Arctic oil
January 15, 2011
BP and state-run Russian oil company Rosneft's announcement on Friday of a joint venture to exploit the Arctic's vast untouched energy resources quickly sparked outrage from the green lobby.
Environmentalists were especially critical of the plans in the light of BP's devastating oil spill last summer, which released millions of barrels of crude into the Gulf of Mexico, causing widespread environmental damage.
"The Arctic is the most fragile environment in the world in which to drill for oil and there can be no confirmation yet that BP has learned the lessons for the Gulf of Mexico disaster," said Greenpeace spokesman Ben Stewart.
"Any company that drills for oil in the Arctic forfeits any claim to environmental responsibility," Stewart added.
Russia and BP defend the deal
But Igor Sechin, Rosneft's chairman and Russia's deputy prime minister, told English-language television channel Russia Today on Saturday that BP had learned from its oil spill experience.
"They have gained a great deal of experience, including in the Gulf of Mexico clean-up operation," Sechin said.
BP chief executive Bob Dudley told the same program that BP would have a "renewed focus on safety and risk management." A BP spokesman, Toby Odone, stressed that the project would be developed in the "most environmentally secure and safe manner."
British Energy Secretary Chris Huhne welcomed the "groundbreaking deal," saying it was "good news for Europe, the UK and energy security."
Investors also concerned
The two firms will explore and develop Rosneft's three licensed blocks on the Russian Arctic continental shelf, which are believed to hold major reserves of oil and gas. For the joint venture, each company is issuing shares worth some $7.8 billion (5.85 billion euros).
The area involved in Russia's South Kara Sea is roughly the size of Britain's territorial waters in the North Sea and is one of the world's few unexplored reservoirs of oil and gas.
Environmentalists, however, are not the only parties concerned about the deal. Analysts in the United States said the tie-up with Rosneft would leave BP well placed to capitalize on Russian oil interests, but risked upsetting investors who won't like it becoming a quasi-Russian company.
A US congressman, Democrat Edward Markey, who sits on a natural resources committee, called for the deal to be examined to see how it affects BP's US operations and America's national security.
"BP once stood for British Petroleum. With this deal is now stands for Bolshoi Petroleum," he said.
Author: Gregg Benzow (AFP, Reuters)
Editor: Kyle James