UK secures Russian oil deal
Economic ties between the UK and the Russian Federation were strengthened today as two of the countries’ leading oil firms signed a lucrative deal at a high-profile energy summit in London.
BP gained a 50% stake in Russian producer TNK, for just over £4bn in cash and shares over the next four years.
Russian president Vladimir Putin also attended the conference with Tony Blair, who described the UK’s relationship with Russia as “one of our most important international partnerships”.
The summit, jointly hosted by the DTI and Russia’s energy ministry, saw several key agreements which focussed on environmental concerns as well as trade, according to the Government.
Key features included a confirmation of the intention to co-operate on a North- European gas pipeline between Russia and the UK, and an agreement to co-operate at the highest level on energy security and investment, as well as climate change.
However, the Government’s oil link with Russia has been criticised because Mr. Putin has not ratified the Kyoto agreement on reduction of carbon emissions.
But Mr. Blair claimed that recent reforms in Russia’s energy sector have made progress on that front.
British companies have become increasingly involved Russia, particularly BP and Shell, making the UK the largest overseas investor in Russia.
The growing instability in the Middle East has made oil providers closer to home seem like far more attractive options. However, there are concerns that the UK could be relying too heavily on just one supplier.
