Premium Essay

Tnk-Bp Case Study

In: Business and Management

Submitted By saty88
Words 2106
Pages 9
BP in Russia

Executive Summary
This case study “BP in Russia: Settling the Joint Venture Dispute” goes into the major world energy companies and the formation of joint ventures. This case delves into the 50/50 international joint venture (IJV) formed between British Petroleum (BP) and a group of Russian investors, Alfa Group, Access Industries, and Renova known as AAR. This IJV was formed in September 2003 and was known as TNK-BP.1

TNK-BP’s CEO was Robert Dudley in May 2008. This is when the dispute between the British and Russian shareholders started to escalate. AAR thought that BP was treating TNK-BP as a subsidiary and not a JV. The escalation of the conflict got to the point where BP was seriously considering whether they should walk away from the IJV by selling its stake, acquire AAR’s stake or continue the IJV.

This case analysis will explore BP and whether it was a good strategy to enter Russia and pursue an international joint venture with consortium AAR. Next the analysis will look at the evolution of the joint venture and examine the unique challenges faced by the international joint venture. Next the study will detail our recommendations regarding the AAR partnership, their implications and steps to implement this. Lastly the case will be updated to the present time.

1. Did BP pursue the right strategy to enter Russia?
There are arguments both for and against BP’s decision to enter Russia. Perhaps the biggest disadvantage to BP’s strategy was the cultural differences they would experience in Russia. In addition to obvious cultural differences between Western and Russian national cultures and between global and regional operations and experience, TNK-BP faced cultural differences between a public company and Russia’s owner-founder heritage, the business environment and organizational maturity, and the distinctive corporate cultures...

Similar Documents

Free Essay

Tnk-Bp

...when one of the world’s largest energy companies, BP, and the Russian state company, Rosneft, unsuccessfully attempted to form a strategic partnership on Arctic development. This failure was caused by the contractual and legal objections of the AAR consortium - BP’s partners in the Russian oil company TNK-BP. In 2003-5, BP and the AAR consortium led by three billionaires with Russian connections - Mikhail Fridman, Len Blavatnik, and Viktor Vekselberg - merged their Russian oil corporate assets - TNK, Sidanko, and Onako and their subsidiaries - under the umbrella of TNK-BP.2 This joint venture was established on a 50/50 basis, the operation of which required mutual joint decision making. The partners also signed a shareholding agreement on TNK- BP’s right of first refusal in relation to potential future oil and gas projects offered to BP or AAR in Russia and Ukraine. This agreement was subsequently used by AAR to stop the BP-Rosneft deal in international courts. Unfortunately, this was not the first time that BP had been unable to change the way it conducted its business in Russia. The first example occurred in 2007-8 when BP was reported to be keen on having Gazprom as a partner instead of AAR. This move would have transformed the TNK-BP joint venture into Gazprom-BP. This did not transpire. Second, in the spring-summer 2008, there was a turbulent ‘misunderstanding’ between BP and AAR, over the corporate governance and......

Words: 9031 - Pages: 37

Premium Essay

Tnk-Bp Case Analysis 2011

...Strategic Management : Principles and Practice Case study « TNK-BP » 1) Explain based on i) the type of partners (competitors or not), ii) the contribution of resources (which resources?) and iii) the nature of the alliance (what is both partners’ purpose?) whether TNK-BP is a scale or scope alliance. The TNK-BP joint venture is an alliance between two competitors(i): the oil British giant BP and the consortium of four Russian billionaires behind AAR. On the hand, BP is the second largest private sector oil company in the world. On the other hand, AAR is a very diversified group; it has interests in banking, retail, telecommunications, and medias but also in oil, notably through TNK which owns oil reserves and facilities. Those two companies contribute differently (ii) to the joint-venture. BP brings its know-how and expertise to exploit oil reserves, as well as the required investment (6,8$ billions of equity). AAR provides oil production in Siberia, oil refining, gaz interest and 1400 filling stations in Russian and Ukraine. One could argue that BP needs natural resources and is ready to pay a premium for it, whereas AAR needs the technology and expertise of BP. This alliance (iii) is a joint venture between BP and AAR because TNK-BP is a new entity that is owned equally by BP and AAR without any mergers or acquisitions from BP to AAR or vice versa. This alliance is a scope alliance since it is driven by complementarities in competence and assets, and......

Words: 866 - Pages: 4

Premium Essay

Sales Motivation

...Consider Before Buying An ETRM System......................Pages 1-5 1. Hardware Vs. So ware-as-a-Service (SaaS) 2. Speed Of Implementa on 3. Integra on 4. Customiza on 5. Affordability 6. Access 7. Security 8. Protec on Against Loss 9. Project Management 10. Scalability Part 2: A Problem-Solving Approach By Leading Companies ...................................Pages 6-11 Read About Four Very Different Companies & Their Success In Approaching & Implemen ng An Energy Trading & Risk System. Case Study 1: Singapore, Trading Company With Bunkering Opera ons (Company Confiden al) ....................................Page 7 Case Study 2: Germany, Trading Company With Bunkering Opera ons (Company Confiden al)...................................Page 7-8 Case Study 3: Africa, Regional Trading Company: Linetrale ............................................................................................Page 8-9 Case Study 4: Russia, Large Integrated Oil & Gas Company: TNK-BP.........................................................................Pages 10-11 The Costs Of Failing To Manage & Control Risks Are High. The Right ETRM System Is Essential. Don’t buy ANY Trading and Risk Management Until You’ve Read This 10-Point Guide In these tough mes there’s no doubt that managing risk within your organiza on should be a top priority. The costs of failing to manage and control risks are high, but the right Trading and Risk Management system configured in the......

Words: 5620 - Pages: 23

Premium Essay

Annual Report

...Annual Report and Form 20-F 2013 bp.com/annualreport Building a stronger, safer BP Who we are BP is one of the world’s leading integrated oil and gas companies.a We aim to create long-term value for shareholders by helping to meet growing demand for energy in a safe and responsible way. We strive to be a world-class operator, a responsible corporate citizen and a good employer. Through our work we provide customers with fuel for transportation, energy for heat and light, lubricants to keep engines moving and the petrochemicals products used to make everyday items as diverse as paints, clothes and packaging. Our projects and operations help to generate employment, investment and tax revenues in countries and communities around the world. We employ more than 80,000 people, mostly in Europe and the US. As a global group, our interests and activities are held or operated through subsidiaries, branches, joint arrangements or associates established in – and subject to the laws and regulations of – many different jurisdictions. The UK is a centre for trading, legal, finance, research and technology and other business functions. We have well-established operations in Europe, the US, Canada, Russia, South America, Australasia, Asia and parts of Africa. a On the basis of market capitalization, proved reserves and production. Annual Report and Form 20-F 2013 bp.com/annualreport Front cover imagery Our second BP-operated development in Angola consists of four oil fields – Plutão,......

Words: 227661 - Pages: 911

Premium Essay

Well Done Bp

...Major shareholders and related party transactions Dividends Legal proceedings Relationships with suppliers and contractors Share prices and listings Material contracts Exchange controls Taxation Documents on display Purchases of equity securities by the issuer and affiliated purchasers Fees and charges payable by a holder of ADSs Fees and payments made by the Depositary to the issuer Called-up share capital Administration Annual general meeting Exhibits BP Annual Report and Form 20-F 2010 83 Directors and senior management 84 87 Directors and senior management Directors’ interests 89 Corporate governance 90 105 106 106 107 108 Board performance report Corporate governance practices Code of ethics Controls and procedures Principal accountants’ fees and services Memorandum and Articles of Association 141 Financial statements 142 Consolidated financial statements of the BP group 150 Notes on financial statements 228 Supplementary information on oil and natural gas (unaudited) PC1 Parent company financial statements of BP p.l.c. 111 Directors’ remuneration report 112 Part 1 Summary 114 Part 2 Executive directors’ remuneration 120 Part 3 Non-executive directors’ remuneration UNITED...

Words: 215326 - Pages: 862

Premium Essay

Joint Venture in Russia

...in about 100 countries and generated $31.8 billion in revenue in 2009. It possesses a strong presence in emerging markets,particularly in Asia. ABB was formed as a result of a 1988 merger between two former competitors, the Swedish ASEA AB and the Swiss BBC Brown Boveri Ltd. The Swedish company added its management strength and the Swiss company added its technological and marketing expertise.The new CEO declared that ABB would be “global and local, big and small, radically decentralized but with central control.” To achieve these seemingly competing objectives, ABB’s CEO chose to implement matrix management. Matrix Management Matrix management is an organizational structure that combines two levels of oversight and control. In ABB’s case in 1993, the company was divided into four corporate divisions (Global dimensions) at the same time as it was divided into three geographic regions (Regional dimensions).The Global dimensions were further partitioned into business areas and the Regional dimensions were partitioned into country holdings. See the nearby figure from Germany’s INFO Institut.Thus, employees reported to two superiors, one from their Global Dimension and one from the Regional dimension. Global dimensions were responsible for strategy, distribution, and R&D, whereas Regional dimensions were responsible for sales and local customer satisfaction.To accomplish the objective to be both “global and local,” ABB’s matrix management pursued global integration......

Words: 1305 - Pages: 6

Premium Essay

Sustainability

...Sustainability Review 2011 bp.com/sustainability Building a stronger, safer BP What’s inside 2011 was a year of recovery, consolidation and change for BP. Our employees worked hard to make BP a stronger, safer company. We recognize there is more to do, but we believe important progress was achieved during the year, and we are clear on our priorities and responsibilities as we move forward. In this Sustainability Review, we look at how we are working to enhance safety and risk management, earn back trust and grow value, following the Gulf of Mexico accident. Stakeholder voices External and internal stakeholders have been essential in shaping this report. Many of their insights and opinions are highlighted here and online. We also include observations and a summary statement from our external assurance provider, Ernst & Young. During our work we interviewed staff responsible for engaging with external stakeholders and reviewed evidence of how information from these dialogues is captured. We have also attended a selection of briefings to investors and two of the roundtable discussions held in 2011 to understand the perspectives of various thought leaders on how BP should evolve its reporting and communications. We noted that stakeholders welcome this dialogue but there remains a desire for more comprehensive reporting on how BP is changing. Ernst & Young Observation Find out more online This Sustainability Review is......

Words: 32523 - Pages: 131

Premium Essay

Strategic Info Coca Cola

...PART IV: Case Studies 1. Coca-Cola vs. Pepsi in India: The Battle of the Bottle Continues, 395 2. Arun Ice Cream, 409 3. Gujarat Co-Operative Milk Marketing Federation Limited (GCMMF), 421 4. The Park, Calcutta, 439 5. Kanpur Confectioneries Private Limited (A), 461 6. Kanpur Confectioneries Private Limited (B), 467 7. Aravind Eye Care System: Giving the Most Precious Gift, 473 8. ITC Limited, Bangalore (A), 495 9. ITC Limited, Bangalore (B), 499 10.  The Living Room: Redefining the Furniture Industry,  505 11. Cognizant: Preparing for a Global Footprint, 515 12. One Mission, Multiple Roads: Aravind Eye Care System in 2009, 535 13. Wal-Mart Stores, Inc. (WMT), 555 14. Alibaba.com, 583 15. Apple Computer, Inc.: Maintaining the Music Business While Introducing iPhone and Apple TV, 597 16. Blockbuster Acquires Movielink: A Growth Strategy?, 615 17. A Horror Show at the Cinemaplex?, 627 18. JetBlue Airways: Challenges Ahead, 635 19. Blue Ocean Strategy at Henkel, 655 20. Nucor in 2009, 663 21. TNK-BP (Russia) 2008, 687 22. Barclays: Matt Barrett’s Journey—Winning Hearts and Minds, 701 23. Nintendo’s Disruptive Strategy: Implications for the Video Game Industry, 707 Coca-Cola vs. Pepsi in India: The Battle of the Bottle Continues Case 1 S. Manikutty Soft drinks or cool drinks, as they are known in India, refer to non-alcoholic drinks served in bottles or other packaging, to be distinguished from hot beverages such as coffee and tea, or cold beverages such as......

Words: 4564 - Pages: 19

Premium Essay

Abc Abc

...Breakout Strategy Meeting the Challenge of Double-Digit Growth Sydney Finkelstein Charles E. Harvey Thomas C. Lawton (McGraw-Hill, New York, 2006) Table of Contents Dedication Acknowledgements Table of Contents List of figures Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Breakout Strategy Getting on the Fast Track Staying out Front Breakout Dynamics Putting Vision to Work Being a Magnet Company Delivering the Promise Executing Breakout Breakout Leadership Appendix: case study companies Index List of Figures Figure 1.1 Figure 2.1 Figure 3.1 Figure 4.1 Figure 5.1 Figure 5.2 Figure 5.3 Figure 5.4 Figure 5.5 Figure 6.1 Figure 6.2 Figure 6.3 Figure 6.4 Figure 7.1 Figure 7.2 Figure 7.3 Figure 8.1 Figure 8.2 Figure 8.3 Figure 9.1 The Breakout Strategy Cycle Companies Getting on the Fast Track Companies Staying Out Front Types of Capital and the Capital Accumulation Process The Vision Wheel State Transition for Harley-Davidson: Organization State Transition for Harley-Davidson: Culture State Transition for Harley-Davidson: Relationships State Transition for Harley-Davidson: Markets The Six Pillars of a Value Proposition Leveraging up the Apple Value Proposition Reconciling Different Value Propositions Leveraging up Samsung Electronics’ Value Proposition Components of a Business Model Aligning the Business Model and Value Proposition Business Model Needs Analysis Delivering Strategy System Balance and Strategy Delivery......

Words: 103858 - Pages: 416

Premium Essay

Indian Bpos

...of Institutions on Global Trade Effects of Globalization on Corporations Regional Trading Blocs The European Union (EU) Asia Comparative Management in Focus: China's Economy Keeps on Chugging. The Americas Other Regions in the World The Russian Federation The Middle East Developing Economies The African Union The Globalization of Human Capital The Global Manager's Role The Political and Economic Environment Political Risk Political Risk Assessment Managing Political Risk Managing Terrorism Risk Economic Risk The Legal Environment Contract Law Other Regulatory Issues The Technological Environment Global E-Business Conclusion Summary of Key Points Discussion Questions Application Exercises Experiential Exercise Internet Resources Case Study: Indian BPOs Waking Up to the Philippines Opportunity? Management Focus: Intel Brings Changes to Vietnam's Economy and Culture Information Technology OBJECTIVES: 1. To understand the global business environment and how it affects the strategic and operational decisions which managers must...

Words: 20839 - Pages: 84

Premium Essay

Cross Cultural Management

...Cross-Cultural Communication Theory and Practice Barry Tomalin; Brian J. Hurn ISBN: 9780230391147 DOI: 10.1057/9780230391147 Palgrave Macmillan Please respect intellectual property rights This material is copyright and its use is restricted by our standard site license terms and conditions (see palgraveconnect.com/pc/connect/info/terms_conditions.html). If you plan to copy, distribute or share in any format, including, for the avoidance of doubt, posting on websites, you need the express prior permission of Palgrave Macmillan. To request permission please contact rights@palgrave.com. Cross-Cultural Communication 10.1057/9780230391147 - Cross-Cultural Communication, Brian J. Hurn and Barry Tomalin Copyright material from www.palgraveconnect.com - licensed to Griffith University - PalgraveConnect - 2014-04-12 This page intentionally left blank 10.1057/9780230391147 - Cross-Cultural Communication, Brian J. Hurn and Barry Tomalin Copyright material from www.palgraveconnect.com - licensed to Griffith University - PalgraveConnect - 2014-04-12 Cross-Cultural Communication Theory and Practice Brian J. Hurn and Barry Tomalin Copyright material from www.palgraveconnect.com - licensed to Griffith University - PalgraveConnect - 2014-04-12 10.1057/9780230391147 - Cross-Cultural Communication, Brian J. Hurn and Barry Tomalin © Brian J. Hurn and Barry Tomalin 2013 Foreword © Jack Spence 2013 All rights reserved. No reproduction, copy or transmission of......

Words: 129836 - Pages: 520