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Russia is home to immense quantities of natural resources, and that includes a lot of oil and natural gas. From the troubled Caucasian region to the Arctic region in the north, Russia as a country probably has the largest amount of undiscovered oil and natural gas in the world. Under Soviet rule, oil discovery and drilling was exclusively carried out by nationalized oil companies, which were not really the most efficient entities in the world. Meanwhile, Exxon Mobil Corporation (NYSE:XOM) has cozied up to Kremlin and Rosneft, making most of us shake our heads in disbelief.

I literally dropped my jaw when I read that Exxon Mobil chiefs have been talking with Vladimir Putin, the dictator who recently managed to get three female punk rock musicians from Pussy Riot imprisoned. Imprisoning the artists was a symbolic way of telling Russians and the world that Putin is not the kind of person to mess with, and that even a small time punk band can't get away by criticizing him.

Putin has also been accused of rigging election ballots and usurping power for the third term. The dissent and resentment against him is palpable in Russia, but Putin has managed to silence his critics and leave foreign diplomats with no choice, but to agree to everything he says. In fact, even Hillary Clinton couldn't do much when she met him recently to encourage him to take action against Syria's Bashar Assad.

The point is, Putin gets his way across the world and Exxon Mobil seems to be getting its way across his offices. For Exxon Mobil, this relationship is not only crucial, but a clear path to billions of dollars worth oil and natural gas that lie hidden in the frozen soil and waters of the Russian plains.

Exxon Mobil's Rex Tillerson was the first foreign CEO to greet Putin. The duo met at the Asia-Pacific economic summit in Vladivostok where Rosneft CEO Igor Sechin discussed tapping tight oil reserves in Siberia. It is estimated that Exxon Mobil and Rosneft may end up investing more than $500 billion in order to develop Russian oil and natural gas reserves. Naturally, this will have a huge impact on Exxon Mobil and its revenues as there is virtually no limit to the amount of black gold it can unearth in Russia.

Keep in mind that Russia is still one of the most stable countries in the world in spite of dissent and resentment against Putin. I do not support or justify any of the policies that Putin and his cronies have forced upon the people of Russia, but I can certainly vouch for the regime's stability when compared with countries like Nigeria, Libya and Iraq, where oil companies are left to the mercy of Islamists and corrupt governments.

Exxon Mobil has suffered vandalism in Nigeria's delta region where militants and gangs have broken oil pipelines in order to steal crude oil. Exxon was slapped with huge fines and a cleanup order was commissioned by the Nigerian government after oil leaked into swamps and water bodies. Rival Royal Dutch Shell (NYSE:RDS.A) was not immune to those hefty fines or robberies either. Shell has had to not only clean up water bodies, but has also had to endure continued attacks against its employees by Islamic terrorists who operate from the northern part of Nigeria. Elsewhere, Shell's business in Southern Iraq depends upon wavering policies set by Baghdad.

It is interesting to note that Rosneft has partnered with British Petroleum (NYSE:BP) to explore for oil and natural gas in the remote Sakhalin Island. BP has a stake of 49% while Rosneft has a stake of 51%. The region holds untapped resources of oil and natural gas. Chevron (NYSE:CVX), on the other hand, has invested $2.2 billion in the Caspian Pipeline Consortium (CPC), which plans to draw oil and natural gas from the Caspian Sea to Western Europe. Chevron plans to spend another $5.4 billion in various other regions of Russia including the Arctic.

Marathon Oil (NYSE:MRO) gave up its Russian oil business way back in 2006. Many analysts have noted that it was a big mistake to walk out of critical contracts that the Russians had awarded to Marathon. Khantymansiyskneftegazgeologiya, Paytyh Oil, and Nazymgeodobycha were sold by Marathon due to operational problems.

Exxon Mobil expects to start drilling in the Kara Sea by 2014. Kara Sea in the Arctic region will probably be one of the most contested regions in Russia, if other foreign companies enter the nation. The region's infrastructure is still being built and Exxon will have a major role to play in such operations as well. Meanwhile, Exxon has cleverly manipulated the Russian bureaucracy to land up with some of the most coveted contracts that any oil company could have acquired.

Exxon is currently trading at $90, which is pretty good for an oil company. It is one of the most stable oil entities in the world and investors can actually sit back and watch the company make several investments in Russia, and elsewhere, while waiting for the returns. With a market cap of $413 billion and an enterprise value of $411 billion, Exxon Mobil is one of the best companies to invest in. The company has a profit margin of 10.37% and an operating margin of 11.44%. It has a total cash of $18 billion and total debt of $15.6 billion. Exxon Mobil's operating cash flow is $55 billion whereas its free cash flow is $16 billion.

In the short term, Exxon Mobil may experience fluctuations with respect to developments in Nigeria and Iraq. In the long run, Exxon will stand to gain a lot of revenue, thanks to its projects and investments in Russia. In fact, investing in Exxon is akin to bringing home a cash cow.

Source: Exxon Mobil Will Pop On New Drilling In Russia