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BP Inks Arctic Drilling Deal With Russian Company

BP Inks Arctic Drilling Deal With Russian Company

In its first major deal since the Gulf oil spill disaster, BP has entered into a joint venture with a Russian energy firm to explore oil and gas deposits in the chilly waters of Russia’s Arctic shelf.

Following completion of this agreement, Russian-owned Rosneft will hold 5 percent of BP‘s ordinary voting shares in exchange for approximately 9.5 percent of Rosneft’s shares.

“This unique agreement underlines our long-term, strategic and deepening links with the world’s largest hydrocarbon-producing nation,” said BP’s chief executive, Bob Dudley in a press release. “We are very pleased to be joining Russia’s leading oil company to jointly explore some of the most promising parts of the Russian Arctic, one of the world’s last remaining unexplored basins.”

What Dudley failed to mention is that this lack of exploration is due to the extreme danger of drilling in arctic conditions.

“In the wake of BP’s catastrophic leak in the Gulf of Mexico this spring, Russian officials and experts warn an oil spill under the ice could turn out far worse than one in warmer deepwater climates. Arctic conditions — remoteness, fragile ecosystems, darkness, sub-zero temperatures, ice, high winds — make dealing with an oil spill a massive task” (Deccan Herald).

And there are other reasons some in the U.S. aren’t so sure that both companies are being completely transparent about this “win-win” deal.

According to Reuters, U.S. Rep. Edward Markey called for a careful U.S. government review of the share-swap between BP and state-owned oil company Rosneft to see if the deal could have an impact on U.S. national security.

Some business analysts have expressed concern that the economic climate in Russia might be just as unstable as the deepwater drilling platforms the companies hope to install on the Arctic shelf.

“Russia is widely viewed as not a desperately stable environment for Western businesses,” wrote Robert Peston, Business editor for BBC News. Second, “Rosneft is 75 percent owned by the Russian government. So it will look to many as though the Russian government is taking a 5 percent stake in a company with strategically important oil reserves all over the world, including – of course – the US.”

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Map: Location and scale of South Kara Sea licences Credit: BP Global

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116 comments

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1:34AM PST on Jan 7, 2013

They should have been bankrupted for what they have already done, and yet somehow they still have $billions to develop these types of projects. The Russian gov't must have censored themselves from the news when the disaster hit the southern gulf.

8:18PM PST on Feb 22, 2011

So, they wreck our southern Gulf waters, and move on to wreck another area! OF COURSE it will impact us! We just stopped Shell from drilling in our Arctic waters, and BP drilling will have the same hazardous consequences ( the oil spills or blow-outs, WILL happen, just don't know when) when the spills drift eastward. The same problems exist whether in the U.S. or Russian waters. This is a world problem, and we must wean ourselves from oil!

I consider this more important than the national security problem of an unstable Russian government. We KNOW Russia is unstable.

6:45AM PST on Feb 6, 2011

The deal with Russia should never have gone through. Leave the Arctic alone - it is about the only place left on this planet which has not been exploited. The wildlife would be affected and there is precious little of that left.

9:15PM PST on Jan 22, 2011

thanx :0

6:02AM PST on Jan 19, 2011

i wonder how BP still manages to deal with governments, and get deals like these, after what happened in mexico due to their greed

6:01AM PST on Jan 19, 2011

i wonder how BP still manages to deal with governments, and get deals like these, after what happened in mexico due to their greed

8:01PM PST on Jan 18, 2011

Learn their lesson? Do this right? I give up . . .

5:33PM PST on Jan 18, 2011

thanks

4:38PM PST on Jan 18, 2011

How dare BP to go anywhere on this planet to continue their dirty little tricks! When and how will we stop them? We must say "NO" to the current energy status quo and demand sustainable, clean power sources! And we must use care in doing that.... there are those that still want to capitalize on: nuclear energy (as safe and affordable, which it is neither), hydrogen (still requires dirty fuels to produce), clean coal (a complete lie) and other corporate tricks to keep us PAYING them the big profits that they expect. The sun still shines and the winds blow for free. We need to ween ourselves from their ways of controlling us, think small and local and get out from under the devastating control of large corporations.

2:59AM PST on Jan 18, 2011

I agree with you Jack - all these oil companies should be held responsible financially for any disasters they create.
We have to stop this joint venture between BP and Russia.
NO. NO NO - We do not want anymore of this.

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