It seems BP
After months of agony and asset sales following its April tragedy aboard Transocean's
The companies expect to spend up to $2 billion for seismic studies and drilling in the first phase of their exploratory effort. They're already working together with minimal success off Russia's Sakhalin Island, where ExxonMobil
The agreement represents history's first cross-shareholding between a major international oil company and a large national oil company. As BP CEO Bob Dudley said, "We are pleased to be joining Russia's leading oil company to jointly explore some of the most promising parts of the Russian Arctic. This unique agreement underlines our long-term, strategic and deepening links with the world's largest hydrocarbon-producing nation."
There's real irony in Dudley's remarks, however. It wasn't long ago that he was CEO of TNK-BP, a 50-50 joint venture between his company and a group of Russian billionaires. The partnership still represents a quarter of his company's worldwide production and a fifth of its reserves. Nevertheless, in 2008 the battling between BP and its Russian partners reached the point that, when Russian authorities refused to renew his visa, Dudley found it necessary to leave Russia and run the company from abroad.
Feathers in the partnership were eventually smoothed, but not before the CEO post had gone to a Russian. Indeed, as France's Total
Further, as The Wall Street Journal pointed out over the weekend, in Russia "the risks are high." There's even carping from U.S. Rep. Edward Markey, D-Mass., who became perhaps BP's toughest critic during the Gulf spill. "BP once stood for British Petroleum. With this deal, it now stands for Bolshoi Petroleum," said Markey.
Nevertheless, Dudley clearly is still willing to take chances in Russia, and with BP's shares still well below their pre-Gulf spill level, Fools would be well-advised to bundle up and watch the action in the Russian Arctic.
We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Fool contributor David Lee Smith doesn't own shares in any of the companies named in the article above. The Motley Fool has a disclosure policy.