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Arctic ambitions for Big Oil?

A sleepy academic institution, the Russian Geographical Society, woke up last year to find Prime Minister Vladimir Putin sitting at the head of its board of trustees. At the time, no one seemed to have an answer for why this ancient body should suddenly be of such interest to the government.

This month BP CEO Robert Dudley was invited to meet Vladimir Putin at the society's headquarters in Moscow and was appointed to the board of trustees, along with Moscow Mayor Sergei Sobyanin and Sergei Chemezov, head of defence and manufacturing conglomerate Russian Technologies.

Dudley also used the board meeting to talk with Rosneft president Eduard Khudainatov. The apparently chance meeting neatly circumvented an international court order banning the two companies discussing their $16 billion shares swap and Arctic exploration deal, signed in January. BP's partners in TNK-BP, the Mikhail Fridman-led AAR consortium, are challenging the deal in London's High Court.

The BP and Rosneft chiefs just happened to be seated next to each other at the board meeting, and a translator "luckily" happened to be nearby too, sources close to the companies told Vedomosti.

But the society may be more than just a convenient meeting place ­ BP's involvement in it may be aimed at boosting Russia's claims to huge swathes of Arctic territory.

Lomonosov Ridge

In 2007, Russia sent an expedition to map out the Lomonosov Ridge, a 1,800-kilometre underwater continental shelf spanning the Arctic, and planted a titanium Russian flag on the seabed at the North Pole. The Natural Resources Ministry then announced that the crust's structure backed Russia's claim to large parts of the Arctic ­ but this claim is being disputed by other countries.

In 2008, the US Geological Survey estimated the Arctic's reserves could total 90 billion barrels of oil and the equivalent of 44 billion barrels of gas liquids. Spokespeople for BP and the Russian Geographical Society declined to answer questions about whether BP's clout was being used to boost Russia's Arctic claims.

Vladimir Buyanov, a spokesman for BP in Moscow, said: "Dudley's membership on the board of trustees at the Russian Geographical Society is the first step in the cooperation between BP and the society. We will work out the nature of our future cooperation over the next few months.

"Our number one priority is safe and environmentally responsible operations. We are ready to share what we've learned with the [society]."

Forums and expeditions

This September the International Arctic Forum takes place in Arkhangelsk. Ahead of that the geographical society is undertaking an expedition to the Novosibirsk Islands, which it says will herald a new era of polar research.

The society has also sought to forge alliances with environmental groups such as the World Wildlife Fund, but some activists are concerned about BP's intentions.

Alexei Knizhnikov, head of ecological policy, oil and gas sector, at WWF Russia said: "We are very worried that BP is coming to Russia, because with such a bad background as the oil spill in the Gulf of Mexico, the company doesn't take into account that new projects, especially such risky ones as in the Arctic should not be their first priority at the moment.

"As for Dudley's membership at the board of trustees at the Russian Geographical Society, then I believe this was only done to establish good contacts and relations with Russian top officials."

Russia recently filed a second request with a commission of the United Nations, which will decide whether Russia can claim a swathe of Arctic territory.

Differing claims

Nikolai Osokin, senior researcher at the Institute of Geography at the Russian Academy of Sciences, said: "It's difficult to say whether this claim will be approved by the commission because...Western geological theories and the Russian ones are different and that is why there are disputes about the Arctic territory at the moment."

"There are also a political aspect to the problem ­ the commission believes that it's better to leave the Arctic alone, because every country that claims it as its own territory anyway has enough land (200 miles is a huge figure) ­ no need in enlarging the economical zone, I think."

If part of the Russian Geographical Society's role is to sponsor the science that underpins Russia's claims to Arctic territory, Putin's meeting with the society's board of trustees last week had a broader agenda: awarding 50 million roubles ($1.7 million) of funding.

In February the society issued a call for projects. The list of qualifying research was broad, including sustainable development and innovative research technology. But the centrality of the Arctic assignment is clear.

Whether the geographical society succeeds in buttressing Russia's claims to the Arctic may come down to the weather. The Institute of Geography's Osokin said melting ice has prompted excitement about the region's hydrocarbon deposits, but weather does change.

"There are figures showing the warming up in the Arctic is slowing down now, therefore we can say that the ice will stop melting, and it will become difficult to do anything on the Arctic shelf in... oil and gas exploration," Osokin said.

The Russian Geographical Society did not immediately respond to e-mailed questions.

Additional reporting by Lidia Okorokova

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