1997-1999

BP pays nearly £500 million for a 10 per cent stake in Sidanco, a Siberian oil producer. Two years later Tyumen Oil Co (TNK) seizes control of a lucrative Sidanco subsidiary in a controversial bankruptcy action vehemently opposed by BP.

TNK denies charges of manipulating the bankruptcy process.

After months of wrangling, TNK and BP announce deal under which TNK would hand the subsidiary back in return for a 25 per cent stake in Sidanco.

Background

• Opec on alert as oil price hits $82 a barrel

• Former BP chief returns to energy industry

• Activists fight BP's US refinery plans

• Gazprom could be key US supplier in deal with BP

• BP faces fresh criticism of Alaska safety systems

Riverstone's gain will remind BP of its loss

The buyout industry has trouble enough these days without one of Britain’s most prominent executives jumping ship

• Humiliated former BP chief returns to energy industry with private equity job

Related Internet Links

• Guess where the oil price was...

Related Internet Links

• BP company information

• BP share price chart

• BP forecast

2001

TNK reveals plans to buy out the remaining Sidanco shareholders other than BP. Viktor Vekselberg, one of TNK’s three oligarch backers, alongside Mikhail Fridman and Len Blavatnik, says: “I’m not sure how BP feels about this. We would like to keep BP in Sidanco, and put Sidanco inside of TNK.”

TNK adds that it would like BP to help it develop a big gas project in Eastern Siberia - Kovykta.

2002

After months of talks between Lord Browne of Madingley and Mr Fridman, BP signals its support for TNK by buying a 15 per cent stake in Sidanco from them. This takes BP’s shareholding in the business to 25 per cent, alongside TNK's 75 per cent.

BP considered a deal with Yukos before the move.

2003

BP makes the single largest foreign direct investment in Russia, paying $6.75 billion to join forces with TNK.

President Putin welcomes the deal as “a strategic partnership, the evidence of trust, evidence that the Russian economy has stablized”.

Lord Browne says that Russia “rivals any other potential opportunity available anywhere in the world".

He adds that despite a “tough time” in Russia initially, BP and TNK "has gradually built an important, mutually beneficial relationship".

Bob Dudley, the BP vice-president who negotiated the deal, adds: “Two years in Russia is a very, very long time.”

2005

Lord Browne flies to Russia for talks with President Putin after TNK-BP is hit with a £495 million government demand for back-taxes. President Putin moves to reassure the group. He says: "We made no mistake in supporting your decision two years ago. We hope that in the future your business will grow in the same manner and at the same rate."

Lord Browne says TNK-BP had met each of the four goals Putin set when the TNK joint venture was sealed — increase production, introduce new technology, improve TNK's management and abide by regulations.

2007

President Putin rips into TNK-BP for failing to hit production goals at Kovykta. He says: “If the members of the consortium are doing nothing to meet licence obligations, how much longer do we have to tolerate this?”

The attack follows threats by the Russian Ministry of Natural Resources to revoke TNK-BP’s licence at the $20 billion gasfield. TNK-BP claim the target of 9 billion cubic meters a year is impossible to meet without an export deal, which Gazprom has to sanction.

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