A noted American specialist on the oil and gas industry of Russia and the former USSR surveys the performance of one of the earliest oil‐producing joint ventures between a Western firm and a Russian partner on the first anniversary of the commencement of its oil production. After surveying the history of the Arctic tundra venture and the negotiations leading to its establishment, the paper focuses on the start‐up, since 1994, of oil production at the Ardala deposit and legal issues involving taxation, royalty payments, and access via pipeline to major export points.