Report: Russia joint venture shows BP still willing to take risks despite troubles

Reuters ran a smart analysis Sunday of BP’s decision this week to form a joint venture with Rosneft, Russia’s largest oil company.

Under the deal, announced Friday, BP will develop area’s off of Russia’s north coast. The companies also agreed to a share-swap.

According to the analysis, the deal indicates that BP is still willing to take risks, despite the economic toubles it faces as a result of the massive Gulf of Mexico oil spill.

“BP’s share swap and arctic exploration deal with Rosneft show the London-based oil major is ready to take commercial risks rivals might shun even after its battering from the Gulf of Mexico oil spill,” Reuters says.

And some analysts say the deal could work out in BP’s favor.

“Full financial terms have not yet been concluded and drilling is years off, but BP has a track record of making a success of deals that other companies have baulked at, so some analysts are optimistic this tie-up will be profitable,” the story says.

Meanwhile, the deal prompted skepticism on Capitol Hill Friday. Rep. Edward Markey (Mass.), the ranking Democrat on the House Natural Resources Committee, said the deal must be closely watched.

“The details of this deal and its impacts on the operations of BP America need to be thoroughly examined. If this agreement affects the national and economic security of the United States then it should be immediately reviewed by the Committee on Foreign Investment in the United States,” Markey said in a statement. “Additionally, the U.S. State Department should closely monitor this transaction.”

Rep. Michael Burgess (R-Texas) raised similar concerns.

“There are various different levels where this deserves some analysis and
some scrutiny,” he said, according to The Guardian. “BP is one of the biggest
suppliers to our military. Are there national security implications to
this deal?”