BP has had a legendarily bad experience with its investments in Russia, but in some ways this has been a direct result of its decision to jump into a high stakes political game.  Various news media are reporting on the company’s fall into fourth quarter losses (to the tune of $3.3 billion), and Forbes in particular is pointing to the hard hitting costs of BP’s gamble on Rosneft (a $517 million writedown) as well as its bruising fight with their partners in the TNK-BP fiasco.

Both problems show the strategic weaknesses of a corporation playing outside the margins of pure market logic, seeking to achieve political currency among interventionist states.  Let’s go all the way back to look at how BP first got involved in Rosneft, first with its participation in a rigged auction for Yukos assets (the only foreign company which dared to sign up for the sham – that is until the Italians out-did them with an actual acquisition), and then its ill-considered investment of $1 billion in the first stock flotation of a Russian state company consisting nearly entirely of stolen assets.  The warnings of potential conflicts resulting from these kinds of decisions were prolific.