Spanish oil giant Repsol YPF is looking to the Russian independents for joint ventures and even admits that Russia is a country it "has to be in" to compete in the global marketplace. Repsol ( REP , quote ) is traditionally reserve-poor but often cash-rich, so Russia makes enormous sense for the company as the flip side of the coin. REP is already a significant minority shareholder in independent Russian producer Alliance Oil, thanks to its legacy holdings in that company's Swedish predecessor, West Siberian Resources, which merged into Alliance in 2008. But with only a 3.6% toehold in Alliance worth maybe $90 million as a strategic block, REP would love to explore more substantial joint ventures. Lukoil ( LUKOY , quote ) has been mentioned as a potential partner -- or even an investor in REP proper. However, talk a few years ago for a tie-up fizzled, and now LUKOY executives say they have no real interest in an alliance. Still, given REP's existing interest in Alliance and its Siberian reserves, it is possible that some kind of smaller-scale deal on the model of the BP-Rosneft alliance could be at least a possibility down the road. Meanwhile, REP could do worse than to angle for a closer relationship to those Siberian fields on its own behalf. This is a huge opportunity and Alliance is a relatively small company.
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