The Way The Oil Business Works In Russia

I know the term 'kleptocracy' gets thrown around a lot (ok, well maybe not that much), but Russia's dealings with major oil companies is getting transparently corrupt. Yesterday, Exxon signed a deal with a Russian state-owned oil company to drill in the Arctic and Black seas. Any doubts about how closely the Russian government was involved in the deal are wiped away by the fact that Vladimir Putin was at the signing of the contract.


Then today, there is this:

BP has confirmed that bailiffs have raided its offices in Moscow.
The company said their arrival was linked to a case in a regional court in Western Siberia relating to the collapse of BP's Arctic oil exploration deal with Rosneft.
The deal collapsed because of a legal challenge from its Russian partners in the joint venture TNK-BP. The deal has now been done with Exxon Mobil instead.

I guess that this is the new normal for business in Russia these days. The winner gets a huge deal orchestrated by the former President, current Prime Minister, and possible future President. The looser gets a government raid related to a civil suit. Now, these shenanigans might not dissuade oil companies from doing business in Russia, as those executives would sell their mother for access to a great untapped oil field. But can you imagine that this will encourage other businesses from doing deals with Russian companies?