Reasons to be happy

Now is a bad time to be hunting upstream oil deals, with oil prices at record levels. Despite this, and the corporate turmoil surrounding the Yukos saga, US oil firms are looking for assets in Russia, one of the world's last great oil frontiers. And now they have the blessing of President Vladimir Putin, writes Isabel Gorst

THE YUKOS scandal has blackened Russia's image as a sensible place to invest, digging up recently buried doubts about the fairness of the country's legal system, or its respect for property rights. But however ugly the turmoil round Russia's biggest oil company, foreign majors have not stopped scrambling for opportunities in one of the world's last great oil frontiers. Even without the Yukos scandal, it would be a bad time to acquire upstream assets. World oil prices have hit record levels, so the cost of buying into projects is high. Russia's oil taxes have already risen and are set to climb further in the coming months. In August, the method for calculating crude export duties was changed,