Unwelcome in the Gulf of Mexico since last year's oil spill and now spurned by the political elite in Russia, BP (BP.L) is hamstrung in two key producing zones and needs new sources of growth and security of supply.
Rival ExxonMobil (XOM.N) has thwarted the British company's hopes of exploring in the Russian Arctic anytime soon, striking a deal on Tuesday with state-owned Rosneft to exploit the very same assets BP had hoped to get its hands on.
The Exxon/Rosneft venture has the blessing of Russian Prime Minister Vladimir Putin and means that for the moment at least the only way BP can exploit Russia's vast reserves is in partnership with a group of unhappy oligarch partners.
"This means BP will not operate independently in Russia and will now do everything through TNK-BP," said a former BP executive who did not want to be named.
BP has been locked in legal battles with its TNK-BP joint venture partners this year after they fell out over Rosneft's original plan to tie up with BP for the Arctic venture.
BP's 50 percent share in TNK-BP provides it with 700,000 barrels a day, about a fifth of its 3.4 million bpd total. The other 50 percent is held by billionaires Mikhail Fridman, German Khan, Viktor Vekselberg and Len Blavatnik through a consortium named Alfa-Access-Renova (AAR).
Analysts said a raid by bailiffs on BP's offices in Moscow on Wednesday shows how vulnerable the British company now is, and exposes the mistakes made in Russia by Chief Executive Bob Dudley and his predecessors.
"They had passed all the government-relation and lobbying activity to Russian shareholders. It turned out that the Russian shareholders play their own game and BP became vulnerable," said Evgeny Minchenko, director of the International Institute for Political Expertise in Moscow.
"I don't think that it was the Kremlin or the government which sent (the) order to bailiffs. It's just that the people who carry out the decision understand that the authorities won't stand up for BP."
WHERE IS PLAN B?
Investors sense a period ahead in which BP struggles to get initiatives off the ground both in Russia and in the United States, where it is mistrusted since last year's spill in Gulf of Mexico -- source of another 400,000 barrels of its daily output.
"I don't think anything major is on the table for BP right now, and even if it was, it would struggle to get approval from the U.S. government which is primarily concerned that BP is good for what it owes on Macondo," said Ivor Pether, senior fund manager at Royal London Asset Management.
"A lot of their plans have been thwarted. One would expect them to say a little bit more about what the Plan B is, and I would assume that there would be more focus on the existing portfolio."
Even before this week's blow in Russia, some investors were talking about the possibility BP may not survive as a single entity.
"This is a company that was lacking sufficient breadth and depth of management to manage an enterprise as global and complex as theirs and quite frankly it's worn itself out in some of these accidents," said Ted Harper at Frost Investment Advisors, which manages about $6.8 billion mainly in the United States.
Speaking before this week's news of the Exxon/Rosneft deal he added: "BP is more or less the poster child for a company that would be far better served breaking itself up into slightly smaller parts."
But it is all too easy to overplay BP's travails. Oil exploration is a risky business beset by political difficulties at every turn, and some shareholders are quite happy to see curtailed the company's actions in Russia in particular.
"The one positive that I would take from this is that when BP was trying desperately to complete this deal with Rosneft, it was prepared to go down a number of avenues that shareholders would have been uncomfortable with, which included buying out the rest of TNK-BP from its partners," said Pether.
"It appeared that there was an offer, which was turned down, and there were concerns a second was imminent and they could overpay. I am personally quite relieved that it is not tempted to go down that route anymore."
BP dismissed its dalliance with Rosneft as water under the bridge.
"What happened yesterday does not change anything for BP," said a spokesman. "We've made it quite clear that our interest in that project (ie the Rosneft tie-up) was over. We remain committed to Russia and to TNK-BP."
And although BP's prospects elsewhere in the world may not yet have the scale of the Russian Arctic and the Gulf of Mexico, its recent record shows it has not been idle on the diversification front, according to Irene Himona, analyst at Societe Generale.
"To be fair to BP they've already done two very important deals. They bought Devon (DVN.N) assets in Brazil which is one of the few real global hotspots in terms of exploration and there was the $7 billion Reliance Exploration (RELI.BO) deal in India."
BP's shares, battered by its Gulf spill legacy and by its problems in Russia, trade at a discount to those of its big rivals Exxon and Royal Dutch/Shell (RDSa.L), but did not react to the Exxon/Rosneft deal.
"For BP's investors this particular deal with Rosneft was killed a little while back due to the reaction of TNK-BP," said Himona, who believes it is much too early to write off BP's prospects in Russia and its Arctic region.
"The important things to remember are that they are already in Russia, that they already produce a lot more oil in Russia than the other majors and that the Arctic is a very, very, very big place."