Bolshoi Petroleum, No More Opportunities

abarrelfullabarrelfull wrote on 19 Jan 2011 05:28
Tags: bp deals rosneft russia

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The proposed marriage between BP and Rosneft has ruffled a lot of feathers. In Russia, TNK-BP is upset that BP is going it alone, feeling that it should be involved. In the USA, BP a company already with a big PR problem, has taken more stick for cosying up to the Russia Bear. One new nickname is Bolshoi Petroleum.

From an industry prospective, it raises serious questions as to why the company should be once again risking so much in the Kingdom of King Putin.

Russia is a country where the leadership seems to make up the rules as they go along, and veer between recognition of the need for international expertise, and xenophobic desires for self reliance.

Rosneft undoubtedly needs the experience of a company like BP, which despite the fiasco of in the Gulf of Mexico has a huge amount of offshore experience. Yet that doesn’t insure the company from smash and grab politics in the future.

Bob Dudley, BPs Chief Executive has his own personal reasons to dislike his partners in TNK-BP, and the possibility that he is gaining a little revenge has crossed a few peoples’ minds. A very knowledgeable analyst that I spoke to raised this possibility before making any other comments.
However, the harsh reality is that BP has very little other options. With the closing of the US market to a company that had so much activity there, and the loss of so many reserves in a series of deals to raise cash to placate an angry and vindictive US government, BP desperately needs replacements, wherever they are.

At least in the same week they announced new ventures in the land of Oz, one of few places left that seem to understand the importance of the rule of law.

Its a little brazen for US politicians to be complaining about the deal, or to be raising doubts about its wisdom. A year ago, one would have said that the USA and Russia were light years apart in terms of political risk. It was the wish of the “chosen one” to “kick ass” that pushed Mr Dudley into the waiting arms of Putin.


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