Russia gets the offshore drilling jobs … US sits on its duff.

Today, Russia’s Prime Minister Vladimir Putin announced Exxon Mobil has been awarded exploration rights in the Russian Arctic superseding efforts by BP and Rosneft the Russian state owned oil company.   This amazing coup gives the US based company the rights to the highly lucrative offshore fields.  Russia gets Exxon Mobil’s offshore drilling expertise and a massive investment.  From the NY Times:

The agreement seemed to supersede a similar but now-defunct partnership that Russia’s state oil company, Rosneft, reached with BP earlier this year. The deal announced Tuesday replaces BP, the British oil giant, with its American counterpart and introduces some differences in the geopolitical bargain.

Where BP had swapped stock, Exxon agrees to hand over to Rosneft unspecified assets elsewhere in the world, including some that the Texas-based company owns in the deepwater zones of the Gulf of Mexico and onshore in Texas.

In the announcement of the arrangement, coming after a surprise signing in the Russian resort town of Sochi, Prime Minister Vladimir V. Putin described a sweeping global alliance — and a potentially vast investment by Exxon in the Russian Arctic.

Mr. Putin said the total investments envisioned under the agreement could reach $500 billion, including a direct investment of $200 billion to $300 billion. It was unclear what the timeline would be or whether this included the value of asset swaps.

Contrast Exxon Mobil’s fate to Shell Oil which has Alaskan offshore exploration and drilling rights.  It has already invested nearly $4 billion in exploration, including $2.2 billion for the federal lease and was turned down for production by a fly specking EPA. Contrast it to Conoco which is being held up by the Corps of Engineers that won’t allow it to build a bridge and road to its lease in the Alaskan National Petroleum Reserve to get machinery in and a pipeline to get oil out.  And there is the granddaddy of all regulatory foot dragging, the deep water oil fields in the US Gulf of Mexico.

Tens of thousands of high priced American oil field jobs sit idle because of this administration.  They will remain so until it comes to its senses.  Putin will create jobs in Russia and get reelected to the Russian presidency in 2012.

Obama will not.

What is Putin's next move?

I am not optimistic the Georgia situation will be resolved successfully. Here's why. Already successive deadlines have passed for Russia to remove their troops, as agreed. They haven’t budged. It appears to be the big stall. And they aren’t stalling because they’re waiting to top off their tanks to return to the motherland. Already there are reports of surface to surface missile installations in South Ossetia capable of hitting Georgia’s capital Tbilisi. Their troops are digging in within artillery range of Tbilisi and they still hold Gori. Fox News reports troops near Gori are demanding western media show Russian press credentials, meaning the Russians are now free from prying eyes. But it’s more than just that.

It’s just not in Putin’s nature to give in. Putin sees himself as the person who will lead his country superpower status again, following in Stalin’s footsteps. He has resumed provocative Tu-95 Bear overflights of NATO exercises, a relic of the cold war. He wants the sovereign republics that were part of the Soviet Union back in the fold by any means. He rigged elections in Ukraine and Georgia only to see them undone in popular uprisings and legitimate elections. In Ukraine’s follow-up election, Russian agents poisoned the popular candidate Victor Yuschenko with a massive dose of dioxin, but failed to eliminate him. He won convincingly in a major defeat of Putin’s agenda.

Putin has eliminated political and media opposition. Too many writers critical of Putin have been murdered for it to be accidental, the best known, Anna Politovskaya. She had written a series of highly critical articles on Russia’s brutality in Chechnya. All TV networks are now in government hands. Newspapers have been shut down for hostile reporting and state advertising withheld. A new extremism law is being used to curb criticism of public officials.

Anyone who models himself after Stalin won’t exhibit weakness. Truces are for rearming. Most likely we will see a massive swift assault on Tbilisi to remove the vestiges of Saakashvili’s government. Count on it.