It is no secret that the Russian economy is at best stagnant and probably in recession. You need 61 roubles these days to buy a US dollar, a year ago you needed only 33. The economy is in trouble because of the low price of oil, on which Russia is heavily dependent, and because of Western sanctions resulting from President Vladimir Putin’s activities in Crimea and Ukraine. The Russian central bank has spent more than $80 billion buying roubles in an effort to push up its value but it has had little effect. Inflation is running at 11.4 percent and many projects are being cancelled because there is no money to fund them. It is, therefore, a very odd time for the government to be announcing plans for a new Formula 1-standard race track in the Moscow oblast. Russia already has a Formula 1 track in Sochi, although there have long been rumours that the event would be better-suited to either Moscow or St Petersburg, but was put in Sochi to justify the vast expense of the Olympic Park.
Just a few days ago the Moscow city authorities announced that they had halted the development of a project called Airopolis, a huge fairground, retail and office complex, with exhibition space, hotels and a Formula 1 track, near Vnukovo airport in the south-west of the city. This was announced in December by Vitaly Vantsev, the chairman of the airport, which is an investor in the project, who said that it was necessary to stop the development because the repayments on loans required were no longer viable. However, it seems that the F1 circuit may go ahead without the rest of the development, according to Vladimir Zhidkin, the head of Moscow’s department for development of new territories. The plan is for the track to be located alongside the Kiev Highway
Zhidkin said that the design of the circuit will be done by Tilke GmbH. Russia has a contract with the Formula One group until at least 2020, but it is not clear whether the race can be transferred away from Sochi under the terms of that deal.
joeblogsf1 
“but it is not clear whether the race can be transferred away from Sochi under the terms of that deal.” Of course it can, even Bernie wouldn’t mess with The Vlad!!
You didn’t think the elites were going to suffer did you?
Gosh oil would need to be sub $10 a barrel before the Beluga ran dry.
The FT Alphaville blog has a nice set of pieces on the new oil economy. Basically, it’s not what it used to be, because shale has meant supply on tap, not the poetic quest for gushers of all our known ages. In fact, there was a reason this did not happen before: policy makers in the US knew very well, of the on shore capacity, and deliberately created punitive taxes for onshore “exploration”, despite the stuff is hardly tricky to discover.
There’s a lot more to that story, and no space for it here, except I’ll note that nobody else is noting the fact of the policy decisions, and why they were made, not so very long ago, about onshore, shale, and the consequences. In fact, despite this being a rich field, for academic papers of the age before the first Oil Shock, some very big names pointing to just what I have said, I am surprised there’s almost radio silence, on the subject of the details.
As for Russia, it’s horrific, how they are pinning their nation to oil. So much so it might as well be they’re selling grain exports during the famine. I don’t care for political thought, no matter I speak of it, but some things are genuinely and painfully plain to see.
It’s a nonsense, however, to see a truly global sport, free or independent from politics in real terms. No other sport than football has such a reach, and football has established itself a communal base of interest that is so much more cared and understanding, or forgiving, of the pressures put upon it. I do not think there’s another sport that can have such a reach, that also has any commercial interest. That is the bigger reason why F1 needs, if not scrutiny, then exploration by the serious minds of our leaders. That is why there is truth in the interest form nations we don’t recognize as F1 old guard.
Still, what do you reckon to those new 2015 noses?
Lol, ## thump! ##
Me, back down to earth! 😂
I think it’s amazing how much attention is paid to noses, how critical they have become, and how maybe Adrian Newey found all of this regulatory protuberance is simply exasperating.
I think they need to be blown…
Availability to cheaper more easily extracted oil, some politics, but decreased global oil prices in the early 80s, halted development of Shale Oil, and much of the land/sand locked oil in the North American interior, it wasn’t until there was political leadership that encouraged such exploitation, further improvements in extractive technologies, and record high oil prices on the global market that developing these resources became economically viable.
as well as relying on you for the inside track on F1 during the season seems we can also rely on you for updates on geopolitics during the off season joe
don’t know what BP got paid when they got squeezed out of their russian joint venture but it must be starting to look pretty good right now …wonder if they could spare something for F1 sponsorship ?
If you mean the TNK — BP venture, it was a horribly fraught affair, from beginning to end, continually turning on interventions and contentions, and taking hostage, literally, executives charged with its pursuits. Hostage akin to the way Stalin would ensure the guards and commandant of gulag camps, also expired there, so to protect any knowledge, and to disintegrate inevitable sympathies. BP suffered greatly from this, even only as a distraction, and it cost them considerable political capital to extract themselves, way above any deficit accounted by financial recompense. I’d therefore not bet on BP wanting to be friendly with any pseudo governmental organization, the FIA, afflicted by uncertain ties to Russia. If you set out to read the stories that abound, recently Petrobas comes to mind for a page turner pulp novel. Much in the big oil game remains as intriguing and exciting, in often all the wrong ways, as it was when Rothschild competed with Deterding for the Caucasian spoils. Deterding seems to be edited out, on current web accounts, because of unfortunate NAZI connections, but he received thorough and positive yet critical treatment in Shell’s official history book, published at the turn of the last century, which I recently picked out of a pile, he was a driven man indeed. Under a man like Deterding, you might want to bet on a sponsorship, and a aggressive one. But a company who can be embarrassed by a man such as John Brown, is a neutered one, in my book,
So sorry, I’m a right Dunce today, of course, I just mixed up BP and Shell, towards the end, and Shell are not invisible in the sport, of course! I meant to exaggerate the enormous management style differences that accumulate over histories, that sometimes one can use it predict company’s predilections towards taking forward stances like sponsorships. In short, BP, nope, unlikely; Shell, look at the history how they promoted themselves to prominence so cleverly.
BP traded their 50% of TNK-BP for 20% (and cash) of Rosneft, the Russian oil company, so they are still invested in the Russian energy market. As far as oil supplies, Shale oil is exported from Canada as oil exportation from the US is outlawed. Natural Gas from fracking is the major new fossil fuel being extracted in the US and new liquefying plants and terminals are being built on the eastern seaboard to ship it to Europe, taking some market away from Russia.
Does the world need another Tilke track?
No!
Not ALL of Tilke’s track layouts suck. Austin is fabulous, Malaysia is good, Turkey was no turkey, Indy was good.
Never thought I’d be the guy defending Tilke!
There are very capable non-Tilke circuit designers
Another reason for a EU commission to look at F1. Why don’t the 3 other FIA recognised designers get to build new F1 tracks?. Are they even invited to tender for them?
Point taken Joe, but if no one else has designed a new F1 circuit other than Tilke, by default He is the only F1 circuit designer.
Many benefits to being one of Bernies Favs!
I believe that there are things called tenders but no-one other than Tilke ever seems to win them. Very odd.
Wasn’t the recent Silverstone redesign done by another firm (not Tilke)?
It could be that he’s simply the best, even though that the other ones might be capable as well, just not as good as Tilke.
Yes, ‘odd’.
I wonder why not.
What we would like to know, of course, is who they are, what they think, and what they would do?!!!
Any chance, Joe? I mean, of investigating?
I’m adamant you need to produce or curate a special edition GP+, to look at the state of the union, to promote the big ideas, the big problems, and develop more attention. I can’t think of a better way to push knowledge out there.
Austin’s layout is good because of Tavo Hellmund and Kevin Schwantz. For once Tilke didn’t get to build the track he wanted at COTA.
I should’ve known better! I completely forgot about Tavo and Kevin’s involvements. thanks for the reminder.
I wonder what’s going on with the Moscow Raceway then, I heard it’s almost F1-ready as it is, having the F1T status and all. It’s not a bad track as proven by WSR and fairly close to Moscow, too.
Why would we even need a second F1 track near Moscow… But it’s business and politics, I understand that much.
Moscow Raceway is quite a long way from Moscow. It’s a good facility but not that great a track for racing
defiantcatgirl, “F1 Test” status got dumped outright from the FIA circuit regulations by end of 2013, so that circuit is merely left with its Grade 2 rating at present.
Joe, given the Russian Govt’s credit rating by Fitch is just above junk bond status I wonder how long it will take before this project goes the way of the New Jersey Grand Prix and disappears from view
We need a proto oligarch to try their “unlimited” AMEX card, to buy this game.
Then, then I say the Russians area in!
No, not another Tilke track…Come on guys !
I keep thinking the obvious problem is, that if you show up the flaws in a incumbent’s product, you merely help them. But it would be great to interview the other designers out there, and I think it’s needed, to hear those voices.
The little man rattles his sabre and oil is currently @ $43 a barrel, funny how that works – looks good on him. Economic warfare, time to pay the piper. Wait until the general populace feels the pinch it will likely take years to fix the damage and reverse the momentum of their economy. Sochi may end up like the Greek Olympic venues and running F1 may be out of their reach.
Some people indirectly posit the theory that German is okaying a divide and conquer approach, with their influence over pipelines. This is strongly in play, with delegations to the OSCE. The OSCE was curdled out of the Office of International Migration, the intra-governmental treaty organization for repatriating refugees from the second world war.
Germany has disproportionate representation and influence in the OSCE, by my view, a friend experienced the tremendous support and push of German candidates, benefiting form this, that exists to promote their interests in that, and related, organizations. It’s crazy; when there were elections in Georgia, Hugo Boss sponsored the OSCE to provide luxury leather notebooks and briefcases… for every worker even those stuck in ready reckoned accommodation out in far flung posts, well, it seemed incongruous, but it’s not a isolated example at all… Mercedes support the German training programs, where election observers learn to handle all wheel all terrain vehicles under “combat conditions”, and so on. The institutional support is deep, and seemed amazing, when I heard it from my friend in reports I found difficult to really believe.
Anyhow, there’s definitely large shale oil deposits in these border countries, that could possibly change the geopolitics of the region. However, Germany rather prides themselves in their exclusivity of managing the Eastern Bloc, not least to look at the homeland of their Chancellor, for emotional connections. This, in turn, causes a tremendous leverage over EU wide gas and fuel oil prices, that can be turned to advantage. After that, matters of space constrain me, it gets really complicated.
Consider, however, the very generous contracts German electricity producers give for home grid supplying alternative energy generators. Homes with solar panels are paid far above clearing rates, for their very modest grid supply. And by the nature of grids, this is not a useful, controllable, supply, to where it is necessarily needed. Much, via France, ends up here, in the UK. And that, in turn, is why we have French and German retail electricity and gas suppliers, in the UK, because they are protected by long term hedges of difficult to move regulated pricing. Classical regulatory arbitrage, but with a local geopolitical and historical twist.
In summary, you may be looking at the wrong economic war…
Just a flippant rejoinder as to economic wars: what would you aim for! A economy the size of Russia, mucked together with broken down satellites, and itself incredibly fragile, or a economy the size of the United Kingdom?
Even if, according to reports I read from Reuters, it was only by including the black or dark economy of drugs and sex services, that, last year, kept the UK in fifth place, ahead of France…
One, usually, seeks grander prizes. As much as the vast and wondrous reserves, of arable land even mores than fossil fuels, that parts of the former USSR may bedazzled the intrepid dreamers, they are beyond viable reach. If, instead, you can play those perceived threats to belittle a long opposed neighbor, who by good fortune can afford to pay you on time, well, that may appear the more appealing. If nothing else, because we can’t speak the same language as them, at supposedly equal meetings over tables, at conferences we all agreed to play by the rules for, and generally, with typical British obstinacy and observation of Mythical Cricket, adhere to, regardless anyone else does, or finds loopholes you can drive a EC sized circus through…
I’m certain Putin will ensure money is made available for this track. Bernie’s brown tonguing at Sochi provided Putin with a lot of world wide airtime that he’d never get otherwise. I’m sure he revelled being treated as he was by a western run sports body.
He may be a little busy being up to his arse in alligators, although the one upside (for Putin) due to the lack of wealth distribution in Russia is initially the ultra wealthy cronies (a ridiculously small group that own a staggering amount of the countries wealth) will feel the ‘hit’ rather than the general population.
Hopefully in this era, with the prescence of internet, the average Russian can make their own educated choices and help steer their government toward a more productive path rather than buying into Putin’s propaganda entirely.
Your comment makes me wonder if the brown nosing was related to a previous mention of money being available for a Moscow Grand Prix.