TNK-BP is a major vertically integrated Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...

n oil company. It is Russia's third largest oil producer and among the ten largest private oil companies in the world. TNK-BP is Russia's third largest oil company in terms of reserves and crude oil production. It is 50% owned by BP
BP p.l.c. is a global oil and gas company headquartered in London, United Kingdom. It is the third-largest energy company and fourth-largest company in the world measured by revenues and one of the six oil and gas "supermajors"...

 and 50% by a group of Russian businessmen, represented by the AAR (Alfa
Alfa Group
Alfa Group Consortium is one of Russia's largest privately owned investment groups, with interests in oil and gas, commercial and investment banking, asset management, insurance, retail trade, telecommunications, water utilities and special situation investments...

Access Industries
Access Industries is a privately held, U.S.-based industrial group founded in 1986 by its chairman, Len Blavatnik. Access’s industrial focus spans three sectors: natural resource and chemicals; media and telecommunications; and real estate...

Renova Group
Renova Group is a large Russian conglomerate with interests in aluminium, oil, energy, telecoms and a variety of other sectors. The main owner and president is Viktor Vekselberg....

) consortium.

Since the merger in 2003 between BP's and AAR's assets in Russia and Ukraine, TNK-BP has expanded through acquisitions such as that of Slavneft and organically through improving operational efficiency. In that time, over a backdrop of shareholder dispute, TNK-BP's profits have risen from US$2.7 billion in 2003 to $5.3 billion in 2009.

DeGolyer and MacNaughton
DeGolyer and MacNaughton
DeGolyer and MacNaughton is a petroleum consulting company based in Dallas, Texas, with offices in Houston, Moscow, and Calgary.DeGolyer and MacNaughton was founded in 1936 by Everette Lee DeGolyer and Lewis MacNaughton. In 2004, it acquired Calgary-based Outtrim Szabo Associates forming its...

 confirmed that as of 31 December 2009 TNK-BP's total proved reserves amounted to 11.667 Goilbbl of oil equivalent, applying PRMS (formerly SPE) criteria. Proved reserves constitute a total proved PRMS reserve replacement ratio of 329%.


On 1 September 2003, BP and AAR announced the creation of a strategic partnership to jointly hold their oil assets in Russia and Ukraine. As a result, TNK-ВР was created. ААR contributed its holdings in TNK International, ONAKO, SIDANCO, RUSIA Petroleum (which held licenses for the Kovykta field
Kovykta field
The Kovykta gas condensate field is one of the largest undeveloped natural gas fields in Eastern Siberia, Russia. The field is located in the northern part of the Irkutsk Oblast, in the Zhigalovo and Kazachinsko-Lensk districts.-History:...

 and the Verkhnechonsk field), and the Rospan field in West Siberia (the New Urengoy and East Urengoy deposits). BP contributed its holding in SIDANCO, RUSIA Petroleum, and its BP Moscow retail network.

In January 2004, BP and AAR reached an agreement to incorporate AAR's 50% stake in Slavneft into TNK-BP. Slavneft, which has operations in Russia and Belarus, was previously owned jointly by AAR and Sibneft (now Gazprom Neft
Gazprom Neft
Gazprom Neft is the fifth largest oil producing and refining company in Russia. It's the oil arm of Gazprom, which owns 80% of Gazprom Neft's shares....


In 2009, TNK-BP increased production to 1.69 Moilbbl/d of oil equivalent (excluding TNK-BP’s share in Slavneft production) compared to 1.642 Moilbbl/d of oil equivalent produced in 2008. In 2009, TNK-BP's total proved reserves replacement ratio reached 329% according to PRMS methodology (formerly known as SPE). The average SEC LOF reserve replacement ratio over the past five years amounted to 139%.

On 18 October 2010, TNK-BP and BP reached an agreement for TNK-BP to acquire BP's upstream and pipeline assets in Vietnam
Vietnam – sometimes spelled Viet Nam , officially the Socialist Republic of Vietnam – is the easternmost country on the Indochina Peninsula in Southeast Asia. It is bordered by China to the north, Laos to the northwest, Cambodia to the southwest, and the South China Sea –...

 and Venezuela
Venezuela , officially called the Bolivarian Republic of Venezuela , is a tropical country on the northern coast of South America. It borders Colombia to the west, Guyana to the east, and Brazil to the south...

 for an overall price of $US1.8 billion.

In October 2011, the joint venture company has agreed to buy a 45 percent stake in Amazon oil exploration blocks from Brazil's HRT Particiapoes for $1 billion.

Corporate structure

BP and AAR each own 50% of TNK-BP International Limited, which in turn owns 95% of TNK-BP holding, with the other 5% floating freely on public markets.

There are 11 directors on the TNK-BP board, with four each from BP and AAR and three independents. As of February 2011, chairman of the board was Mikhail Fridman
Mikhail Fridman
Mikhail Maratovich Fridman is a Jewish Russian businessman. Mr. Fridman graduated from Moscow Institute of Steel and Alloys in 1986. In 1988 Fridman started his career in trading and financial services before founding Alfa Group Consortium in 1989...

 representing AAR and vice-chairman was George Robertson
George Robertson, Baron Robertson of Port Ellen
George Islay MacNeill Robertson, Baron Robertson of Port Ellen, is a British Labour Party politician who was the tenth Secretary General of the North Atlantic Treaty Organisation, between October 1999 and early January 2004; he succeeded Javier Solana in that position...

 representing BP.

Maxim Barsky, former head of strategy, having been appointed as deputy CEO in June 2010, is to officially take over as CEO in 2011.


TNK-BP is a vertically integrated oil company with a diversified upstream and downstream portfolio in Russia and Ukraine. Its upstream operations are located primarily in Siberia and Volga-Urals region. In 2009 the company (excluding its 50% share in Slavneft) produced on average 1.69 Moilbbl/d of oil equivalent.

In downstream, TNK-BP controls 675 koilbbl/d in installed refining capacity, with principal refining assets located in Ryazan
Ryazan is a city and the administrative center of Ryazan Oblast, Russia. It is located on the Oka River southeast of Moscow. Population: The strategic bomber base Dyagilevo is just west of the city, and the air base of Alexandrovo is to the southeast as is the Ryazan Turlatovo Airport...

, Saratov
-Modern Saratov:The Saratov region is highly industrialized, due in part to the rich in natural and industrial resources of the area. The region is also one of the more important and largest cultural and scientific centres in Russia...

, Nizhnevartovsk
Nizhnevartovsk is the second largest city in Khanty–Mansi Autonomous Okrug, Russia, located along the right bank of the Ob River. Population: 251,860 ; 239,044 ;...

, and Lisichansk. The company operates a retail network of approximately 1,400 filling stations in Russia and Ukraine working under the BP and TNK brands. The company is one of the key suppliers to the Moscow retail market and is a market leader in Ukraine.

One of TNK-BP's strategic goals is to expand its natural gas business. Its main gas asset in Rospan International, owned 100% by TNK-BP. Rospan is located in the Yamal-Nenets autonomous area with significant gas potential of 1.4 Moilbbl/d of oil equivalent of natural gas 3P reserves and an ability to produce 15 billion cubic meters per year.

One of TNK-BP's stated long term aims is to enter into the international market. On 18 October 2010, TNK-BP and BP reached an agreement for TNK-BP to acquire BP's upstream and pipeline assets in Vietnam and Venezuela for an overall price of $US1.8 billion. According to the terms of the agreements, in Venezuela TNK-BP will acquire from BP a 16.7% equity stake in the PetroMonagas SA extra heavy oil producer, a 40% stake in Petroperija SA which operates the DZO field, and a 26.7 % stake in Boqueron SA. In Vietnam, TNK-BP will acquire from BP a 35% stake in an upstream offshore gas production block containing the Lan Tay and Lan Do gas condensate fields, a 32.7% stake in the Nam Con Son Pipeline and Terminal, and a 33.3% stake in the Phu My 3 power plant.

Over 2009, despite an average decline in crude oil price of 36% year-on-year, TNK-BP generated profit of $5 billion. Since the company's emergence in 2003, TNK-BP's profits have risen from $2.7 billion to $5.3 billion in 2009.

In 2009, TNK-BP produced 12.5 billion cubic meters of associated petroleum gas with an utilization rate of 84.4%.

Corporate disputes

In 2008, a corporate dispute between the major shareholders arose as BP and AAR seemed to have differing visions for the company's corporate governance structure and future strategy. During the dispute, it was rumoured that some Western BP executives experienced visa problems, and the American CEO Robert Dudley
Bob Dudley
Robert "Bob" Dudley is the CEO of BP. He had served as President and Chief Executive of TNK-BP and on June 18, 2010, was assigned to be BP executive in charge of the Gulf Coast Restoration Organisation responding to the Deepwater Horizon oil spill.-Early life:Dudley was born in Queens, New York,...

 was accused by AAR of having violated Russian laws.

On 4 September 2008, the parties to the dispute signed a five-page memorandum of understanding, thus signaling the end of the disagreements. Robert Dudley stepped down from his role as CEO of TNK-BP and AAR achieved to have their President Mikhail Fridman installed as interim CEO. Since then, an independent CEO, Maxim Barsky, has been appointed and will officially take up his position in 2011.

After the dispute was settled, the general consensus was that although AAR had increased its influence, BP would be happy to keep its 50% stake as TNK BP represented 24% of BP's production and 19% of total reserves in 2007. Some investors had feared BP might lose its interest in TNK-BP with only minimal compensation. Tony Hayward
Tony Hayward
Anthony Bryan "Tony" Hayward is a British businessman, the former chief executive of oil and energy company BP. He replaced John Browne, Baron Browne of Madingley on 1 May 2007. His tenure ended on 1 October 2010 in large part due to the circumstances of the Deepwater Horizon oil spill...

, BP's chief executive at the time, described the five page memorandum as "a very sensible and pragmatic way of looking forward".

In January 2010, BP and its Russian co-shareholders held their first joint media briefing to pronounce their tensions gone and TNK-BP.'s prospects bright.

In January 2011, BP and Russia's state oil company, Rosneft
Rosneft is an integrated oil company majority owned by the Government of Russia. Rosneft is headquartered in Moscow’s Balchug district near the Kremlin, across the Moskva river...

, formed a strategic partnership on Arctic
The Arctic is a region located at the northern-most part of the Earth. The Arctic consists of the Arctic Ocean and parts of Canada, Russia, Greenland, the United States, Norway, Sweden, Finland, and Iceland. The Arctic region consists of a vast, ice-covered ocean, surrounded by treeless permafrost...

 development. In March 2011 the Stockholm International Arbitration court blocked the BP-Rosneft deal as breaching TNK–BP earlier contractual arrangements. BP had previously signed a shareholding agreement with AAR, which stipulated that TNK–BP would be the primary corporate vehicle for BP’s oil and gas operations in Russia. AAR's legal action led to the collapse of the BP-Rosneft deal in August 2011, when BP was replaced with ExxonMobil
Exxon Mobil Corporation or ExxonMobil, is an American multinational oil and gas corporation. It is a direct descendant of John D. Rockefeller's Standard Oil company, and was formed on November 30, 1999, by the merger of Exxon and Mobil. Its headquarters are in Irving, Texas...

as Rosneft's strategic foreign partner in the Arctic.
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