BP yesterday brushed aside past problems in Russia by taking its stake in Sidanco from 10% to 25%. Five years ago it spent nearly $480m buying into Sidanco, only to lose much of it in bankruptcy proceedings against parts of the Russian company.
"Over the last few years Sidanco has refined its costs, strengthened its balance sheet and increased its focus in the upstream business," said BP chief executive Lord Browne.
Meanwhile, Shell chairman Phil Watts met Russian prime minister Mikhail Kasyanov. "They discussed current projects and Watts expressed interest in new projects in Russia," said Mr Kasyanov's spokeswoman.
Western companies have become increasingly bullish about corporate involvement partly because of corporate governance reform pushed by president Vladimir Putin.
Past problems were highlighted on Monday when investors began legal action against accountancy firm PricewaterhouseCoopers for alleged errors in auditing Gazprom. The move was triggered by minority shareholders alleging asset stripping at the Russian gas firm under its previous management.
These issues have failed to deter British fund managers who are pushing "emerging Europe" to retail investors as one of the hottest stories around.
Jupiter, one of the most popular British unit trust managers, is in the next few weeks expected to announce an eastern Europe fund which will be largely invested in Russia.
Foreign & Colonial is telling investors that prospects in Russia are among the best of any global market, while Baring Fund Managers is also enthusiastic.
Behind the surge in enthusiasm is a Moscow stock market that has outshone every other bourse in the world in recent years. In 2001 it was the world's best performing stock market, and so far this year it has advanced 24%.
Abu Leil-Cooper, manager of Baring Eastern Europe fund, has Yukos Oil and Lukoil as the two biggest stocks in her portfolio.
"We are seeing far more in the way of internationally acceptable accounting standards, with Lukoil and Yukos both giving us US GAAP-standard accounts. Quoted companies now understand that if they don't produce international standard accounts, they won't find support from foreign investors and will trade on a much lower multiple of earnings."
Oil companies make up 63% of the Moscow market capitalisation, and the recent spike in the oil prices has sent stocks soaring.
But Barings says that even without supercharged returns from the oil price the market is good value. It trades on 7.5 times earnings - compared with typical price-earnings ratios in London and New York of 25-30.
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