The Gazprom logo in front of a government building in Moscow
The Gazprom logo in front of a government building in Moscow - 
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KAI RYSSDAL: All the hoopla on Wall Street came despite rising energy prices. Which helps this next story make some sense. The Russian energy giant Gazprom has announced a deal with the French company Total to help develop the largest natural gasfield in the world. Shtokman, in the Russian Arctic.

From the Marketplace European Desk in London, Stephen Beard reports.

STEPHEN BEARD: Total will sign a deal tomorrow committing itself to study the Shtokman project. On the face of it, it looks alluring. A 25 percent stake in developing a field with enough natural gas to power the whole planet for at least a year. But, says Nick Redman of the Economist Intelligence Unit, this won't be an easy project:

Nick REDMAN: Deep into the Arctic, 25-meter-high waves. It's 500 kilometers away from the shore. This is a really, hugely challenging gas field for anyone to take on. And that's why Gazprom definitely needed foreign help.

In spite of the challenge, five major foreign companies — including Conoco Phillips and Chevron of the U.S. — have been scrabbling for a piece of the action. In the current political climate the Americans stood little chance, says energy economist Phillip Verlegger.

Phillip VERLEGGER: Well, I think the Russians right now are quite unhappy with the United States over the discussion of this missile defence system. They certainly aren't going to bend over backwards to help the United States.

But why did the Russians opt for Total? Nick Redman believes the French are prepared to strike other deals with Gazprom allowing the Russian company a bigger foothold in Europe, a chance for Gazprom to further its global ambitions.

REDMAN: It's also about developing its asset base abroad. Only then can Gazprom fulfill its destiny of being bigger than Exxon Mobil.

Total, meanwhile, won't get any rights to the huge reserves in the Shtockman field, only to what it pumps out for a limited period. The Russians are keeping tight control over their resources.

In London, this is Stephen Beard for Marketplace.