OAO TNK is one of the 10 largest private oil and gas companies in the world in terms of proved oil reserves.
The company was established on 9 August 1995 as a state-owned Russian joint stock company with a view to its further privatisation. At that time, OAO TNK held 50.7% stakes of voting shares in several oil producing, distribution and service companies.
In 1997 TNK gains a strategic investor after the consortium of Alfa Group and the Access/Renova Group acquired through its subsidiary 40.0% of TNK's voting shares from the Russian Government in an investment tender.
A year later the new owners initiated an ambitious expansion strategy, acquiring an additional 10.0% of TNK shares from private shareholders and aiming at making TNK one of the fifteen largest oil companies in the world. The most pressing need was the centralisation of product and cash flows, reduction in production and refining costs and expansion of its retail network.
The scope of the challenge necessitated the creation of a new, highly qualified management team. The position of TNK's President was filled by Simon Kukes, whose 18 year experience in the oil business included holding senior positions at companies such as Phillips Petroleum and Amoco Oil. In addition, TNK's new management included several professionals with western business education and substantial work experience with some of the largest Russian and western companies.
Despite the severe financial crisis in Russia in 1998, by the end of the year, TNK managed to stabilise its oil production and more than doubled its oil refining. Furthermore, as a result of its strong debt repayment record, TNK became the first Russian company to receive significant financing from foreign banks.
In 1999 Alfa and Access/Renova acquired another 49.8% of OAO TNK voting shares at an investment tender held by the Russian Government. At the same time, TNK consolidated and expanded operations in its three core areas: production, refining and distribution. With an increase in exploration and incorporation of an oil-producing enterprise, TNK-Nyagan, TNK almost doubled its proved oil reserves to 7,429 Mn bbl.
At yearend, as a result of its vigorous expansion efforts, TNK became the 4th largest Russian oil company in terms of oil production.
During the year, TNK entered into a joint venture agreement with Texaco to produce lubricants.
In 2000, TNK made its first major investment outside Russia. TNK's subsidiary in Ukraine acquired 67.41% stake in LiNOS, one of Ukraine's largest and most modern oil refineries.
TNK acquired OAO ONAKO, Russia's then 12th largest oil company, with an annual oil production of about 160,000 bbl/day. This acquisition allowed TNK to enlarge its oil reserves as well as its refining and distribution base.
The number of TNK gas stations increased by 50% and reached 857 outlets.
TNK and Texaco signed a Memorandum of Understanding with the intention of building and operating Texaco Star Mart convenience stores, in conjunction with TNK service stations, in the greater Moscow and Kiev areas.
Under US Ex-Im Bank guarantees TNK received over $500 million dollars in loans. At that time, this transaction was one of the largest debt transactions in corporate Russia.
In 2000 TNK was recognised as the World's Best Oil and Gas Company by The Financial Times Energy, becoming the first Russian company to win this award.
In 2001, the company underwent a comprehensive reorganisation and restructuring program involving the reorganisation of its shareholders' ownership structure, consolidation of its major upstream subsidiaries, and the foundation of TNK International as a holding company for TNK and other companies.
As a result of the restructuring program, TNK International became the owner of 97% of the issued share capital of OAO TNK.
The same year, TNK shareholders acquired an 84% stake in OAO Sidanco, Russia's 7th largest oil company in oil reserves and production.
In February 2003, a new page in history of TNK was turned when one of the world's largest oil companies, British Petroleum, and Alfa Group in cooperation with Access/Renova Holdings announced the formation of a strategic partnership and their intention to unite their oil assets in Russia and Ukraine.
The new holding company TNK - BP started its activities on September 1, 2003 and will be the third largest Russian oil company in terms of its reserves and production volumes.
Related links: TNK-BP home page