This is the first week of a new format for this blog. As many of you know, I have been working on the next book. It is time to start putting pen to paper toward a year-end deadline. So for the remainder of the year, the Oil and the Glory will run twice a week -- a long magazine-style piece once a week, and the Weekly Wrap on Fridays. Please feel free to continue to correspond either by email in the box next to my photograph below, in the comment box underneath the posts, by Twitter or Facebook.

Divorce, Russian style for BP: Four days after its Russian oligarch partners called for a split-up, BP says it received an unsolicited bid for its 50 percent share in TNK-BP, the Russian oil company. The bidder seems to be a Russian state company. The cash price could be big -- at upwards of $20 billion and more. But the deal will not be that straightforward -- that is not how Russia works. Rosneft, for example, will not simply hand over $20 billion in cash. Nor would President Vladimir Putin wish to be seen to be showing BP the door. Look for a deal with cash-and-stay components, perhaps involving talks about the Arctic.

This outcome is a long time coming. BP's relationship with the oligarchs has been star-crossed from almost its beginnings in 1997. The very next year, BP lost the main value of this first joint venture -- a company called Sidanco -- after paying $571 million for a 10 percent stake. In the subsequent six years, BP handed over some $7.5 billion more in cash to the oligarchs, and ultimately ended up with the 50 percent stake in TNK-BP as we know it today. Throughout, banking oligarch Mikhail Fridman and his partners -- known collectively as AAR -- have regularly taken BP for a shellacking. In 2008, things got so dicey that current BP CEO Bob Dudley -- then in charge of TNK-BP -- went into hiding incommunicado for several months.

BP has been paid handsomely for its misery. Last year, TNK-BP accounted for 29 percent of BP's global oil production, and 27 percent of its proven reserves. In 2011, BP received $3.75 billion in dividends from TNK-BP, or 17 percent of its $22.2 billion in cash flow. Accumulatively, BP's dividends since 2003 have been about $19 billion, according to BP. This makes its share of TNK-BP theoretically of great value. Bernstein Research puts the value of BP's stake at $18.5 billion to $20 billion, but others think the price could be more. Richard Griffith and Nick Copeman, analysts at Oriel Securities, estimates the value at $24 billion.

Even though no one likes to suffer like that, this does not mean that BP goes easily. Nor incidentally is BP necessarily interested in mere cash, notwithstanding its large remaining financial exposure after the 2010 Gulf of Mexico oil spill. BP is interested in really big future oil production. Like in the Arctic, the sort of exploration acreage recently acquired in separate deals by ExxonMobil, Eni and Statoil. One suspects that negotiation toward a BP Arctic deal will be an explicit or implicit component of a TNK-BP sale.

In an email exchange, BP spokesman Toby Odone told me that the Arctic will play no role in any sale. He said:

This is the first stage in what could be a very lengthy process to sell our share in TNK-BP. It is far too early to say what we will do with the money. All we have done today is announce an intention to look further at expressions of interest in purchasing some or all of our stake in TNK-BP. It is not about Arctic or other businesses in Russia, current or future.

As many of you know, I have been working on the next book. It is time to start putting pen to paper toward a year-end deadline. Beginning next week, the Oil and the Glory will switch to a new format. I will write a long magazine-style piece once a week, and post the Weekly Wrap on Fridays. Please feel free to continue to correspond either by email in the box next to my photograph below, in the comment box underneath the posts, by Twitter or Facebook.

One of the most consequential energy decisions on the Obama Administration's plate isn't one typically discussed in the election-year hot house -- whether to expand drilling, allow the expansion of a pipeline for Canadian oil sands, or to throw clean-tech entrepreneurs to the sharks.

It is whether to more fully open the floodgates of the U.S. natural gas boom on the world by permitting greater exports of shale gas. The appearance of large volumes of U.S. shale gas on the global market could rattle geostrategy and markets from Russia, to Europe, China and the Middle East.

Shale gas drillers -- saddled with a glut of gas, and fire-sale prices -- are pushing hard for permission to build liquefied natural as terminals and export some of their supply, perhaps 60 billion cubic meters a year, especially to Asia.

In addition, thirsty nations are on America's doorstep. Japan is most insistently lobbying the White House to open up U.S. gas exports, reports the Wall Street Journal's Tennille Tracy. The reason is the need to compensate for its loss of nuclear-power production since last year's Fukushima nuclear reactor meltdown. Others wanting U.S. gas include India and South Korea.

But a Japanese Trade Ministry official told Tracy that he expects no decision until after the November election. The reason is politics -- a number of economists are calling cheap gas a savior for a U.S. manufacturing revival, perhaps even the harbinger of a new industrial revolution. So if you start exporting the gas, and spark higher domestic prices, you may jeopardize this potential opportunity to revitalize American industry. President Obama would be accused by his critics of another job-squandering demonstration of economic incompetence.

Yet the chances are that the U.S. will end up with higher prices whatever the case. This is because drillers will not forever produce at high rates for $2.50 per 1,000 cubic feet; they will slow or shut down production from some fields, and the resulting drop in supply will send the price higher.

This is at it should be. To the degree that the frackers get their act together environmentally as suggested by the International Energy Agency, the global availability of shale gas could assist the resolution of numerous global conundra -- the problem of carbon buildup in the atmosphere; of Europe's over-reliance on Russian gas; of increasing Chinese restiveness with coal pollution; not to mention of Western manufacturing competitiveness. If there is a large, long-term shift to hybrid electric cars, oil demand could drop, and shake up the economic calculus in the Middle East.

Charles Ebinger of the Brookings Institution told me that U.S. exports will send up domestic gas prices at the margin -- "The anticipation of more export projects would lead to people lining up reserves to support them," he said.

But ultimately, the big impact will come with an industrial embrace of more natural gas, and a greater shift by U.S. utilities to the conversion of large coal-fired power plants to natural gas. Michael Levi of the Council on Foreign Relations agrees. The volume suggested for export is "less than 10 percent of current U.S. production," Levi told me.

Could the fate of a pipeline prove decisive in the U.S. presidential election? So far, the proposed Keystone XL pipeline connecting Canada and Texas is central to a Republican strategy of tarring President Obama as an economically clueless tree-hugger oblivious to the jobless multitude.

Yet should energy pipelines assume gigantic, life-like proportions in the public imagination? Whether or not they should, they have been doing so for a couple of decades now. In the 1990s, the Baku-Ceyhan oil pipeline linking the Caspian and Mediterranean seas was treated by its advocates and opponents as a life-and-death struggle. So it has been in recent years over competing proposed natural gas pipelines connecting Europe to Russia and Central Asia -- Nord Stream, South Stream and Nabucco.

Now we have Keystone XL, a proposal by TransCanada for a 1,700-mile-long pipeline that would carry some 700,000 barrels a day of bitumen to Gulf of Mexico refineries.

Yet, while American pols go on and on theatrically about Keystone, it is instructive how calmly the Canadians handle the issue.

In interviews with Canadian officials and analysts who study the matter for a piece on EnergyWire, I was told that Canadians are dismayed that Obama has postponed approval of the line until next year. They don't like it. But they also are convinced that the line will be approved regardless who wins in November. "They're perturbed by getting caught in this political minefield in the U.S.," said David Pumphrey of the Center for Strategic and International Studies. "They feel they are a victim of all sorts of things. They are perturbed by being treated this way."

The main lesson for the Canadians is that, when it comes to hydrocarbons, diversity of supply, demand and shipping routes are king. That is why they will probably proceed with a secondary pipeline route to the Canadian West Coast, from which the bitumen can go on to Asia, especially China. Here is David Collyer, president of the Canadian Association of Petroleum Producers:

I wouldn't say Canadians were complacent about the U.S. market. But what has given them a bit of a wakeup call was that the evidence seemed so compelling why the U.S. should buy more oil from Canada, but yet the decision was delayed. We are not naïve about the politics in the U.S., but when we see such a compelling case, and yet it is not approved, it has given people a start. We need to look at alternatives.

Gary Doer, Canada's ambassador to the United States, told me that his country has sought the West Coast export lines out of necessity. "We do not stand still," he said.

If Mitt Romney wins in November, he can thank Alberta for its eagerness to share its oil sands with the world.

When it comes to gasoline, are Americans transforming from the world's chief gluttons to models of moderation? According to Philip Verleger, the energy economist, that is more or less the country's direction, with surprising consequences.

Verleger spells out this scenario in a note to clients, his version of the narrative of coming fossil-fuel abundance that we have heard elsewhere. Verleger's 11-page note is as oil-bullish as his most enthusiastic colleagues, who as a group say the U.S. is on the cusp of near energy independence. The oil-abundance narrative is a global one, and asserts flatly that peak oil theory is wrong.

Where Verleger diverges is in ascribing most of the responsibility for this U.S. oil boom not to more prolific oilfields, but to consumer efficiency. "[Gasoline] use will drop significantly by 2020 thanks to conservation, natural gas substitution and the ethanol mandate," Verleger told me in an email.

By 2022, 36 billion gallons of renewable fuels must be blended into gasoline, in line with a George W. Bush-era law. On top of that, President Obama has raised the bar for vehicular fuel efficiency to 54 miles per gallon, up from the current 30 miles a gallon. Plus long-haul truckers are making a shift to natural gas fuel, Reuters reports.

A rocky nine-year oil partnership between BP and four Russian oligarchs seems to have reached a tenuous new stage, with a source on the Russian side saying the highly lucrative-but-troubled venture has "run its course." The crisis comes in one of the era's stormiest corporate partnerships of any type, anywhere, one in which at one stage current BP CEO Bob Dudley was forced into hiding.

The stirrings from the Russian side of TNK-BP, including the resignation today of the partnership's Russian CEO, Mikhail Fridman (pictured above, left, with Russian President Vladimir Putin), suggest that it is attempting to fundamentally shake up the venture. What is not clear is whether this is simply a new phase of brinksmanship, or if, as another source close to the Russian partners said, "I think we are moving to the beginning of the end game in terms of the partnership." The partners themselves may know only that they are exasperated, and not whether this particular nadir is an inflection point. BP spokesman Toby Odone told me that the British company is "happy" with the partnership, and is not seeking to get out of it.

BP's often-dysfunctional relationship with its Russian partners has seemed rooted in cultural miscommunication: The buttoned-up Britons and the scrappy oligarchs have appeared simply not to speak the same language of business. And when those garbled translations have evolved into crisis, the oligarchs have usually won, given their close ties to the Kremlin and greater mastery of their home turf.

The lowest of the low points was in July 2008, when matters became so fraught that Dudley -- then running TNK-BP -- went underground against threats to his safety. The current bout of friction goes back to January 2011, when the Russian side accused BP of betrayal by going behind its back in order to obtain a huge Arctic gas deal with the Russian state. BP was attempting a big oil coup as part of its effort to recover from its disastrous 2010 oil spill in the Gulf of Mexico. But in doing so, it violated a key covenant with the Russians, who collectively are known as AAR. At this time last year, the sides were as far as they had ever gone toward divorce court, with BP making a $32 billion buyout offer to the oligarchs. But the divorce fell apart over yet another disagreement, and the tension went on.

Fridman's resignation, announced by TNK-BP, is a conspicuous signal that the discord subsided but hardly vanished. Fridman, one of Russia's most successful and skilled oligarchs, is chairman of Alfa Group, a holding company. A superlatively plucky competitor, Fridman has succeeded repeatedly in tying up BP in knots during their scrapes, whether in Russia or Europe. In last year's row, for example, Fridman appeared to be behind AAR's winning strategy of getting at least three European tribunals to declare BP's Arctic venture illegal.

Meanwhile, it cannot have sat well with anyone when ExxonMobil last August stepped into the breach, and itself snapped up the enormous Arctic assets at center in the brawl. And since then when Italy's Eni last month struck its own Arctic deal with Russia. And earlier this month, when Norway's Statoil got an Arctic deal, too.

The biggest sticking point in any divorce agreement -- if that is what is being sought -- may not be money. Oil prices were roughly the same last year as now, so the venture's cash-value may not be substantially different. Instead, it may be who gets the house and custody of the kids.

How to incentivize bad behavior for the greater good: Last year, Mark Dubowitz, a Washington-based advocate of regime change in Iran, was mulling a conundrum with a colleague -- how to clamp painful oil sanctions on Tehran while harming no one else. They knew that members of both political parties opposed cutting off Iranian access to the global export market if it meant an oil-price surge. And that, since everyone thought a price spike was inevitable, nothing was consequently done as oil revenue continued to flow freely into Tehran. So Dubowitz and Reuel Marc Gerecht, his colleague at the Foundation for Defense of Democracies, looked for an improbable, sanitized cordoning of fiscal pain. That's when they hit an apparent brainstorm -- a simple form of game theory that they thought would work.

The game went like this: You divide players into the "white hats" and the "black hats." Global players likely to honor sanctions (the white hats) would be incentivized to do just that -- completely stop buying Iranian oil. But nothing would be done to discourage global players likely to ignore the sanctions from following those very dastardly instincts (the black hats, primarily China, but also India and perhaps another country or two). If everything worked right, Iran -- selling only to this latter, much narrower band of tough-bargaining buyers -- would wield much-diminished pricing leverage. It would consequently be forced to yield substantial discounts, putting great pressure on the regime's ability to finance itself.

In November, Dubowitz and Gerecht distributed the idea as a confidential, 32-page white paper to the White House and Congress, in addition to European capitals, titled "Oil Market Impact of Sanctions Against the Central Bank of Iran." Synthesizing the idea in an op-ed in the New York Times, the pair argued that to move Iran, one needed "to learn how to leverage greed." As Dubowitz told me over palak paneer and dal yesterday, "You give market power to the black hats and allow them to push down the price to earn money."

As we know, the current sanctions regime closely resembles the devilishly clever white paper -- you get obstinate forces and inveterate violators of norms to do what you want by appealing precisely to their baser instincts. Which made me wonder -- what other big problems might be solved using the same logic?

I drew up with a short list of names, along with possible vulnerabilities for use as leverage. How about you -- what problematic situation could you see shaken up?

Go to the Jump for the suggested list, and the rest of the Wrap