TNK-BP (B): Russian Oil and Foreign Interests

In 2008, TNK-BP was in conflict. Representatives from BP and AAR (the two partners that owned TNK-BP) were at a stand-off regarding the company’s leadership, partner representation, and their division of power. BP was criticized by TNK-BP’s Russian shareholders for exercising too much control in the interest of BP (rather than TNK-BP). AAR, in turn, was accused of mounting a campaign of shareholder resistance for its own ends and abandoning the terms of the partnership agreement set forth when the company was founded in 2003. This highly public conflict, which had been intensifying since March 2008, came to a head when TNK-BP CEO Robert Dudley had his work visa revoked and was forced to leave the country on July 24. Tony Hayward, CEO of BP, was left with a difficult and complex decision regarding how BP should proceed regarding its Russian partnership. In September 2008, the two entities announced an agreement to resolve their dispute, which included Dudley’s resignation before the end of the year. The agreement was hailed as a victory by both sides, yet questions remained regarding TNK-BP’s future. In combination with the dramatic collapse of global oil prices and forecasts for a far less lucrative year, domestic and international observers alike wondered how successfully TNK-BP would move forward and what effect the current situation would have on Russia’s position in the global economy.