Russian Oil THE LEX COLUMN:
BP snuck into harbour before the Russian storm broke. Buying 50 per cent of
TNK-BP in June gave the UK oil major a strong position in Russia - the new
frontier in an ongoing struggle to replace reserves - ahead of its rivals.
ExxonMobil and ChevronTexaco are left at sea.
It is far too rough for them to land in Russia after the arrest of Mikhail
Khodorkovsky and the freezing of his stake in Yukos. Both US groups would
need clarity over Mr Khodorkovsky's future, the ownership of Yukos, and
the outcome of any power struggle in the Kremlin, before signing off on a
multi-billion dollar investment.
So who looks smarter? Chevron and Exxon might find that the current turmoil
locks them out of Russia for months, if not years, thereby increasing
BP's head start. But they can watch the shenanigans from a safe
distance. They have not committed cash. The perceived increase in Russian
risk could make an eventual deal cheaper. Both can sail away if the outlook
remains inclement.
BP, in contrast, is committed. It has secured a position in Russia which
might now prove tough to imitate. It got in before a sharp rise in the share
prices of Russian oil companies - partly triggered by the deal itself. The UK
group can claim that short-term political instability does not affect its
long-term investment case. And it has a modest degree of political cover from
problems, given that the deal was endorsed by both Vladimir Putin and Tony
Blair.
But President Putin needs to follow up last week's soothing words to
western investors with action. If he widens his campaign against the
oligarchs, BP could yet find itself exposed. Its joint-venture partner in
TNK-BP is Mikhail Fridman. There remains a chance that the UK group might
have dropped anchor, only to find that the unrest among the locals is more
than it can handle.
|
RUSSIA IN FACTS
