BP - TNK
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This document summarizes a case involving the joint venture between BP and Russian company TNK-BP. It describes the founding of TNK-BP in 2003 as a 50/50 partnership between BP and AAR. However, disagreements later emerged between BP and the Russian partners over control, strategy, and new field development. These disputes escalated, negatively impacting the partnership, and ultimately led to BP pursuing deals with Rosneft separately without TNK-BP.
BP - TNK
- 1. Professor: Michael Lupsor Done by: Daria Chizhova Presented: 11.11.11
- 2. Small description of the company 1st version of what happened 2nd version of what happened Final outcome Ethical Issues Bibliography
- 3. Major vertically integrated Russian oil company Russia's third largest oil producer and among the ten largest private oil companies in the world It is 50% owned by BP and 50% by the AAR (Alfa- Access-Renova) consortium - officially Was founded as a merger in 2003
- 4. 2003: BP – 50%, TNK – 50% TNK – legal and BP – rule and security control issues, political production side cover
- 5. Russian Government decided to increase Governmental involvement into oil and gaz industry => Only companies having not more than 50% of foreign capital could develop new strategic fields
- 6. One of the Russian actioners – Leonid Blavatnic was technically owning an American company More than 50% of the capital was foreign Legally, TNK-BP were not able to develop new fields
- 7. BP was insisting on Russians own 50% so that they could develop the field BUT, Russians disagreed and didn’t like the pressure and had managerial conflicts Pushed Robert Dudley to step down
- 8. BP started to develop Arctic fields with Rosneft TNK not happy BP is not happy TNK also violated BP’s by that actions agreement by BP started without TNK should pursue creating conflict of Renova’s operations TNK knowing deals in Russia with Russian and interest Ukraine companies
- 9. Russian wanted to fire Robert Dudley, BUT Brits didn’t allow them to, because they were afraid that Russians will take over the company in Russia (and Brits couldn’t let it go) Russians started to complain about the growth, prices, etc. thus provoked an open conflict
- 10. This opened conflict was contributed by the Russia-UK conflict that time Problems with visas for top management, for leading engineers, accuse of spying for British Council, deportation, etc. Rumor that Robert Dudley accused of violation of Russian Law and will not be given visa
- 11. Dudley stepped down Although AAR increased its influence Memorandum of Understanding Independent CEO 4 BP representatives Mikhail Barskiy BOD changed 4 TNK representatives structure 3 Independent directors
- 12. Mistrust and violation of laws led to misunderstandings and threats of both parts that another will take over the company -> Moral Hazard Fiduciary principle violated (from Russian point of view) – as BP was mother company and had to work in the interest of BP One person – Robert Dudley suffering for the whole corporate dispute of the company
- 13. http://www.rg.ru/2008/09/05/tnk.html http://www.rg.ru/2009/06/02/kalif.html http://www.ecotoc.ru/scandal/d559/ http://en.wikipedia.org/wiki/TNK-BP http://www.aar.ru/en/press/articles/item/454- bp-dispute-with-tnk-bp-rumbles-on.html http://rt.com/business/news/tnk-bp-aar- dispute/