Credit: After a failed alliance with BP, state-run Russian oil behemoth Rosneft is now looking farther West for a new friend, and ExxonMobil seems to fit the bill. Rosneft CEO Eduard Khudainatov told the Russian media that he is in fact holding talks with ExxonMobil ( XOM , quote ) to develop the Val Shatsky field and other Black Sea projects. XOM has some tough competition in the territory, which has a troubled past. Chevron ( CHV , quote ) was initially on tap to help drill the 6 billion-barrel project, but bailed in March because it failed to see much upside in having to front the entire $1 billion in costs for only a one-third share of the profits. But since then, both XOM and French rival Total ( TOT , quote ) have emerged as potential replacements. The fact that Khudainatov is even talking about XOM indicates that they are probably the most favorable partner here. Having Exxon at the table would be a bigger positive re-rating catalyst for Rosneft than BP -- which the Russians courted aggressively as an Arctic partner early this year -- ever would have been. XOM is the best run and smartest global integrated E&P company in the world in terms of emerging-markets risk. Rosneft theoretically trades as RNFTF ( quote ) in the United States, but for all practical purposes volume is nonexistent: As such, the easiest way U.S. traders have discovered to get exposure to this giant company's news flow is to use its would-be partners as proxies. Back in January, BP shares initially surged on news that that company was embarking on its own, far more ambitious tie-up with Rosneft, but as enthusiasm about the deal waned, the gains evaporated:
A deal in the Black Sea could have a smaller but longer-lived impact on XOM.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
