Surprise Courtship
Today's Financial Times reported that Total of France (formerly TotalFinaElf) has the backing of Russia's government in acquiring a 25% stake in Sibneft, which is in the process of unwinding its merger with Yukos. This comes as something of a surprise on this side of the pond, considering that ExxonMobil and ChevronTexaco were widely seen as the leading bidders, with moral support from the US government.

Total is hardly a household name in America, having exited its modest refining and marketing presence here some time ago. In fact, its production levels and sales and profitability (at current dollar/euro exchange rates) put it in a dead heat for size with ChevronTexaco, behind ExxonMobil, BP, and Royal Dutch/Shell.

Total is also well-positioned to take advantage of the current geopolitical situation, in which some governments may be looking for an alternative to American or British companies. In bidding for Sibneft, Total looks to benefit from the closer relationship that was forged between France and Russia in the leadup to the Iraq War. Although the French government no longer hold its "golden share" in Total, the company still enjoys a unique level of government support and sympathy, as the sole standard bearer in this key industry.

Besides being the largest refiner and marketer in Europe at the moment, they have clear aspirations to become more global, complete with a new logo meant to symbolize global activity and multiple forms of energy. I suspect we'll see more moves like the Sibneft stake in the future.