BP’s Russian venture offers big rewards and big risks
EARLIER this month Bob Dudley was ferried along the ten-lane avenue that links Vladimir Putin’s home to the Kremlin. The Russian prime minister shook hands with the boss of BP, sealing a $16 billion deal. The British oil firm will gain access to Russia’s vast and deeply frozen Arctic oilfields. It will also get a 9.5% stake in Rosneft, Russia’s state-controlled oil giant, to add to the 1.3% it already owns. In return Rosneft will get 5% of BP. The deal was announced to the world on January 14th.
It is the first share swap between a national oil company and a private oil major. It is also the first joint venture to explore in an area that could hold as much oil and gas as the North Sea. Far from keeping a low profile after its disastrous oil spill in the Gulf of Mexico last year, BP seems eager to prove that it is as bold as ever. …
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