BP in Russia

Document Type
4 pages
Word Count
2167 words
Course Code
Read Case 3 BP in Russia (Case study 3: Strategic Management: Competitiveness and
Globalization 12e: Hitt, Ireland, Hoskisson) starting on page C-42 and analyze the case by
addressing the questions below: 1. Outline the challenges of conducting business in Russia’s
oil industry. Why is it strategically important for BP to secure a position in this market? 2.
Who are the prominent stakeholders in this situation, and what important motivational factors
underlie their behavior? 3. Review the terms, nature, and timing of BP’s strategic alliances in
Russia. What are the benefits and costs of the arrangement for each party? 4. Assess BP’s
management of its investments and strategic alliances in Russia. Why is the TNK-BP
partnership experiencing so much internal conflict? What can BP do to salvage the situation
in Russia? Do you agree with BP’s decision to block a TNK-BP cooperative arrangement with
Rosneft? Since entering the Russian oil market in 1997, BP plc (BP) had two main partners. The
first was Rosneft, the Russian state-owned oil major. The second was Alpha Access Renova (AAR),
a consortium of Soviet-born oligarchs and one of Russia's largest privately owned financial-industrial
conglomerates, with interests in oil, gas, and banking. In January of 2011, BP and Rosneft
announced the formation of a new strategic partnership to develop oil and gas reserves on the
continental shelf in the Russian Arctic, covering approximately 125,000 square kilometers in the
Kara Sea. Yet within five months, AAR, with whom BP had already formed another partnership,
would obtain a series of court injunctions, effectively scuttling the deal with Rosneft. The failure of

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