Exxon scores technical victory

On the beach of Sakhalin Island, some of the roughest, remotest terrain in the world, Exxon Mobil Corp. scored a major technical victory last month: It finished drilling a 7-mile-long hole, the longest between an onshore oil rig and an undersea oil field. Done in record time, the well marked a triumph in Exxon’s bid to unlock one of the planet’s juiciest remaining oil troves.

But the technological difficulty of Exxon’s multibillion-dollar Russian odyssey pales beside a slew of political challenges. The world’s largest publicly traded oil company has clashed repeatedly with Russian authorities over various details of the project – details crucial, in Exxon’s mind, to maximizing the project’s profitability. The fights boil down to a basic difference in approach between the oil company and the oil-rich country. For Exxon, the motive is money. For Russia, it’s a complex stew of politics and profit.

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