TNK-BP (A): Russian Oil and Foreign Interests Case Solution

This case is about Business

On February 11, 2003, British Petroleum (BP) and a consortium of Russian financiers, called Alfa/Access/Renova (AAR), initially revealed their intent to produce a tactical collaboration to collectively hold their oil and gas properties in Russia and Ukraine. The business arising from this 50/50 collaboration would be called TNK-BP. When the offer closed in late August, TNK-BP turned into one of the leading 10 personal oil and gas business worldwide. In its very first 5 years, TNK-BP provided the greatest overall return amongst significant Russian oil business, compensating over $20 billion in dividends, inning accordance with BP. Yet, in 2008, even as TNK-BP remained in the middle of exactly what management referred to as its finest year ever in regards to outcomes, it discovered itself involved in a dispute so complicated that it threatened the extremely presence of the business. AAR had actually released a complex and belligerent project of investor advocacy versus BP, which some viewers viewed as the Kremlin aiming to reassert federal government control over the rewarding oil and gas market. The degree to which these 2 forces were operating in cooperation stayed uncertain. However the dispute, which had actually been growing gradually considering that March 2008, reached brand-new heights when TNK-BP CEO Robert Dudley had his work visa withdrawed and left the nation on July 24. As these occasions unfolded, all eyes goned on Russia, with domestic and worldwide observers questioning how the dispute would eventually be solved and exactly what impact it would wear Russia’s job in the worldwide economy. More particularly, BP’s president, Tony Hayward, was being carefully seen as he looked for to figure out BP’s next relocation.

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