BP's troubles in Russia show Big Oil's clout fading

[Dover]

Source: Houston Chronicle

Last year, soon after Tony Hayward became chief executive of BP, a colleague and I met with him and asked, among other things, about the company's venture in Russia.

He described it as "stunningly successful" and pledged that "we are going to continue to expand and grow our business in Russia."

A year later, TNK-BP is in tatters. Russia essentially kicked the venture's chief executive out of the country. BP remains in an ugly battle for control, while almost a quarter of its annual production hangs in the balance. Russia's invasion of Georgia last week, by the way, forced the shutdown of a BP pipeline originally built to circumvent Russia's control of energy in the region.

TNK-BP was a hallmark of Hayward's predecessor, John Browne. Browne transformed BP into a global player and pushed it into Russia in a bold move that many rivals wouldn't dare attempt. Daring turned to disaster, though, as BP found itself unable to control the outcome.

Gone are the days when BP manhandled reserves out of foreign countries, as it did in Iran the early years of the last century. Once the lion of British enterprise, Russia has brushed it aside like a kitten.

It's not alone. The rise in oil prices has emboldened foreign governments with petro-fed economies, from Russia to Venezuela. Western oil companies have been shut out of major new oil finds around the globe for years. Now, they're finding it increasingly difficult to hold onto assets they already have.

Even when drilling rights are sold at auction, the majors often lose, outbid by state-owned oil companies that can afford to sacrifice profitability for supply.

In other words, Big Oil doesn't seem so big these days.

The exception, of course, is in Washington, where it's still villain of choice for high gasoline prices.
But in the rest of the world, the Seven Sisters that once dominated the global oil market now seem forgotten...cont'd





Read more: http://www.chron.com/disp/story.mpl/business/steffy/5947272.html

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I think this calls for some bubbley! (and not the crude variety either).

I'd like to teach the world to sing
in perfect harmony....