Russian Prime Minister Vladimir Putin said OAO Rosneft, his country's largest oil company, could partner with Royal Dutch Shell, Europe's largest oil company, in an offshore partnership that would be similar in structure to Rosneft's pact with Shell rival BP that fell through earlier this month.
Rosneft is still in talks with BP (BP), Europe's second-largest oil company, but observers believe that the proposed Arctic alliance between the two companies is all but dead at this point. The Russian oil giant needs a partner with the technological expertise that BP has and deep pockets and Shell (RDS-A) fits the bill on both accounts.
Russian news agencies quoted Putin saying Friday that Shell could team up with Rosneft on the same conditions that BP and Rosneft were supposed to work under, the Associated Press reported. Those terms included a $16 billion share exchange that would have seen Rosneft pay $7.8 billion for a 5% stake in BP.
While Shell's U.S. rivals have also been rumored to be possible options for Rosneft to replace BP with, Shell has been frequently thought to be the leading contender. Shell is believed to be open to a share swap, something that might deter U.S. companies from pursuing an Arctic partnership with Rosneft.