Oil On Troubled Waters

It was one of history's great oil deals: In June 2003, U.K. energy giant BP agreed to pay $7 billion to Russian oil company TNK to form a 50-50 joint venture to exploit some of Siberia's richest petroleum deposits. But a few months later, the partners were barely on speaking terms. A multibillion-dollar dispute had erupted over how fast BP should pay TNK stockholders for sharing their oil riches. The board of directors of TNK-BP stopped meeting.

"Especially at lower executive levels, there were deep suspicions of what each side's intentions really were," recalls Mikhail Fridman, chairman of the joint venture and its largest Russian shareholder.

Fridman's security chief reported to his boss that the BP side, led by the joint venture's CEO, Robert Dudley, was convening clandestinely once a week, possibly to plot how to rid the joint venture of Russian influence. Fridman called Dudley into his office and told him, "Bob, I don't want to have to listen to these silly reports, so just tell me -- why are you guys having secret meetings?"

Dudley responded that tensions over the payments issue were running high and that the board was inactive. "We had people in the company who were nervous, so I called a meeting with the foreign folks and told them not to get rattled or to speculate about anything," he explained to Fridman. Then, from his own informants, Dudley found out that the Russian side was having secret meetings of its own.

"Basically, they were discussing the same things we were," says Dudley. Although such behavior is "unusual in a joint venture," he concedes, "it was effective in settling everybody down."

到外面的世界，今天的TNK-BP和其他在俄罗斯运营的石油公司的最大危险是一个不可预测，越来越民族的克里姆林宫。但是，在TNK-BP绘制了最高高管的访谈描绘了一张合资企业的复杂图片，直到最近感觉到其俄罗斯和外国合作伙伴之间的争夺更威胁，而不是弗拉基米尔·普京总统。

When BP, Fridman and two other Moscow oligarchs created TNK-BP, it immediately became the poster child for foreign deals in Russia. The British company's investment was hailed as the largest foreign capital inflow of the post-Soviet era. Putin even attended the signing ceremony in London.

但自从几个月后尤科斯石油公司（Yukos Oil Co.）事件爆发以来，秋明石油公司（TNK-BP）在媒体上的形象就更像是靶子。针对该公司的追溯性税收评估威胁虽然最近有所减弱，但令人不安地类似于俄罗斯政府对当时该国最大的石油公司尤科斯（Yukos）进行有效的重新国有化，并将其董事长米哈伊尔•霍多尔科夫斯基（Mikhail Khodorkovsky）关进监狱的做法。官僚们抓住了英国石油公司一半的所有权，认为秋明-英国石油公司的俄罗斯身份不足以胜任新的重要自然资源开发项目。而一些政府官员指责该公司通过披露储备泄露“国家机密”。

这么长时间,tnk - bp被卷入一个内部struggle that turned so bitter that the company's Russian and foreign executives spied on one another and exchanged accusations of conspiracies. Russian executives and technicians were openly contemptuous of BP's management policies in the oil fields.

今天，尽管并非所有有争议的问题都得到解决，但双方都坚持认为最坏的情况已经过去。”我们取得了比我预期的更多的进展。对两国关系改善的解释，从认真努力弥合俄罗斯人和西方人之间的文化鸿沟，到为现场管理人员和技术人员举办密集的激励会议。不过，没有人会质疑这一新举措的主要原因：与油价飙升至每桶60美元以上相关的暴利。”我相信所有的股东都会说他们的预期已经超出了，”达德利说。

去年TNK-BP记录了40亿美元的销售额为143亿美元 - 2003年收入为10.4亿美元的飞跃。2004年每日产量为145万桶，TNK-BP成为第二大俄罗斯卢基诺石油有限公司后面的石油生产国，去年每天生产168万桶。（Yukos的行动与俄罗斯国有和私营公司争夺其物业。）

Yet in some ways TNK-BP has fallen short of the high expectations set for it. Given the new economic nationalism in Moscow, it is unlikely that another foreign oil corporation will be allowed to own anywhere near 50 percent of a joint venture in Russian natural resources. And despite hopes that TNK-BP would herald a new era of abundant Russian oil production to meet global needs at reasonable prices, the country's growth in oil output has actually declined.

然而,这几乎是必然的:合资企业has been a boon for its shareholders and for BP. (The U.K. company's share price climbed 28 percent last year and a further 24 percent in the since the beginning of this year, hitting 683.50 pence a share ($71.11) on September 29.) In 2004, its first full year of operation, TNK-BP accounted for 23 percent of BP's total daily production of 4 million barrels of oil and oil equivalents (such as natural gas). This enabled BP, the world's second-biggest oil company by market capitalization, to boost hydrocarbon output by 11 percent over 2003 levels. That compares with flat 2004 output by Exxon Mobil Corp., the largest energy company by market value, and a 3 percent production decline at No. 3 Royal Dutch/Shell Group. "There aren't many companies out there besides us that are increasing production and raising their total reserves," says James Dupree, TNK-BP's executive vice president for technology.

秋明-英国石油公司的外国和俄罗斯双方都坚持双方各占一半的合资企业，而不是任何一方的少数股权。在启动秋明英国石油公司（TNK-BP）的伦敦签字仪式上，普京大声问道，在这样的安排下，争端将如何解决。这是一个有先见之明的问题。不出所料，最大的争论是关于钱的。根据成立该公司的协议，英国石油公司应在三年内向俄罗斯合作伙伴支付70亿美元。但俄国人后来立即要求这些资金，敦促英国石油公司在必要时获得银行贷款以支付这些资金。

The trio of oligarchs on the Russian side is unusually cohesive. Fridman, 41, chairman of Alfa Group Consortium, a financial-industrial conglomerate, holds 25 percent of TNK-BP through Alfa. Viktor Vekselberg and Len Blavatnik, 47-year-old former university buddies, each hold 12.5 percent of the joint venture through their companies. Of the three, Blavatnik, chairman of Access Industries, a New Yorkbased private equity investment firm, is the least active in TNK-BP, though he sits on its board. The partner most involved in the joint venture's everyday affairs is Vekselberg, chairman of Moscow-based JV Renova, an investment firm with large industrial holdings in Russia; he is an executive director and board member at TNK-BP.

Vekselberg gained notoriety last year when he bought the largest private collection of Fabergé eggs from the Forbes family, publishers of the magazine of the same name, for about $100 million. He then donated the fabled eggs, which had once belonged to the czars, to several Russian museums in what was viewed as a philanthropic gesture to help raise the public's low esteem for Russian business magnates. But Vekselberg has been teased so often about the Fabergé donations by friends and the local media that he has banned all mention of eggs of any sort in his presence. He and Fridman bond outside of business by taking annual two-week treks to exotic places around the world: Mongolia's Gobi desert, the Australian outback and the plains and glaciers of Patagonia.

Fridman met Vekselberg and Blavatnik in the mid-1990s, and the three joined forces in the often lawless, violent battles for control of Siberian oil. In 1996 they made a successful $800 million bid for a controlling share of Tyumen Oil Co., or TNK, which was being auctioned off by the government. "Back then it was too heavy a financial obligation for each of us alone to afford," says Fridman.

Seven very tumultuous years ensued. Using private security forces and questionable court rulings, the three Russian partners seized petroleum fields that BP had bought for $471 million in 1997 from another oligarch, Vladimir Potanin. According to Fridman, BP was an unintended victim in the struggle against Potanin. Nonetheless, the U.K. oil giant sued Fridman and TNK in the Russian courts and exerted its influence to stall a $500 million loan that TNK was seeking from the Export-Import Bank of the United States. BP sought to regain its lost Siberian fields by appealing directly to Putin and then by getting U.K. Prime Minister Tony Blair to make a written plea to the Russian leader, who declined to get involved.

In the end, self-interest brought TNK and BP together. BP needed to replace its depleting fields in Alaska and the North Sea and was willing to buy Siberian reserves a second time for a much higher price. TNK needed BP's technical expertise and worldwide marketing network -- and its money. But even allowing for the wild history of the oil industry, the ability of both sides to overcome their past problems and form their joint venture surprised observers. "I still find it amazing that they were able to reconcile," says Yulia Woodruff, a Russian oil analyst at Energy Security Analysis in Boston.

In contrast to the bitter, widely publicized fracas leading up to the joint venture, the subsequent impasse between the Russian and foreign partners over how quickly BP should pay for its half of TNK was largely hidden from public view. One reason was the shifting political and economic environment. By late summer 2003 the Yukos affair had begun. Khodorkovsky was under investigation by the government, allegedly for tax evasion and fraud but also, many analysts believe, because he had violated an agreement by business oligarchs not to challenge Putin politically.

俄罗斯投资者相信短暂的era of rampant capitalism was being reined in. Some oligarchs sent billions of dollars abroad. Others, like Fridman, rushed to invest part of their swelling profits in economic sectors that the government considered less strategic than hydrocarbons. "We don't want to just concentrate on oil and gas," says Fridman. "We have diversified into telecommunications, banking and supermarkets."

But hydrocarbons remained his biggest business, and bad blood in the TNK-BP boardroom soon spilled over into the company's oil fields. Output had stagnated over the previous decade, and the Russian shareholders questioned whether BP's managerial strategy to restore production growth would work in the overstaffed, demoralized oil camps. The executive picked by BP to spearhead the turnaround was technology chief Dupree, a tall, soft-spoken Texan, now 45, who had worked for the U.K. oil company all over the world.

当杜普利第一次访问西伯利亚西部的萨莫特罗油田时，他被浪费和年久失修惊呆了。整整45%的油井无法正常工作。其余的使用了20年来从未升级过的技术。更令人沮丧的是，无精打采和无能的管理做法几乎使劳动力陷于瘫痪。”我最初的印象是一个多年来被严重忽视的领域我的第二个想法是，多好的机会啊。”

作为一名汽车爱好者，杜普利把萨莫特乐比作一辆多年来没有经过抛光或调整，但不需要大修发动机的古董汽车。”它只需要一个干净的化油器，也许一个催化转化器和一个轮胎的变化，“他说。这不是一个无聊的比喻。秋明-英国石油公司为使萨莫特勒油田和其他俄罗斯油田达到巡航速度所花的钱，按照石油行业的标准来说，简直是天翻地覆。2004年，秋明-英国石油公司（TNK-BP）投资8亿美元，将日产量从2003年的128万桶提高到145万桶。

俄罗斯有一些最低的生产成本the world. TNK-BP spends only about $2.50 to bring a barrel of oil out of the ground and ready it for shipment. And the cost of increasing the company's proven reserves can be downright cheap. For example, at TNK-BP's vast Nyagan field, west of Samotlor, an investment of just $7 million last year led to a rise in proven reserves of almost 2 million barrels. "I mean, we want to do that all day long, right?" says Dupree.

According to Dupree, management and politics were bigger obstacles than technology to boosting output and proven reserves. Samotlor began pumping oil in the 1970s, and production ran smoothly enough until 1991. Then the collapse of Communism and the breakup of the Soviet Union undermined the command economy without replacing it with a new management model. "The wells were breaking down, and there was nobody in authority to ask for money or make the effort to fix them," says Dupree.

TNK-BP's Russian partners insisted that the quickest way to revive production was to return to traditional ironfisted management. "You must be willing to impose penalties on people who fail to fulfill work standards or obligations," says Fridman. "Otherwise employees won't respect you and will just ignore your directives." BP managers rejected this approach. They were convinced that any attempt to revert to Soviet-era, command-economy management style would bring only short-term gains. "It's just not a sustainable way to take the company forward," says Dupree. "The better alternative is to get people to figure out the problems and solutions."

Dupree had begun to work on the turnaround in early 2003 to build confidence between TNK and BP months before they officially signed their joint venture that June. He formed a team of eight BP managers -- dubbed an "expert working group" -- who held intensive training sessions for senior Russian personnel from every oil field to tackle major bottlenecks. Each participant then trained another elite group of managers in an expanding network that today has 400 graduates. The first expert working group, led by Dupree, holed up for two bitterly cold days in February 2003 at the Hotel Tatyana, a small, nonluxury establishment in downtown Moscow. "We did an analysis of the biggest technology gaps and how to best solve them," says Dupree. Those gaps ranged from poor drilling performance to faulty pumps to the outdated software that operated the wells.

The most urgent task was to restore the water flood system. At almost all TNK-BP fields, water is pumped into the ground to push oil deposits toward the wells. For the system to work best, the oil must be pushed on all sides by onrushing water. But with so many water pumps broken down, much of the oil either remained undisturbed in its deposits or was flushed away from the wells. "For ten years these water floods just ran nonproductively," says Dupree.

While the water flood system was being restored, TNK-BP had to repair the pumps that lifted oil up the wells. They dated to the Soviet era, and all were the same size and power. "It was like the old Volga automobile, which was assembled with the same door handles for 20 years," says Dupree, ever the car buff. New pumps of four different dimensions were put in place, along with sophisticated software to keep them running at top efficiency.

To implement the new technology, TNK-BP had to win over its Russian workforce. The expert groups, almost all trained at the Hotel Tatyana sessions, encountered stiff resistance when they returned to the oil fields. There were rumors that productivity would be raised by cutting jobs. But TNK-BP chose not to dismiss any of its nearly 100,000 Russian employees. (There are barely 1,000 foreigners on the joint venture's payroll.)

即便如此，许多俄罗斯技术人员都觉得他们的技能被忽视了。虽然苏联技术已经过时，但旧时代灌输了对测量和数据收集的值得称道的痴迷。工程师确切地了解机械和井中的失修以及为什么。“这个问题是让某人汇总所有信息并采取行动，”Dupree说。一些老年人不信任新的外国老板和设备。当Dupree将他的一个顶级管理人员送到尼亚坦领域时，总工程师拒绝与他交谈。

But the disgruntled Russians were all too willing to talk to Fridman. They complained that the foreigners brought over by BP knew nothing about handling Russians and were overly confident about high-tech equipment. Deeply skeptical himself about the BP team's management style, Fridman was attentive. "I told the BP executives, 'Maybe it's possible for Russians and foreigners to understand each other at corporate headquarters, but it's a lot harder in the fields,'" he says.

杜普利和他的工作组坚持他们的温和方法。杜普利认为，俄罗斯油田技术人员和管理人员对变革的抵制很大程度上与他们对失败承担责任的恐惧有关，因此他自愿亲自承担所有挫折的责任。”如果能让他们更舒服地责备我，那也没关系，”他说。

这种策略开始得到皈依。就连脾气暴躁的尼亚根总工程师也对新来的经理敞开了心扉。在他们第三次访问他的营地时，他邀请他们查看附近一家工厂正在生产的油管，并帮助他确定油管是否符合质量标准。很快，改变态度的消息又传到了弗里德曼身上。

"The same people who had complained before about the BP managers were now telling me they were very professional people who knew how things worked and knew how to listen," says Fridman. What impressed him most, he adds, were reports from the Russian field staff that "our output has increased a lot."

Not only was oil production rising -- by 13 percent last year -- but so were proven reserves, which grew from 9.06 billion barrels in 2003 to 9.082 billion barrels in 2004. Moreover, TNK-BP reported an additional 8 billion barrels in probable reserves, meaning that at least half of that total likely exists. Investors and creditors look carefully at such reserve replacement figures. Last year, for example, when Royal Dutch/Shell's worldwide replacement rates proved lower than initially reported, the company's share price tumbled, leading to a management shake-up.

TNK-BP去年占BP总石油总产量的三分之一以上，也据原来是U.K.公司最重要的代替储备来源。到目前为止，显着的，俄罗斯的生产和经过验证的储备几乎所有增加 - 对于TNK-BP等公司 - 正在来自现有领域，称为棕色领域。“外国公司引入的更好的恢复技术和更好的管理层，更多的石油正在从这些领域恢复，而不是认为国际能源机构的分析师FrançoisCattier说。

更多的利润也在增加。正是石油价格的飙升打破了秋明石油和英国石油之间的僵局；光是现金流就足以让俄罗斯的合作伙伴满意。英国石油公司遵守其投资计划：到今年第一季度，它已经花费了承诺的70亿美元中的53亿美元。即便如此，俄罗斯的合作伙伴一直在推动英国石油公司的全部投资在那时付清。但股息不仅弥补了差额。截至2004年底，秋明石油和英国石油公司共分了39亿美元的支出。弗里德曼和他的英国石油公司合作伙伴热情洋溢。

But the euphoria does not extend to those who have been expecting Russia to greatly increase its oil production. The U.S., which had hoped to use Russian oil to reduce its depen-dence on Middle Eastern supplies, is importing less than 250,000 barrels a day from Russia. "It should be ten times that or more, given the reserves that are here," U.S. Energy Secretary Samuel Bodman complained in a press conference during a visit to Moscow in May.

Instead, Russian oil production growth is slowing. In 2004 production rose by 740,000 barrels a day, or 8.6 percent over the year before. But according to a Reuters poll of 18 experts in January, the median forecast for growth this year is only 470,000 additional barrels a day, or 5.6 percent. TNK-BP says its 2005 production will rise between 5 and 7 percent.

Analysts and oil company executives lay much of the blame on the government for its mishandling of Yukos and the onerous royalties and taxes on oil companies. "The Kremlin's actions are curbing upside opportunities for production growth in existing fields, let alone promising new ones," says Energy Security Analysis analyst Woodruff.

The partial renationalization of Yukos has led to a slowdown in its output. It has also created uncertainties among other producers about property rights and tax assessments. Earlier this year, for example, TNK-BP was hit by claims for $1 billion in back taxes in what seemed to be a repeat, on a smaller scale, of the stance taken against Yukos. Those fears subsided when the government reduced the charges to $247 million in August.

更大的关注程度是对当前石油收入的税收上升，该公司表示，该公司表示劝阻对绿地项目的投资。政府将近90％的收入超过25美元桶。据首席执行官Dudley称，TNK-BP预计今年将支付115亿美元的税收和其他征税，而2004年为65亿美元。“政府从税收的石油公司越多，剩下的投资越少，”警告说Lukole副总裁Leonid Fedun于莫斯科投资会议于6月，由俄罗斯领先的俄罗斯投资银行组织。

Investment is needed not only to develop new oil fields but also to solve transportation bottlenecks, which some analysts contend are already limiting oil export growth. "If the pipe was bigger, more would come out," says James Fenkner, chief strategist at Troika Dialog, a Moscow-based brokerage. But key pipelines are operating at full capacity. Ports are almost saturated. Roads and railways -- the costliest means of transportation -- are forced to handle excess oil shipments.

In addition to swelling taxes, TNK-BP has suffered its share of frustrations stemming from waffling government policies and aggressive bureaucrats. Visas have been held up for dozens of its foreign managers. Accusations by some government officials that the company reveals state secrets when it makes public the data on its oil reserves stem from a law left over from Soviet times. Officials have made contradictory announcements on whether or not foreign companies will be allowed minority stakes only in new natural-resource projects deemed to be of strategic economic importance. This wavering could delay or even scuttle some major green-field investments planned by TNK-BP in undeveloped Siberian gas and oil fields.

Lord Browne, BP's chief executive officer, was concerned enough about possible restrictions to fly to a Moscow meeting with Putin in April. The president said he continued to support BP's joint venture in Russia and assured Browne that TNK-BP would be allowed to invest in new projects.

尽管如此，该公司不能依靠峰会会议解决与俄罗斯官僚机构的所有争端，因此它已经开发了多个政府级别的广泛联系网络。尽管如此，来自不同官员的消息往往不一致，这使公司难以决定它应该担心的内容以及它可以安全地忽略什么。“我们只需要学会不要过度反应，并意识到事情永远不会像他们似乎一样清晰，”达德利说。

TNK-BP relies on its Russian partners to help decipher the importance of competing bureaucratic claims and to deal with the more problematic issues, such as tax assessments. "Clearly, the Russian partners have more sophistication than BP does about how the bureaucracy works here," says Dudley.

In this landscape of anxieties and constraints, TNK-BP still appears to be better positioned than any other oil company. The Russian government is unlikely to allow another foreign investor to own half of a major joint venture in natural resources. "There are no opportunities of this scale left," says Tom Ellacott, an analyst at Edinburgh oil consulting firm Wood Mackenzie. "TNK-BP really did take full advantage of being a first mover in Russia."

Even after paying all those taxes, the company is generating a cash flow from its oil sales that far exceeds its investment opportunities. The government has not yet approved major green-field projects, such as the vast Kovytka natural-gas reserves in Siberia that TNK-BP is negotiating to develop with Gazprom, the state-owned natural-gas behemoth. So the high dividend payouts will continue. "From TNK-BP's perspective there is no point in building up cash in the company if you don't need it yet," says Stephen O'Sullivan, head of research at Moscow-based investment bank United Financial Group.

Both sides of the joint venture are also eager to prove to their investors that they have made a very good deal. "They are trying to return money to their main shareholders as quickly as possible -- it's as simple as that," says Zarko Stefanovski, an oil analyst at Moscow-based Aton Capital Group, an investment bank.

涌出的回报使TNK-BP与其少数股东慷慨，他们占据了合资企业控制的约7％的石油特性。在创建TNK-BP之前，他们曾抱怨过多年来他们的投资被弗里曼和他的俄罗斯合作伙伴缩短。他们断言，他们仍然只收到其应得的石油利润的一小部分，他们在BP与TNK签署其交易后18个月。“BP表现得像俄罗斯寡头，那是可耻的，”莫斯科繁荣资本管理莫斯科投资组合经理Ivan Mazalov表示，俄罗斯股票的6亿美元包括大约12200万美元的TNK-BP股票。

秋明-英国石油公司官员说，大股东之间的争吵推迟了小股东投诉的解决。许多分析人士将拖后腿归咎于合资企业的俄罗斯合作伙伴。”“感知可以变成现实，”弗里德曼说很难让人们相信，我们和英国石油一样有兴趣与少数股东达成和解。”

根据1月份宣布的交易，使用Deloitte＆Touche进行独立估值，TNK-BP提议少数股东接受两阶段合并。在本公司的第一阶段少数股东，提供了三个最大的石油附属公司，提供了将股票交换到新创建的TNK-BP持有股票，或被购买。在第二阶段，安排在今年晚些时候，14名较小的子公司将被合并。Deloitte＆Touche评估了新控股公司，收于185亿美元，靠近石油咨询公司和木质丘陵和Aton资本等投资银行的TNK-BP 200亿美元至250亿美元的估值。

In March the minority shareholders accepted the consolidation offer with varying degrees of enthusiasm. "It amounts to a decent burial for people who endured a miserable life as minority shareholders," says Adam Landes, who has followed the controversy as a London-based oil analyst with Renaissance Capital. But William Browder, chief executive officer of Hermitage Capital Management, a $1.7 billion, Moscow-based fund that says it is the biggest minority shareholder in the newly consolidated company, was so delighted with the offer that he told Fridman, a man he had excoriated for years, that he would drop by his office to thank him personally.

"This is one of the few situations in which minority shareholders have been properly treated in Russia," says Browder, who declines to disclose the size of his fund's holdings in TNK-BP properties. "The consolidation valuations take into account the past dividend payouts that we missed out on."

In response to Browder's comment, Fridman quips, "Of course, it made me suspicious that we had overpaid."

由于其投资巨大和快速的回​​报，TNK-BP交易继续展示其他石油专业的胃口。然而，政府和俄罗斯石油公司既不在生产分享协议中似乎有兴趣。

"When the Russians look for partners nowadays, they want companies that have retail capabilities," says S. Douglas Stinemetz, who specializes in Russian energy deals as a partner at Houston law firm Haynes and Boone. The new model is ConocoPhillips Co.'s 7.6 percent stake in Lukoil, which already has bought the Getty gas station chain in the U.S. and is looking to expand its downstream retail operations. For Western oil majors, promises to develop new markets abroad for Russian oil companies seem an affordable price to pay for access to new reserves, even in a climate of rising economic assertiveness by the Russian state. "Some oil companies may complain that it's getting too difficult to do business in Russia," says Stinemetz, "but it's easier than in Indonesia or Nigeria or Iraq."

TNK-BP officials insist they would not trade places with any other company. "In the history of oil, this is a fascinating joint venture that is doing very well in a very turbulent environment," says CEO Dudley. Prospects will be even rosier if the turbulence is kept outside the company. "If we on the Russian side of the company and our partners on the BP side trust each other and agree on a common policy toward the government, we will be in a stronger position than any other oil company in the country," says Fridman.