Russia leaves Arctic door open for BP

Russia on Wednesday left the door open for a return by BP to an Arctic exploration project whose collapse earlier in the week left the British giant without a clear future development strategy.

The state-run Rosneft oil company issued a brief statement saying it was reviewing new cooperation proposals submitted to it by BP in recent days.

President Dmitry Medvedev for his part said he personally approved of the Rosneft-BP tie-up and blamed government bureaucrats for muddling the $16 billion share-swap.

“I do not know what the final outcome of the deal between Rosneft and BP will be, although I do believe it is an interesting agreement,” Medvedev said in his first comments on BP since the deal’s collapse.

“If something does develop of it in the long run, I will be glad. It is not bad for our country,” Medvedev said.

BP had sought the Kara Sea exploration project as a way of securing future revenue sources following its sale of key fields to cover for the expensive cleaning up after the 2010 Gulf of Mexico oil spill.

Rosneft in turn had hoped the deal would transform it into the world’s largest publicly traded oil producer — a status it has been seeking since hoovering up the pieces of the broken-up Yukos oil firm.

But the much publicised alliance dramatically ruptured when BP and Rosneft failed to buy out the Russian partners of the British firm’s TNK-BP joint venture.

TNK-BP had been handed the Arctic oil exploration project by an arbitration tribunal and Rosneft refused to work with BP’s smaller and less technologically savvy local firm.

BP appeared a little phased by the setback and issued a statement on Tuesday saying both it and TNK-BP remained committed to both Russia and Rosneft.

And the Russian oil company replied in a carefully-worded statement of its own on Wednesday that it had no hard feelings for BP and still viewed it as a potential partner.

“As a result of the negotiations… Rosneft has received proposals going outside the framework of previously concluded agreements,” the Rosneft statement said.

“These proposals make it possible to discuss further cooperation outside the framework of the already lapsed agreement,” Russia’s biggest oil producer added.

Analysts have identified the US multinationals ExxonMobil and Chevron along with the Anglo-Dutch firm Royal Dutch Shell as potential replacements for BP in the Arctic sea work.

Rosneft will hold an annual shareholders’ meeting next month that should provide a hint of its future Arctic development strategy.

But analysts point to short-term difficulties for Russia because other companies may be unable or unwilling to take on — as BP had — the entire cost of developing the unprecedented project.

Medvedev took the unusual step on Wednesday of blaming his own government for talking to BP without thinking of the legal objections that might be raised by the firm’s Russian joint venture.

“Those preparing this deal should have been paying more attention to the nuances of the shareholder agreements and the legal issues that always arise in the course of such major documents’ preparation,” Medvedev told reporters.

“We should have conducted more detailed inter-governmental due diligence,” he said.

The tie-up was orchestrated by Russia’s energy czar Igor Sechin — a close ally of Prime Minister Vladimir Putin who lost his seat as Rosneft board chairman in the heat of the negotiations.

But powerful minister scoffed at the suggestion that he was somehow at fault.

“I do not view this is some sort of personal failure,” news agencies quoted Sechin as saying.