Tnk-Bp Case Study

In: Business and Management

Submitted By saty88
Words 2106
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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…...

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