Production of oil and natural gas in Russia
Production of oil and natural gas is the cornerstone of the Russian economy, and the availability of these natural resources has attracted the interest of many parties to the lucrative industry in Russia.
Introduction of British Petroleum (BP) in Russia
One of the companies that vested their interest in the oil and petroleum industry is British Petroleum (BP). The British company has been in existence in the industry since 1909 when it was founded under the name Anglo-Persian Oil Company. BP entered the oil and petroleum mining industry in Russia in 1997, but it did not successfully attain the desired goals due to the enormous opposition and a failed partnership with its first partner, Uneximbank group. Following the failure, BP engaged a new partner, Tyumen Oil Company (TNK). The partnership between TNK and BP has encountered a significant challenge which is the basis of this discussion. The paper will focus on the fundamental motivation factors that are determining the approach of the stakeholders in the TNK-BP case.
Expansion and employment policies
The TNK-BP struggle can be traced to the decision by the two partners on expansion and employment policies. The growth of the partnership and the need to increase production has led to the contention between TNK and BP. The primary stakeholders in the TNK-BP partnership are the British government and the Russian government (Inkpen and Moffett 394). From the communications between the two parties, it is evident that the two governments have vested interests in the venture made by the TNK-BP partnership. From this point, we can establish that one of the motivational factors in the TNK-BP case is the need to control (political forces) (Dyker 341). It is evident that the two issues in the company can be mediated well through the use of an experienced business-minded team, but the inclusion of the Russian and British government as the primary stakeholders has shifted the ability to negotiate.
The need for control
The two powerhouses see the need to exert themselves in a manner that they appear superior which has led to the inability to come up with a solution to the crisis. According to Dyker (345), the need to have control over the partnership has led the stakeholders into making policies which favor their interests in the TNK-BP venture. The first instance of the need to control by the stakeholders as a motivational factor can be seen by the move by the Russian president, Vladimir Putin. Putin created a new and favorable law that dictated that "there should be Russian majority ownership" (Dyker 349) in instances of investment ventures undertaken by any foreign company. Alongside this proposal, the role of the British premier was set to that of offering its services through the resources of the British government in future dialogues that involves the partnership.
Environmental concerns
In the discussions emanating from the TNK-BP case, the environment has proven to be among the key motivational factors in the engagement. In the discussion by Inkpen and Moffet (399), there are the internal stakeholders which involve the employees, owners, and managers while there are the external stakeholders which in this case is the British and Russian governments, environmental groups and others. Russia has significant natural resources which raise the stakes among all the stakeholders. Despite the financial gains made by the current explorations, there is the matter of future mineral explorations and the possible effects such ventures will have on the environment (Inkpen and Moffett 400). The environmental concerns emanating from risks such as oil spills and the population which brings the discussion on safety concerns has proven to become a point of discussion in the talks. From this view, the environment has stood to become a crucial motivational factor in the TNK-BP case.
Work Cited
Dyker, David A. “INWARD FOREIGN DIRECT INVESTMENT IN RUSSIA: GOVERNANCE, BUSINESS ENVIRONMENT AND SUPPLY NETWORKS.” WORLD SCIENTIFIC REFERENCE ON GLOBALISATION IN EURASIA AND THE PACIFIC RIM: Volume 1: Foreign Investment, World Scientific, 2015, pp. 339–360.
Inkpen, Andrew C., and Michael H. Moffett. The Global Oil & Gas Industry: Management, Strategy & Finance. PennWell Books, 2011.
