Russia is the largest country in the world, and sits on some of the biggest oil and gas reserves left in the world. When the Soviet Union collapsed, their oil exports took a big hit. The door slightly opened up to foreign oil companies who were willing to brave the politics involved to partner with Russia. European and American oil companies have the technology and know-how to offer. However, navigating the oil business in Russia is no easy task.

In 2011, The New York Times reported, “In the aftermath of the collapse of the Soviet Union, Russian oil output plummeted from an all-time high of 11.4 million barrels a day in 1987 to a low of 6 million barrels a day in 1996. But with the start of the new century, a stunning rebound began. And in the past few years, output has returned to a level close to its Soviet-era peak.”

The jump in production was largely because of privately owned Russian oil companies filling the Soviet void.

What direction is Russian oil headed now? In 1999, an article, titled “Mineral Natural Resources,” was published in the St. Petersburg Mining Institute Journal. The article stated, “Oil and gas resources were key to economic recovery and to the ‘entry of Russia into the world economy’ and for making Russia ‘a great economic power.’”

The author of this article, three years after being unemployed from losing his job as a deputy mayor and having just lost his home to a fire, Vladimir Putin, was on a political fast track ending as Russia's acting president, according to Daniel Yergin’s book “The Quest. Energy, Security, and the Remaking of the Modern World.”

With the election of Mr. Putin as president in 2000, the wind shifted back toward state control of strategic resources. Oil and natural gas were at the top of the list. The oil barons of Russia who saw great success in the rebound since the Soviet Union collapse had a couple options in the Putin led Russia: play by his rules or be ruined.

One of these massively successful, post-Soviet era Russian oil tycoons is a man named Mikhail Khodorkovsky, former CEO of Yukos Oil. Yukos was the largest privately held oil company in Russia and was acquiring its way to becoming the biggest in the world. In some circles, the Yukos leaders were known as kingmakers in the post-Soviet collapse. They had as much or more influence than any politician during that time. The fate of this oil giant changed on a February day in 2003.

Vladimir Putin summoned a handful of the Russian captains of industry to meeting, which was open to the public in early 2003. In 2012, a Vanity Fair article stated, “Khodorkovsky went to the meeting intent on standing up to Putin. He took a PowerPoint presentation highlighting facts that everyone present was certainly aware of but just as certainly tried to pretend they did not know. Slide six was titled “Corruption Costs the Russian Economy over $30 Billion a Year” and cited four different studies that had arrived at more or less the same figure.”

This confrontation with Putin proved to be the catalyst for Khodorkovsky losing roughly $14 billion of his fortune.

Yukos was accused of Russian tax fraud to the tune of $27 billion, months after the meeting with Putin. With 2003 came the arrest and imprisonment of Mikhail Khodorkovsky, formerly one of the 20 wealthiest people in the world, and the richest in Russia. By 2007, Yukos was dissolved and absorbed mostly by Russian state oil companies, according to a 2010 BBC article. Khodorkovsky did not take the path of least resistance with Putin. Today, he has a tiny fraction of his previous personal wealth (Likely around $100 million) and was just released from a 10-year tax evasion term at various Russian prison camps.

What happened to the pieces of Yukos oil? Rosneft, an oil and gas company majority owned by the Russian government, picked up most of the scraps at auctions. Rosneft is now the largest extractor of oil and gas in Russia.

Russian oil business is far from a basic plot of good versus bad. Both Vladimir Putin and former Security Chief of Yukos Alexei Pichugin have been implicated in murder cases. Pichugin is in prison, Putin is obviously not. There are no saints in Russian oil. The most powerful oil man in Russia is essentially the king of the country, and Putin knows this very well.

The Yukos case was not the first of its kind. Forbes reported, “BP’s CEO Robert Dudley, back when he was CEO of Russian JV TNK-BP, was poisoned, burgled, and threatened with arrest amid disputes with the Kremlin. In 2006, Putin forced the venture to sell its controlling stake in the Kovykta gas field to Gazprom (Russian stage controlled gas company). Dudley eventually fled the country in 2008.”

Forbes also reported, “In 2006 an irate Putin cut Royal Dutch Shell’s stake in the Sakhalin-2 project in half and handed control to Gazprom after costs doubled to $22 billion.”

Other foreign oil giants have tested the Russian waters, but they are ensured to not ever have the upper hand in the Putin era.

The potential for Russian production is still so enormous that oil suitors look for a new way in. In 2011, The New York Times reported that ExxonMobil and Rosneft signed an agreement for a few joint ventures. ExxonMobil would help explore oil reserves in the Arctic with Rosneft. The biggest company in the U.S. would shoulder all the exploration costs and would receive 33 percent of the oil produced.

“Where BP had planned to swap stock, Exxon, which is based in Texas, agreed to give Rosneft assets elsewhere in the world, including some that Exxon owns in the deep water zones of the Gulf of Mexico and on land in Texas,” The New York Times article stated.

With the recent Russian aggressions against Ukraine, ExxonMobile CEO Rex Tillerson’s decision to land swap with Putin and Rosneft seems less than ideal. Giving Rosneft the ability to practice already controversial methods of fracking in Texas and operate the same type of drilling rig that caused the 2010 Gulf of Mexico oil spill disaster isn’t something that seems in the best interest of U.S. citizens. However, this isn’t a new strategy for Exxon, as former CEO Lee Raymond wrote in his 2012 book, “I’m not a U.S. company, and I don’t make decisions based on what is good for the U.S.”

I don’t fault ExxonMobil for looking out for their shareholders. But, a little consideration for the country that has given them the opportunity to thrive across the globe would be appreciated.

According to the EIA, oil exports make up 50 percent of Russia's federal budget revenues. They are currently the third largest oil exporter in the world. Russia and Putin’s relevance are tied directly to their oil and gas exports. If invading Ukraine strikes you as an injustice, the best way to take the dirty wind out of Putin’s sails is to boycott Russian oil.

Max Rohr is a graduate of the University of Utah. He is currently an outside salesperson at Shamrock Sales in Denver. He has worked in the hydronics and solar industry for 10 years in the installation, sales and marketing sectors. Rohr is a LEED Green Associate and BPI Building Analyst, and is RPA’s Education Committee Chairman. He can be reached at max.rohr@mac.com.