Gazprom, with urging from the Kremlin, has already pushed BP and Shell out of many of their Russian interests. The state-run company that supplies 25% of Europe’s gas needs, now wants to halt an Exxon-led project from supplying China gas and oil. Gazprom is believed to be close to a deal with BP over the huge Kovykta gas field. Last month, Russia’s environmental regulator began an audit of TNK-BP, focusing on whether it is meeting contractual output targets at Kovykta and threatening to tear up the firm’s license. The nature of any deal is sketchy and reports conflicting, but it appears to involve an asset swap, under which BP hands over some of its international properties, possibly including a liquefied natural gas terminal in the UK.

One scenario would see BP’s Russian subsidiary TNK sell its holdings in the $20 billion natural-gas project to Gazprom, but another option could be for BP and Gazprom to form a $3 billion global joint venture, with TNK-BP invited back into Kovykta as a minority shareholder. A TNK-BP spokesman said no deal had been reached, but told the Wall Street Journal that ‘it’s possible there may be something sooner rather than later’.

Meanwhile, Exxon-Mobil is locked in talks with Gazprom over its a deal with the China National Petroleum Corp (CNPC) to supply gas from its Sakhalin-1 project in Siberia. Gazprom argues that the deal would leave Russia short of gas supplies, but few believe the action is anything more than another attempt to claw back control of oil and gas assets which were sold in the 1990s. (