Let me recap this: i put a headline right here to kind of start the discussion. Obviously you know it's simple economics right demand. Supply equals price, so demand all-time high reopening summer secular demand, flight travel, blah blah blah. We all know this supply all-time low.

You just remove the third biggest oil supplier and the main european supplier out of the equation, so you have elevated prices. That's you don't need to watch our show to understand this. This is the part where kind of the starting point of the whole discussion. So i was hoping - and i think, a lot of the people who invest in the stock market and are interested in what's going on with energy, and i think if you are investing in stock market, you should be interested because it affects everything, growth, value everything i Was hoping that this new development, where the saudis saying hey, we're open for more supply and we're going to meet with biden and things are getting the bromance is starting, but the two days later biden trip is not happening and their proposition, as they pointed out.

Right now in the headline is very disappointing. So can you explain to me what happened? How did we go this 180 from this new hope to back to disparity so uh? I think there's one more thing which is which is foundation that there are. We always see that there are two big oil producers and we say saudi and russia. In reality, there are three big oil producers, which is u.s, russia and saudi.

So whenever we talk about like when the baiden government talk about more oil, they have not. They mean russia is eventually out because nobody wants to buy more oil from them everybody's looking for replacement, but nobody is talking how you us can increase production so that equation. So, at the end of the day, everyone is depending on the southeastern saudi, has a lot of bargaining power. At this point, we have also seen that the the chip between democrats and the saudi is is the khashoggi incident and, at the end of the day, they'll stand on khashoggi and how they deal with mbs is is a crux of it.

Okay, there is no better time for saudis uh, at least to resolve this issue. Okay, they want to have i mean they are they? They also need like us as a strategic partner for a long time, but not at the expense of themselves. So if they have to do it, they have to do it now now, in terms of, we also have seen that, despite whatever has happened, opaque plus is is more united than before i mean there is russia still has safe. Okay, we have seen that all the countries are together.

Everybody is spending good money. Everybody knows that that, even if you increase the production by four and five percent, this oil price is is going to stay right. They also don't want oil to go 200, because in that particular case there is a real demand: destruction that that starts a lot of clients. Yeah i mean the the airlines will go bankrupt.

The airlines runs on a very thin margin and right now a lot of money from airlines is going to actually welcome. There was an interview with the singapore. Ceo and people are asking about the high air ticket prices. He said a lot of this money is actually going to to oil companies, so the challenge for them is: they do not want to enter in an oil price territory where there is going to be a demand destruction, while they want to maintain this premiumness and two Years back, three years back, the risk for them having violated hundred dollar was that the shale oil will bounce back, which is not happening at this particular time.

We also have seen that the in canada in u.s and uk government is talking about taxing oil and gas revenue. So think from forget that forget just take from an industry pointer that you are going to text an industry, because that is having a lot of revenue that has suffered from last eight years. And you also want them to invest in projects that are seven to ten years long. Why would they do that? So if there is no certainty - and there is no regulatory and investment framework, they can protect their own investment, they will not do it.

So, at the end of the day, the only major investment in oil and gas will happen in the countries which are either struggling from large imports. Okay, but open for fossil fuels. Okay, countries like china, india, a lot of african countries and southeast asia, or i mean it's going to be middle east. There is a there is no other place to to get it.

It's easier to say you can replace it and i believe you should replace it over the time, but over the time and current time are two different phrases. You need to be very clear on the difference that comes with it and what the price you need to pay for that. What's the sweet spot you mentioned earlier, like there's a, i mean price too low, which means they don't want to invest in capex and developing the industry price too high airlines and factories go bankrupt, so you lose clients. What's the sweet spot for opec like what's their ideal price, if the fantasy price, you know what i mean, i think for opec like, for example, if you take the case of saudi saudis, the budget balance around 90 to 93 dollars.

So that means if the prices are 90 to 93, that gives them some surplus, so anything between 100 110 for them is a sweet price okay, so every country has their balancing price for so most of them actually balance budget somewhere around like 70 to 90.. Okay, it's not about like it's, not the cost of producing earth. It's a cost of producing oil plus the money you need to pay and to run your country. So that's what we call like the the balancing price for that particular country.

Now. The challenge is that the bigger challenge everyone is facing is that it's outside opaque, it's not the price that defines the investment, it's the policy framework. That means, if i'm chevron and i'm going to invest in a project that is 10 years long. I need to understand that i will make my money back: okay, now, 10 years, a long time, it's a so what happens is that if you have got a windfall profit in this year - and you do not have visibility that how your investments are protected over 10 Years, you will tend to buy back your stock.

You will tend to pay dividends to your shareholder, because you need to. You need still need to entertain your core investor base for last eight years. What was happening was that people who wanted to risk and wanted more reward they were actually going intact. Instead of energy and people who wanted like dividends, they were going into pneu and other kind of things, so the the energy investor was not treated well.

In last seven, eight years so now they have the opportunity to actually bring back and cater their investors and, for example, like they are saying, okay government says we want to text them 65. Yes, you can text them 65, but think back you take that money. Who is better positioned to invest that money as a company or you as a government? Okay, whether you take that money and if investment in green energy, that's fine, but that will happen over a time. What will you do for the shortfall of energy in the limited time? So there is only one solution for this whole problem.

Is you need more oil and gas for now, and actually it's good for renewables also see you see when renewable became mainstream minimal became mainstream between 2015 to 20 20. This is where renewable became the evk mainstream. Why? Because the oil price was low and the market was flooded with oil, there was no incentive on premiums. People were not interested anymore in investing, and that is where i mean.

Apart from like a conventional or thinking, everyone says that oil is high. Then you will have renewable flowing. No, you need renewables are more more competitive and they will grow more when there is market is flooded with oil. Okay, so i want to show you an article that came out in seeking alpha and on seeking alpha.

They actually interviewed the ceo of chevron. I don't know if you've seen this article, where he's talking about yes, i've seen it so in this article he's basically voicing what sounds to be a very critical position: uh towards the us regulators, basically saying that you guys have killed the industry. That sounds like that's. What he's saying right? No he's right, i mean, and i'm with him i'll explain his argument like in layman terms.

For me, what exactly does it mean? So you so like we discussed uh uh tom just now that so, if you want to invest in more refineries, refinement is a long term mega capital project. You need like seven, eight years of investment and then over the time of next 10 20 years, you will actually break even and make money over that investment. So you need 20, 10, 15 to 20 years of demand assurance, and you need that kind of regulatory framework that where you are sure that your investments are safe. This is what we discussed, and this is what exactly is saying that there is no security.

There is no guarantee that if i put this money that i'll be protected, i mean i'll make money for my shareholders on that part. So it is very clear that he's simply saying that you, you don't want a u.s production to go up. You don't want to you, don't want to provide us a framework where, as an industry, we can at least thrive or at least contribute meaningfully. Okay yeah i mean, then why we do investment, it's better.

We buy back stock and we give money to shareholders as a dividend. So where would he go can does he does he imply that they they can go to other countries to better fundraise? Then i mean what i mean: chevron has to sell oil, they need refineries. So when he says, there's not going to be any new refineries, so that means i mean they're not going to go out of business right. So what is he actually saying? They're moving out to mexico, and so the answer is two parts.

The first part is that, yes, they can go in other parts where they can build refinery, but that's not easy, so i'll give you an example for the timing. So if you take the case of india, india imports 87 percent or 88 percent of its its oil needs in general. So that means even if there is a full blown uh green drive. You still need oil before you make the full transition, but the downstream in india is actually is.

I mean the refinery industry has a lot of big players, so somebody like even for the places they are safe. Okay, it's not that easy for chevron to go to china or to india and to build a place for themselves. So it's it's easier to to say like okay, we can go out and we can build on refineries, but you can do like one two. Three! That's it, you cannot do it like in a strategic move like okay, i'm going to build 20 refineries outside, so that is first thing.

The second challenge they are having is that uh, when you go like like, for example, you're going to build a refinery, okay, uh, there are two ways you do it you do it yourself or you're doing partnership, you go to middle list or you build with some Of the partners there that's more likely because that's a technology transfer, but then you don't make that kind of revenue. You don't have control on that kind of project. So if they are, they are their projects in in downstream. I don't think that many are going to happen if the situation stays like that there's something else has happened in the last five six years that people have not noted, and if you go through the shareholder reports, people will say that the super majors they say that They have high graded their portfolio.

That means they have reduced the exposure to a lot of countries. So they are, they present. Global presence in in last year's five to six years is less than what it used to be 10 to 12 years. So it is counter strategy in both ways.

So what what does it mean like? Is this an empty threat? Can they what happens to chevron as a company? If they don't ever build new refineries in the us, i mean: can they still just i mean at some point. They need new refineries to replace outdated ones right, it depends, it depends see they are present in upstream midstream downstream, so they can decide that we want to reduce our downstream. So they say: okay, more money is an upstream or midstream see they are in an integrated oil and gas company, because the industry was designed in u.s in such a way that you make a lot of money. If you are integrated, if that incentive is no more and having downstream exposure is, is a liability i mean yeah, it's better to to drop it.

I don't think that is happening, but i also don't see a situation where they are going to invest a lot of money in building infrastructure and refineries and new fields in u.s with current regulatory framework as well. So what basically needs to happen? It sounds is that the we need some assurances that the era of the esg scam, slash renewable fantasy needs to kind of be rejected by governments for all producers to actually ramp up production. See uh countries can do it with the esd, but at least not the phony esg, but they are carrying. As of today, i mean, as of today, the the definition of esg and and tom, i'm an advisor with an esg fund, so i mean i, i need to discuss and explain it to to my investors at time as well like what? What does the sd mean for us as well uh? I i would.

I would preface my i would uh just explain what i meant esg as it's being implemented. Right now is a total show. I totally agree. It's a lot of brainwashing there's a lot of virtual signaling, there's a lot of like current issues.

Supporting that will see it's not serving anyone. Okay, it's not even serving the esg. It's not serving the climate transition. It's not serving the the economy see.

We have a precedent that happened between 2040 till 2019, where oil industry actually shrunk in terms of investment in terms of their their profits, their revenue, and it happened because market was free and there was a lot of oil in the market. Okay. This was also the time when people realized that, if my returns on renewables and my oil and gas are literally same, why would i take the risk of oil and gas? Why would i i go like when you see in terms of risk adjusted returns, renewables made a lot of sense, then see the only way out of it is to to flood more oil and with the current dsg policies. No government is is, at least in the western world, is, is going to take that kind of risk to to upset their voter base, so i don't see any any near-term solution out of it.

Is this because they're saying like so if i'm the oil producer or the potential or producer and you're the government, so it's basically, the conversation is like what like hey tom. Can you make more oil because we need to reduce prices, and i was like no you've spent the last 10 years. Kicking me in the nuts trying to make me go out of business, so you i'm not putting any more of my money into these projects, because so is this? The conversation that's going on. It's pretty much the conversation that is going on without the kicking in that sport see whenever you take esg and whatever you take climate transition, it has to be an inclusive agenda.

That means you are not fighting against people you're fighting for people. Okay. That so idea is like: if you are going to transition thing, how will the industries of today will transition? You may not like it? I mean the problem: what happens in the climate transition? Psg people take view. I need to kill fossil fuel industry yeah.

You can kill, but can you really kill? No, you cannot kill, so you create situation where neither you are happy or not. They are happy and i mean they are actually delaying the whole climate transition journey see. We will need oil for civil future, maybe for long future, so we still have to figure it out ways that how to get a meaningful oil with as limited carbon footprint as possible until we have a proper transition strategy and replacements. People have to accept that fact.

Okay, like we saw in the case of germany like uh in the europe, they were shutting down their nuclear reactor. They have. They are saying for last 20 years that russia is their ideological, economical, territorial adversary, and yet they were depending on russia. The idea was that, at the end of the day, we can manage this relationship.

That was an assumption they took, and this assumption is, is telling that how that a full lot of people in in their head are that they're thinking beyond their ability, and now they are paying price for it. So today, for example, if you take the case of european union european union comes and say we are going to invest 312 billion and we will get away from russia. Okay, now break it down. You are going to invest 312 billion.

Are you going to invest tomorrow or over 10 years over 10 years? Okay, that means the solution of the problem is not going to come together. Okay, what will happen with this 312 billion? That means you are going to build an infrastructure. You are going to build the regasification plants. You are going to build new lng vessels.

You need to ensure that there are fields offshore which are producing oil and gas that will come to the european shore. So we are talking a series of mega capital projects. Now, last time when europe has executed so many large mega capital projects under cost under budget and on time answer is never never. Okay does europe.

You need a lot of people with mega capital project excellence. You need people who have expertise in in manufacturing in where are these people? These people are not in europe. Europe has killed this industry long back, so these people have gone back to countries like australia, uh, china, south east asia, latin america. So how would you get these people back? It's not a it's, not a money problem, it's very easy to go and say: okay, i will invest this much money and i'll get done.

There is a. There is a ipa study that shows that 98 percent of mega capital projects actually fail on their attainment on their schedule on their budget. So money is not a solution, it's a it's a question of execution and they are not talking about it. How they are going to execute at this point, i want to show you this tweet.

This is from tom cotton he's a, i think, he's a republican, senator uh, and he has this tweet up basically saying the esg movement. This is from yesterday the esg movement uh helped drive energy prices to record high, enabled putin, which i agree with 100 percent and harmed americans. So i would tend to agree with what he's saying here: uh. Would you change the wording into the implementation of the esg movement for this to make sense, see, innovate in a way i mean you're right, it's, it could be an implementation.

What happens is that there is like there's a near term thinking and there's a long term thing. Okay, now what is happening is that near done? Thinking like, for example, i was reviewing this company esg recently and the ranking was high and i was trying to understand why the ranking was high and the ranking was high, because the company has endorsed certain events, and i mean that's pretty much was driving. But when you look inside the how the company is actually functioning, there was nothing especially going on there. Okay, so i think that is what the issue is, that people have.

So i would agree with what blackrock has set up as a mission, but the way it was implemented and executed. It becomes more euphoria and cult rather than any ground movement, so it is way off. It is way off like, for example, like when you talk about esg uh, you have to talk esg in the same way the stock on wall street and silicon valley. If you do not agree with that term, i mean yeah, you are not esg, so that's so, for example, say i come from southeast asia.

Okay, southeast asia is an entirely different culture. Okay, people. The way people think about religion is different, so a lot of things which which people in europe or in us will agree on esg people in southeast asia will not agree on here. So where is the inclusiveness here? Okay, are these people on the living or, if you go to india or if you go to china, and you say that this is what some few people in silicon valley has decided to bsg, you need to follow it.

I mean there was an interview recently for foreign minister for india and this this lady was asking asking the that there is only two accidents in the world: the china and the guy said it in a very simple way. He said see. I represent one fifth of the world's population. I think i'm entitled to have my own side and you europe, has to come out of this mindset where europe problems avoid problems, but world problems are not euro problems, so this is what esg is missing.

Like we don't talk about africa, we don't talk about latin america, you know, are these continents? These people don't exist, they don't have a say. So that is where i think blackrock has missed it. They made a playbook and then everybody started deploying that playbook without thinking and yeah. I think you you do something you you get to get to see the price of that, and this is exactly what is happening and the question the challenge now is: nobody wants to be the first to roll back things.

Everyone will be forced to roll back things, because price will keep on going. High oil will not stop here. Okay, supply chains are not going to go on ease. Okay, you do not have that infrastructure that can support an esg in a way that people have shown it, so people have to roll back forcefully.

At some point of time there will be heads will be rolled okay, but yeah. I think people are resisting in doing that and that's why the pain is continuing at this particular time. So is there any chance for us to find more supply of oil right now to mitigate oil prices without getting russian oil back into the mix? Is there such an opportunity? No, i mean you will get some oil from from saudi and other places, but you see the way they are adding. Oil is very simple.

They are seeing how much oil is disappearing from market, so they're trying to keep the the supply flat, but just a little under the demand, so that the the pressure on the price is high. They also know that this is their window. Oil is not going to stay 100 forever, yes, okay. They also know that most of the growth in energy is also going to renewables.

Okay. They also understand that, at the point that this is probably the last oil bull cycle, okay, so as much money, they are going to print than this. It's not going to happen for a very long time and they need the us to help them transition into this new non-oil based economy. So i mean how long can they stretch this relationship on their end? Also right see right now they are in a good spot, because the policies in the u.s, especially by the government, is not very helpful for the u.s producers.

Now there's a simple question which oil has low carbon footprint, the oil you produce in u.s, or the oil you produce in venezuela, better technology, i mean. So when we talk about carbon footprint, we have to always talk about carbon footprint in terms of on the net basis, and this is what is missing. Okay, we treat carbon footprint like okay, something is very evil. We don't want to touch, but by this attitude we are actually increasing carbon footprint.

That is, i don't want to touch, but somebody else on the other part of the world will touch it and we will buy from that person. A high carbon uh footprint oil, so yeah, it's it's not going to help it's uh, i mean i, i don't, and you know these are not the industry. People forget like it's not about the supply and demand these industries. They existed for 90 years 100 years.

They have relationship, they have these. These people have lobbied up in different environments. So few days back, i was talking to one of the executive and they were talking about like okay in the data. They want to go and build a relationship with new new companies and the question to them was yeah.

You can build a relationship, but once you guarantee that these companies are in the business five years down the line, so longevity is very important in an industry. These people have stayed in there, so they know how the the game of geopolitics is is actually driven and how you play a role in that okay, we all have seen what what oil does in terms of politics and power, so assuming that these people don't have Control and also now they have money, which means that now they can actually illustrate, and they can actually dictate how the big oil to big energy transition will happen. So, for example, the gas will play a major role. The cc us will play a major role because they have the technology and they know they are not going to make money by building more refinery, but they still need to make money.

So they will lobby for a favorable carbon tax which will allow a lot of their ccos and blue hydrogen projects to actually be profitable and they still enjoy that profit. So all industries are not going to go away, they will just turn into big energy and, for example, if you take the companies like pure renewables, pure renewable companies are not global companies, they are reasonable companies at best. But if you go to shell, shell present everywhere in the world chevron is, is global, so big energy is going to be very similar to what the big wireless student looks like, but in the short term it seems like uh. Elevated pricing is inevitable, based on what you're saying right now i mean tom this these people have suffered for eight years.

I was there in the industry. I have seen these people like the producers, the pr those producers like negative prices, negative prices. Things were really bad. Okay, i tell you like how bad the sentiment was.

They have become extremely cost disciplined and suddenly now they have such a high premium. So you are just sprinting, pure cash at this point, why why would they change the the dynamics now they know that this dynamic is not going to stay forever, but if they can stretch this dynamic, they will fill their coffers and they watch us for the for The whole energy transition moves. They are not going to change, they are nobody wants to change anything. Everyone likes the worst things that can happen.

Is that like, if i'm an oil producer, i i should be praying for russia, ukraine, war, to continue and sanctions to continue, see it's uh, even if the war stops now, the supply cannot come back. Everyone knows that part. So everyone knows that when you explain why see, even if the war stops now, europe will not buy oil and gas that freely from from russia, because this i mean the the situation has gone to a point where europe has to stop depending on russia. Okay, so, for example like if a wall stops it's easier for other commodities, but not for oil and gas to come back that easily.

Hmm there's also this comment right now, which is, i think we i haven't spoke about it finkan saying people also forget that oil is more than just energy. Almost everything we use is made from some form of oil by product. So it's fair to say that oil is the biggest contributor to inflationary pressures right out of the so oil and water probably are the two biggest right yeah i mean energy like we, you remember last time we discussed that that, and it was i remember it was Just before the the march of high inflation number came, and we discussed that particular time that when energy becomes the main contributor for the inflation there is no match. I mean you and you know at this point there is no.

There is no pathway uh that can reduce, so you know if you go back like, for example, if you go back in in 2009, so 2008 oil price was 147 okay and then the oil price would only drop to 39.40, and so that particular time, if you See what saudi was doing, saudi was cutting like a million dollar million barrel production per day. So you see, that is the kind of impact you need to bring things back so there's little spikes that are relevant for them. They don't care yeah, it's uh! It's just uh: these are just the tactical and the diplomatic movie you ask for some oil. We give you like 300 000, which is not gon na bring.

You want to bring back oil back to 60 70. You need to figure it out, uh extra 5 million. So you just removed based on my very lame and non-professional mathematics, so russia is producing 11 million barrels a day like at least produced right, so and also geographically they're. The only producer like in europe proper, like if you have saudi u.s canada, mexico in europe, like also there's logistics with oil.

Right like this, the location is important, so they're in europe they're producing 11 million barrels a day third biggest manufacturer in the world. With about 10 percent of the global oil supply, you kind of carved them out and now they're selling for less, but they are selling to india. They are selling to china. They are selling to iran, whomever right so they are still selling this at 80 cents.

On the dollar, whatever they're still making good money on this, and these companies are buying cheaper oil, which is great for them right. But now we are basically because now we just we just slash demand supply significantly and we have no alternatives but to go on national tv and blame putin for what's going on right now. Did you see that i know i mean there is a difference up to what extent europe is screwed and up to what extent u.s is group, so, for example, if you see europe, europe is still buying oil and gas from russia, but use that i mean u.s Said we will not buy and that's why they are buying less so so u.s has actually created more problems for them than the europe has created. I mean europe is saying yeah.

We will move away from it, we will ban it, but they have not banned it. Yet they have, they are still using russian oil and gas a lot okay, russian oil and gas cannot enter in u.s. That is the situation that u.s has created for themselves. Okay - and you know, oil will always find a way to to to different shows people.

It's an industry, that's how it has survived, but isn't what just happened now such and changes the paradigm as far as how the us administrations going forward would think about this rather than thinking about you know. Since the 1990s, the us has been going through this process of the bottom line is everything: let's maximize margins, let's ship jobs, production, everything, let's ship it outside, let's, etc, etc. So now there's this change. Where we're going back to like 1985 1986, where oh there's geopolitical risks, there's supply chain risks, not everything is just bottom line profitability and we want to have production onshore.

We want to be energy independent. So if that changes happens - and you know it probably would not happen with this administration, but the one that will follow, i'm assuming that will have a better understanding of the importance of of of keeping production on shore. Would this not cause uh the us, produce all producers and and also all sorts of oil related companies to actually ramp up production and and take back energy dependence? So there is a difference this time, uh tom, see, for example, if you take the time of bush and obama. Okay, the company is coming out of bush to obama so bush to obama administration.

They knew things will change, but nobody expected things to change like day and night, and that is what is happening between trump and bada. The the governments are going into quite extreme. So if say, i'm a i'm an investor and i'm an oil producer. I am thinking next 20 years ahead.

Yeah, so things are, things are changing a lot and and to be fair, like i mean obama has been my favorite president in us history, so i mean when i, when i criticize the democratic democrats and the government, i mean it, it's always it's not something. I want to do, but what is happening is that it's a very narrow, focused administration. At this point, they just have like some title headlines and they just want to keep those title headlines alive, no matter what the cost is the solution for say, for example like why so many jobs and x industries have been outsourced out of western world, especially europe, And us, because there are the belief that they have the power, so they can manage the relationship and pressurize that, even though the critical infrastructure is outside, they can still exert power and pressure to kind of control. It the only to learn after like 10 in 15 years, that it is not going to happen.

Okay also, what happened with the success of companies like tesla, and if you see like spacex uh, the i mean ilan was like he has shown that yeah you can make money and business in lot of other ways. Also without offshoring things. Okay, you do a proper vertical, integrated, uh supply chain and manufacturing. You can actually build different sources of advantage, so there is a shift that is happening also uh.

The question is: who makes most of it companies or countries like china or countries like us? I think that's pretty much going to be the defining factor. Do you find it laughable? Because i do to be honest and it's a little bit of a guiding question. I'm aware of this but uh i kind of like to ask questions with my own opinion built in i. So i would you agree with me it's laughable that, after years and years where the us are like, when i was a kid in the 1980s um and even in the in the 1990s uh u.s, cars were the best in the world.

Okay, if you got a us like a like a chevy or a ford truck, they were the best best technology, best electronics. They were unrivaled. This was like the dream. I always dream, like my dad, will have like a an american car, etc, etc.

Right and then what happened is that over the course of the or the 2000s, the japanese, the koreans have completely demolished the us auto industry. So at this point, uh gm and ford and chrysler are lagging behind for the past 20 years, trying to play catch-up being bailed out by the government carrying massive debt, basically trying to survive while they're getting absolutely destroyed by by a korean and japanese and now soon Chinese companies and then all of a sudden, you have an american company, fully integrated in the us that is kicking everybody's ass taking over the world, and the government is making concentrated efforts divide in administration. If you don't like it, unsubscribe is making concentrated efforts at kicking. This company, the nuts and basically uh saying how great the failures of gm and ford are and how tesla should be ignored.

I find this just. I feel like we're in the monty python skit at this point, because this is just not unreal. You know what i mean. No, i agree, i mean it looks unreal, but there's a there's, a reason for that see in politics there are, there are some tenets that you you need to follow before anything.

The first tenet of the politics is, is the only good things are those that are under my control? Anything that is not under my control is evil. So that's pretty much. What is happening is like okay. They don't think that they control elon, musk elon musk has a lot of say and a lot of power in terms of drawing or making move about an opinion, so they don't control it.

So, from their point of view, elon musk is, is it doesn't follow that the second thing is uh? Tell me tom: do you really trust somebody who is 75 80 years, and he comes to tell you that i am taking these five steps so that 50 years down the line your life will be better? I would prefer a 40 year guy to make that decision. So you see these people, they do not have a shadow of the future. There is no accountability here, so people who are going to make that decision - and you also need to remember these - are the people who made the seasons for last 50 years and whatever mess. We are in two days because of that decision, so they don't also have the context to make those decisions.

Also. So, from their point of view, it's a game of control. It's a game of power. It's not a game of serving people as they are showing, because us is one country i mean u.s is like the way media projects.

It shows that u.s are two different countries. I know i disagree with it. I mean, of course, there are extreme infections, but i would still say that 60 80 percent of people are not so different as as fox or cnn shows. Okay, so it is.

It is ridiculous, and you know these are the kind of questions i mean. Like things. Go back and you sometimes go back and like, for example, you and i we came from a generation. We can never imagine that u.s knows its power status.

This is something which is kind of given for us that u.s is always going to be a dominant country. But when you see things like this, then the question you ask is: are these the earliest signs of u.s losing that kind of dominance? Because of the people who are ruling the country in this regard, there is no longevity in terms of policy policy changes with every time there is a new administration, that's not going to to help. So the one thing i can agree with you here and i think this is your argument. I want to tell you if this is what you, what you mean the most important thing when you invest in, let's say: you're, looking at investing at emerging markets right and then the one, the first question as a as a consultant, i was asked by my clients Who were mainly western companies trying to look in eastern europe and emerging markets? The first thing they asked me well, the two questions.

The first thing to ask me: we will go to jail if you do this always. The second question was: what's the regulatory governmental, uh supervisory stability of the current set of rules, for example, if there's a benefit for a certain amount of for a specific business operation? How likely it is that the next government is going to come in and change it. So in the emerging market that was always a question, the strength of the us was always in the stability part. You knew that no matter who takes the the reins, the certain basic truths will remain to allow stability and that makes investment much more attractive into countries like the us.

Now still, in my opinion, the us is still the most stable economy to invest in, but i think this stability level has eroded immensely. Ever since we had the change of administration uh from trump to biden, because biden people came in and just basically said that everything like completely like good bad, doesn't matter, let's just throw the baby with the water. So this kind of thing - and i think it erodes a lot of the um incentive for money to flow into the u.s and also internal investments like we talked about it all companies refiner. Nobody wants to invest in uncertainty, especially with long-term infrastructure project.

Now i totally agree with you and you're you're on the money here that, when you're looking for large term projects, so, for example like i was looking at some of these mega capital projects, so so so i i was attached to the micro hybrid project practice with Boston, consulting as well, i mean published couple of papers on that card as well, see uh. If you want to build something in california, i mean you when you see the cost of something is going to build in california, it's immense! It's it's ridiculous! Okay and the same thing like so question, is we talk about infrastructure? What, when we talk about like when we saw like these stimulus, this large buildback pattern and see the cost and what is going to build? It's not smart capital deployment, okay, so that is what is happening is that they promise things, but they do it in a way that creates value for no one. It only creates value for for certain people and certain companies. So that is what i think so see.

Why somebody like me, who, who grew up in india and appreciated us, is that u.s is a country that gets things done? Okay, they set up a site on something they get it done now. When i see today, i see that u.s still is a country which gets things done, but actually it's not the us government. If there are certain people in us who gets things done, u.s government or administration as a whole is actually stopping these people or building policies. Who are getting things done.

So it is very different in in last 30, 40 years how things have changed. So i guess for uh the last 15 minutes of our chat. I want to pick your brain a little bit on the non-oil related questions. You and i are both very outspoken investors of a palantir, and this is a topic - that's been heavily debated.

I want to kind of hear we never spoke about this on air because we mainly focused on on oil so far, but i'm kind of known to be the head, the head bull of palantir on the internet, but i don't think many people i realize, because i Bring you on in your hat as an energy expert that you also quite interested in palantir. So can you walk me through like a five-minute bull thesis of um number, one? Why are so excited about volunteer and why you think the price is going to come much lower than it is today, because i know that's what you think: okay, so uh, so i work in oil and gas and my current role involves i'm a data strategy advisor Of a very large company i mean very large, i could always say i have done several digital transformation projects in in energy industries. So that's how i got exposed to like what are the different challenges that you get to save it. So when i see palantir i mean - and i've shared it in past in terms of product solution, there is no match.

There is literally no measure. Okay, i think what people miss is the complexity of data, the the velocity, the variety, the volume there is no way. I mean all these companies are going to put all of their data at one place. You need some solution which is kind of ontology that works out when you see how much oil companies spend on data - and you see okay, like what is the what is the largest transaction, that is happening.

What happened? It is with valencia, okay, so why companies are investing so much money uh on balance here i mean because the kind of value they get out of it has a lot of issues with it, which they need to sort it out. Okay and i've been, i mean like even when i met the energy team in in talent and i'm very vocal in sharing my view like what they are doing is right or what, where the areas they can improve upon. But when you try also information later about that meeting, also once you're finished with the thesis is this okay? The discussion said like most of the time the discussions you do with the companies are pretty much like under uh non-disclosure agreements. Okay, so let's just say you met with volunteer team and uh.

You had first-hand experience yeah, so the i'm, not someone from retail who don't know what they do. I exactly know what they do. I exactly have seen what their product creates in terms of value. I also understand like what are their internal challenges at this point, which is, which is why they are coming like few things.

They need to sort it out. Okay, so product is unmeshed. Okay, when i see the macro of the sector see for me, three things are more important when i invest in a company that first, this company is going to be around in 10 years down the line, because if a company was bankrupt coming it doesn't matter how Good the product was so yeah zero debt, i mean they are critical for u.s infrastructures and u.s, uh security and all, and what a lot of people don't know that companies which are critical for for us, for whatever reasons there is always a kind of a backup Plan like if companies start going into undergoing concern, there is a backup plan to sustain that company, which nobody discussed, and it never comes out on on on out. But there is there are people in in in in different departments who take care of this part.

So is balancing going to be around in 10 years? Yes, okay is the sector pretty hot? Yes, i mean the expenditure in sector, whether you call about digital train, the data platforms, the ai ml supply chains, ai at scale i mean yeah. They are going at a cager of 10 to 30 every year, so that means every company. Every company in this sector has a good future as long as they manage to stay around during this recession and downtown okay. I do not see a future where snowflake goes 10 times from here and palanthia stays here.

You see all these companies are moving in unison. They are going up, they are going down the difference. What is happening like when you see a company like snowflake? It has a very high institutional ownership. Okay, so that means it's.

It's multiples are far higher when we look in terms of a paralympian but valencia, multiple of nine versus snowflake multiple of 28.. It's not justified from my point of view so think about this uh tom. Let's say that palantir goes and palanthia builds a revenue of 5 billion, okay, which is reasonable by 2025, okay, and we still take a multiple which we have as of today, which is nine, which is beaten multiple at this particular point. We still talk about a company that is 45 billion market cap that is still more than 100 percent from what it is now.

If a market bounce back, okay and people realize that the product is good and the difference between a snowflake and palantir, multiple still stays, but it kind of converges a bit and we talk about a multiple of 15 to 20. Then we are talking about a company that could easily be somewhere around 75 to 80 billion okay. Now, if the company comes out really well and they manage to sort out their issues, they have in the self-serving capacity, i mean it can even go higher than that. So when i see like in terms of risk and reward to me, the reward is far higher.

Valencia has several issues. They really need to sort it out, but like today, that stock is 87 percent down yeah, so many stocks are down at this particular point. Yes, i mean it's, balancing is not the only one i mean tesla is almost like 40 50 versus 40 45 percent. Down i mean the snowplay is around 60 percent.

Down from its top, i mean ai is down like more than 90 percent. So when i see this, criticism like of colombia is down from 45 to 6 yeah, but you need to also be very clear that what is macro market macro? What is sector macro and what is company performance? Okay, yeah? It's not like the market when went up and volunteer went down, so so nasdaq is down like what 35 percent over the past six months index is down 25. and then there is also the difference. I mean like what is happening because now the the amount of passive investing is quite a lot.

So when you invest in passive investing, it's a weighted volume weighted investing. So that means what is happening that money over that time goes from the bottom of the market. To the top of the market, so index is actually so when the index is uh decreased by 20 25 percent and when you're high tech, there's a divergence. Okay, industry or the market are expecting indexes to fall further, but a lot of these companies are already into very undervalued territory.

So, in my case, because i know the product i have talked to people in company okay, i have talked a lot of people in their competition, their customers, so my view for them is is quite bullish. But that's me, i would you agree to me that their biggest challenge in the way they sell the commercial side of the product, because obviously they have no problem with the government side. They have that perfected. They have been doing this for so long and you know what they say once you're in the government you're in the government.

This is kind of very hard to lose these contracts, especially when they kind of became the kind of the spacex to the nasa, like the volunteer to the cia, this private kind of intelligence agency for the government, but my question is because i'm more interested in commercial Side so the commercial side, it seems to me they're, faced with massive challenges, because even though the product i agree with you is unrivaled, and if you don't believe me watch some of the slides i've shown i've. I've broken down the work they did with um with airbus and some of the test cases that appear in the internal presentations with airbus. You can see that the product is just insane yeah, but airbus is very different than the us uh b2b enterprise, software, marketing and sales, because it's a very closed club with relationships uh being already existent and your sales force is brand new. It's green.

Nobody have relationships and they're a little bit like a bull in the china shop, so they're coming in and these guys have already invested tens of millions into this infrastructure and then they they need to slowly convince them to to move. But it seems to me like they're, going right now about it, and i spoke about before it's like this: alex. Has this mentality of yeah just destroy everything? Let's build it scratch. This can be better yes, but it doesn't work politically inside these big organizations.

If you try it this way, while instead, you should basically do more of kind of hey here's, the free feature you can use and learn about the software and you build lobby around it which kind of uh which they haven't been doing see. Palantir has made several mistakes. Okay, the first mistake valencia made was that they didn't invest in their sales first because they thought that product is so good. People will just buy it, and that was a that was the longest see in a b2b context.

People don't buy things just because it's good people buy things, because they try to visualize that once this thing is bought, how the company dynamics will change how, especially in enterprise software, especially in enterprise software, so that so there is a context which is more important. I think this is where they they under invested and they thought we have such a good product. Everybody will just buy it. I think that he said it in the interview.

We don't need sales, people yeah, and you know i discuss like so so you know in my role. I spend a lot of time studying companies like why one company is so good and then, at the end of the day, i have to kind of nurture it down to like five six bullets to a single executive like why a company succeeds in a certain. So in a data and digital world a company to succeed, it has to have certain characteristics. The one of the first characteristic that company has to have a product which is like a killer product.

That means everyone wants it. Okay, so foundry for us is a killer product, but a lot of people in industry even don't know it. So it's a killer product, but people don't know about it. So, in a way, it's not that killer, because people are still have not reached the point where everyone says that i don't care.

I want fondry in my office. It's not commoditized like snowflake, where it's just simple: it's not it's not in a way. The second thing is time to value that, yes, when foundry is installed, it can deliver value fast. So time to value is pretty good in execution phase, but acquiring foundry.

That means reaching somebody in talent here then getting the procurement done is not easy. So the time to value, if you see overall in terms of procurement is, is not simpler. The the entry ticket is quite high, so you need top down and executive decisions on that one. The next part is flexible and scalable.

It is flexible and scalable once it is purchased, but it is not flexible and scalable when you are in the process of purchasing you have to okay, either you buy like this or buy like that. Nothing is like product have to be very thin. That means like, for example, a lot of time you you are missing something, and you say okay, i mean this is like 25. I will spend more time thinking about it.

If i need to decide why just buy it so the product is thing. That means, if you spend time you will actually waste more money than the product actually is. It doesn't exist with valencia. The portability interoperability is, is stock class.

I mean you take the case of bp. They have aws and azure in upstream downstream whole different ways, but they use ontology to connect it. The domain expertise is something they have worked hard. Their domain expertise, especially in terms of government and medical, have improved, but they need to bring more domain expertise to all the industries.

They sell. Okay, the low code no code, the the si integration, the partner ecosystem market place. These things don't liquid, they don't, they don't exist to make it uh. Mark i mean they have local no code, but can you access it like bubble, iu or webflow? No.

Can you access it like power rest at this point? No, so these are the kind of things which are missing. If you go to snowflake, i mean snowflake, i have said: snowflake is a gold standard. When it comes for partner, ecosystem and client relationship management, there is no company that comes close to it, even the the overly government. So that is something they have a simple product.

It's just a database here you go boom out of the box and you know every time i interact with the snowflake team. I mean it's just pleasure. I mean these guys. Are they know how to approach that client and how to approach their product? Has certain limitations, but that's why their partner ecosystem is pretty good to help it.

So there are things which which valencia has to sort it but, like i said it's easier to solve some time the business and non-technical things when you are talking about the sectors which requires really cutting his technology.