BP Holdings Madrid Barcelona News TNK-BP/LIVEJOURNAL
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BP Holdings Madrid Barcelona News TNK-BP/LIVEJOURNAL

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TNK-BP is a major vertically integrated Russian oil company headquartered in Moscow. It is Russia's third-largest oil producer and among the ten largest private oil companies in the world. TNK-BP is ...

TNK-BP is a major vertically integrated Russian oil company headquartered in Moscow. 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 and 50% by a group of Russian businessmen, represented by the AAR (Alfa-Access-Renova) 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 confirmed that as of 31 December 2009 TNK-BP's total proved reserves amounted to 11.667 billion barrels (1.8549×109 m3) of oil equivalent, applying PRMS (formerly SPE) criteria. Proved reserves constitute a total proved PRMS reserve replacement ratio of 329%.
History
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-?? was created. ??R contributed its holdings in TNK International, ONAKO, SIDANCO, RUSIA Petroleum (which held licenses for the Kovykta field 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.

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BP Holdings Madrid Barcelona News TNK-BP/LIVEJOURNAL Presentation Transcript

  • 1. TNK-BP is a major vertically integrated Russian oil company headquartered in Moscow. Itis Russias third-largest oil producer and among the ten largest private oil companies inthe world. TNK-BP is Russias third largest oil company in terms of reserves and crude oilproduction. It is 50% owned by BP and 50% by a group of Russian businessmen,represented by the AAR (Alfa-Access-Renova) consortium.Since the merger in 2003 between BPs and AARs assets in Russia and Ukraine, TNK-BPhas expanded through acquisitions such as that of Slavneft and organically throughimproving operational efficiency. In that time, over a backdrop of shareholder dispute,TNK-BPs profits have risen from US$2.7 billion in 2003 to $5.3 billion in 2009.DeGolyer and MacNaughton confirmed that as of 31 December 2009 TNK-BPs totalproved reserves amounted to 11.667 billion barrels (1.8549×109 m3) of oil equivalent,applying PRMS (formerly SPE) criteria. Proved reserves constitute a total proved PRMSreserve replacement ratio of 329%.
  • 2. On 1 September 2003, BP and AAR announced the creation of a strategic partnership tojointly hold their oil assets in Russia and Ukraine. As a result, TNK-ВР was created. ААRcontributed its holdings in TNK International, ONAKO, SIDANCO, RUSIA Petroleum (whichheld licenses for the Kovykta field and the Verkhnechonsk field), and the Rospan field inWest Siberia (the New Urengoy and East Urengoy deposits). BP contributed its holding inSIDANCO, RUSIA Petroleum, and its BP Moscow retail network.In January 2004, BP and AAR reached an agreement to incorporate AARs 50% stake inSlavneft into TNK-BP. Slavneft, which has operations in Russia and Belarus, was previouslyowned jointly by AAR and Sibneft (now Gazprom Neft).
  • 3. In 2009, TNK-BP increased production to 1.69 million barrels per day (269×103 m3/d) of oilequivalent (excluding TNK-BP’s share in Slavneft production) compared to 1.642 millionbarrels per day (261.1×103 m3/d) of oil equivalent produced in 2008. In 2009, TNK-BPstotal proved reserves replacement ratio reached 329% according to PRMS methodology(formerly known as SPE). The average SEC LOF reserve replacement ratio over the past fiveyears amounted to 139%.On 18 October 2010, TNK-BP and BP reached an agreement for TNK-BP to acquire BPsupstream and pipeline assets in Vietnam and Venezuela for an overall price of$US1.8 billion.In October 2011, the TNK-BP agreed to acquire a 45 percent stake in Amazon oilexploration blocks from Brazils HRT Particiapoes for $1 billion.
  • 4. BP and AAR each own 50% of TNK-BP International Limited, which in turn owns 95% ofTNK-BP holding, with the other 5% floating freely on public markets.There are 11 directors on the TNK-BP board, with four each from BP and AAR and threeindependents. As of February 2011, chairman of the board was MikhailFridmanrepresenting AAR and vice-chairman was George Robertson representing BP.Maxim Barsky, former head of strategy, having been appointed as deputy CEO in June2010, is to officially take over as CEO in 2011.
  • 5. TNK-BP is a vertically integrated oil company with a diversified upstream and downstreamportfolio in Russia and Ukraine. Its upstream operations are located primarily in Siberiaand Volga-Urals region. In 2009 the company (excluding its 50% share in Slavneft)produced on average 1.69 million barrels per day (269×103 m3/d) of oil equivalent.In downstream, TNK-BP controls 675 thousand barrels per day (107.3×103 m3/d) ininstalled refining capacity, with principal refining assets locatedin Ryazan, Saratov,Nizhnevartovsk, and Lysychansk. The company operates a retailnetwork of approximately 1,400 filling stations in Russia and Ukraine working under theBP and TNK brands. The company is one of the key suppliers to the Moscow retail marketand is a market leader in Ukraine.One of TNK-BPs strategic goals is to expand its natural gas business. Its main gas asset inRospan International, owned 100% by TNK-BP. Rospan is located in the Yamal-Nenetsautonomous area with significant gas potential of 1.4 million barrels per day(220×103 m3/d) of oil equivalent of natural gas 3P reserves and an ability to produce15 billion cubic meters per year.
  • 6. One of TNK-BPs stated long term aims is to enter into the international market. On 18October 2010, TNK-BP and BP reached an agreement for TNK-BP to acquire BPsupstream and pipeline assets in Vietnam and Venezuela for an overall price of$US1.8 billion. According to the terms of the agreements, in Venezuela TNK-BP willacquire 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 inBoqueron SA. In Vietnam, TNK-BP will acquire from BP a 35% stake in an upstreamoffshore 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 PhuMy 3 power plant.Over 2009, despite an average decline in crude oil price of 36% year-on-year, TNK-BPgenerated profit of $5 billion. Since the companys emergence in 2003, TNK-BPs profitshave 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 autilization rate of 84.4%.
  • 7. In 2008, a corporate dispute between the major shareholders arose as BP and AARseemed to have differing visions for the companys corporate governance structure andfuture strategy. During the dispute, it was rumoured that some Western BP executivesexperienced visa problems, and the American CEO Robert Dudley was accused by AAR ofhaving violated Russian laws.On 4 September 2008, the parties to the dispute signed a five-page memorandum ofunderstanding, thus signaling the end of the disagreements. Robert Dudley stepped downfrom his role as CEO of TNK-BP and AAR achieved to have their President Mikhail Fridmaninstalled as interim CEO. Since then, an independent CEO, Maxim Barsky, has beenappointed and will officially take up his position in 2011.
  • 8. After the dispute was settled, the general consensus was that although AAR had increasedits influence, BP would be happy to keep its 50% stake as TNK BP represented 24% of BPsproduction and 19% of total reserves in 2007. Some investors had feared BP might lose itsinterest in TNK-BP with only minimal compensation. Tony Hayward, BPs chief executive atthe time, described the five page memorandum as "a very sensible and pragmatic way oflooking forward".In January 2010, BP and its Russian co-shareholders held their first joint media briefing topronounce their tensions gone and TNK-BP.s prospects bright.In January 2011, BP and Russias state oil company, Rosneft, formed a strategic partnershipon Arctic development. In March 2011 the Stockholm International Arbitration courtblocked the BP-Rosneft deal as breaching TNK–BP earlier contractual arrangements. BP hadpreviously signed a shareholding agreement with AAR, which stipulated that TNK–BP wouldbe the primary corporate vehicle for BP’s oil and gas operations in Russia. AARs legal actionled to the collapse of the BP-Rosneft deal in August 2011, when BP was replacedwith ExxonMobil as Rosnefts strategic foreign partner in the Arctic.
  • 9. TNK-BP has been criticized for its Siberian oil spills. In 2012 Russias Natural ResourcesMinister Yuri Trutnev announced that regulators plan to seek damages from TNK-BP asone of the biggest polluters of the Ob and Yenisei river basins in Siberia. He alsorecommended the company prepare a plan for replacing its pipelines. Each year, 300,000metric tons to 500,000 tons of oil and oil products are leaked into the Ob and Yeniseiriver basins, with TNK-BP the biggest offender. In 2011 TNK-BP reported a total 1,186pipeline ruptures. According to TNK-BP, the company has paid $2.1 billion for clean-upsince 2003 and has established a $500 million fund ‘‘to resolve the inheritedenvironmental problems, accumulated since 1962."