I. CASE SYNOPSIS

TNK–BP is a joint venture company between TNK ( Tyyumen Oil Company ) and BP ( British Petroleoum ) in Russia. British Petroleum. was the world’s 3rd largest oil and gas supermajor who was founded as the Anglo Persia Oil Company. BP’s upstream concern operated in assorted states ( USA. UK. Australia. Angola. Azerbaijan. Canada. Egypt. Russia. Trinidad. Tobago and Indonesia ) . BP’s production growing was constrained by its mature oil Fieldss. so BP was sharply looking for new militias and the interest in TNK-BP was a major portion of expected production growing.

In recent old ages. BP’s fiscal public presentation in many countries lagged behind that of ExxonMobil and Shell. TNK. a company held 50-50 by a group known as Alfa Access/Renova or AAR. TNK was created in 1997 from a bunch of 600 upstream and downstream companies in Russia and Ukraine acquired through assorted denationalization auctions. AAR was a complex confederation affecting three private investing companies: Alfa Group by Mikhail Maratovich Fridman. Renova Group by Viktor Vekselberg and Access Industries by Len Blavatnik.

Russia was the world’s largest natural gas manufacturer and 2nd largest petroleum oil manufacturer Oil and gas grosss made up about 50 % of Russian budget grosss. Russian oil and gas industry was dominated by six big houses: Foreign investor ( TNK-BP. Lukoil ) and Goverment controlled ( Gazprom. Rosneft. Surgutneftegaz and Tatneft ) . Gazprom was Russian largest company and the world’s largest gas production. Problems of oil industry in Russia: ( 1 ) Aging oil Fieldss and hapless care. ( 2 ) a revenue enhancement and regulative government that was progressively viewed as confiscatory by oil companies and ( 3 ) a famine of Russian and foreign investing in geographic expedition and development.

TNK-BP develop and operate Russian oil finds. Joint venture was set up because of shareholding of Sidanco was owned by BP and TNK. But in fact. BP and TNK have different prespective in running concern. this may caused struggle between them.

The history of TNK-BP joint venture:
In 1997:
* BP paid $ 571 million to Uneximbank for 10 % ownership interest in Sidanco.
* The trade gave BP 20 % of vote rights. a place on the board. and the right to put up CO and FO. * The purpose was that BP and Sidanco would put up a joint venture. In 1998:

* Sidanco’s subordinate. Chernogreft was driven into bankcruptcy by TNK ( Tyumen Oil Company ) because of big debts continued to lift. * TNK held by AAR ( Alfa Access/Renova ) .
* AAR was a complex confederation affecting three private investing company: Alfa Group by Mikhail Maratovich Fridman. Renova Group by Viktor Vekselberg. and Acces Industries by Len Blavatnik.

In 1999:
* BP wrote off $ 200 million of its investing in Sindaco. * Chernogorneft was sold out of bankcrupcy for $ 176 million to TNK. * TNK and BP announced an understanding under which Sindaco would recover Chernogorneft in return for TNK having 25 % interest in Sindaco.

In 2000:
AAR’s commanding stockholders replaced Unexim Gruop as the dominant stockholders of Sindaco.

In 2003:
* The new company TNK- BP announced that BP’sa major strategic confederation with the same companies with which it had battled for control of Sidanco. * For 50 % interest. BP would pay AAR $ 3 billion in hard currency and three subsequent one-year payment of $ 1. 25 billion in BP portions.

In 2004:
A major restructuring simplified the complex TNK – BP retentions ( a twelve subordinates and 100s of legal entities ) .

In 2005:
* Made joint venture understanding.
* BP appointed Robert Dudley ( a veteran Amoco and BP executive ) as CEO TNK-BP.

II. IDENTIFICATION OF ISSUE
The chief issue of this instance is struggle between BP with TNK-AAR and Russian authorities. This issue was proved by some facts: * CEO TNK-BP. Robert Dudley asked to vacate by Russian stockholder. * AAR-TNK and BP have different type of running concern. * TNK-BP is hard to develop because of authorities policy which is non back up their concern struggle with AAR-TNK * Expatriate visa jobs for BP

* “The Alfa Playbook”

III. CASE ANALYSIS
To analize this instance. we try to depict the external and internal environment of TNK-BP. This is needed to turn out that TNK-BP is deserving to keep or non.

External Analysis ( Porter’s Five Forces ) :

Internal Analysis ( Four Criteria of Sustainable Competitive Advantadge ) :

IV. CONCLUSION AND RECOMMENDATION
We conclude that TNK-BP is an illustration of joint venture which is fail to make new competitory advantadge. So that. we recommend BP to sold their portion to LUKOIL with an understanding between them to make joint venture BP-LUKOIL.

V. LESSON LEARNED
From TNK-BP joint venture instance. we can larn that non all of joint venture is succesfull and give the company a new comptitive advantadge. There are some job that may confront by the joint venture company. such as figure below.