British Petroleum in Russia

Partnership between British Petroleum and Rosneft as well as that between British Petroleum and Alpha Access Renova both in the Russian oil market have the potential of resulting in great impact in the market. From the point of initiation in 2011, the partnership with Rosneft has experienced various setbacks based on different reasons (Alobaid, 2011). First, the deal meant for developing oil and gas reserves within the Arctic region failed due to court cases filed by Alpha Access to prevent the deal from taking off.

The rationale behind Alpha’s destruction of the deal was that the first partnership had been between BP and Alpha Access and thus any both partners had to be given an opportunity to consider any future alliances in order to effectively decide whether or not to continue with the existing alliance. In this case, Alpha Access ad expected to be informed of the impending deal between BP and Rosneft in order to decide whether to stay in alliance with BP or to leave. The courts decided that Alpha Access had a point of argument leading to the temporary stoppage of the alliance between BP and Rosneft.

For companies intending to enter into alliances, it is necessary that certain conditions be fulfilled so as to make the alliances successful. First, both companies should consolidate critical relationships with suppliers, providers and other important companies. Without this, alliances may fail. Moreover, alliances may also fail due to poor management of essential partnerships. This can be linked directly to the case of BP and Rosneft (Alobaid, 2011).

Even though BP had maintained various other relationships successfully, building of a successful alliance with Rosneft failed due to lack of proper management of the alliance with Alpha Access. Despite this challenge, it is still possible for BP and other companies to revive alliances resulting in advantages such as improved value, attraction of stakeholders and increasing competitiveness.

References

Alobaid, M. (2011). BP in Russia: Bad Partners or Bad Partnership. University of Virginia, Darden Business Publishing.

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