Analysis

Russia: Putin Creates World's Largest Oil Company
Russian President Vladimir Putin (left) speaks with his friend Igor Sechin, the CEO of state-controlled Russian oil giant Rosneft on October 22, 2012, a day after Rosneft agreed to acquire TNK-BP to become the world’s largest oil company. (SERGEY PONOMAREV/AFP/Getty Images)
October 29, 2012
| Energy
| Russia and Central Asia
Summary
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With the acquisition of TNK-BP, Rosneft has become the largest oil company in the world and the majority of Russia’s vast oil and gas reserves have been placed under the control of the Kremlin. Though BP will retain a minority stake in the merged Rosneft and other major international oil companies will also remain in Russia for the time being, they will play bit parts, with Moscow, and even Russian President Vladimir Putin himself, calling the shots. It is a triumph for Putin, who has attempted to revive Russia’s superpower status with oil revenues and sees Russian power as closely bound up with its natural resources. But the world has reason for worry, with so much of the world supply of oil in the hands of one man.

Putin, it appears, is attempting to return control over Russia’s vast oil and gas reserves to Russian-owned companies. Some major international oil companies will be allowed to remain, as Russia needs their technical expertise to extract oil from hard-to-reach areas. Of these, BP will have a significant advantage.

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