TNK-BP Strategic and Financial objectives
TNK-BP's strategic objective was to "become a worldclass oil and gas group that is an industry leader in Russia, with a clear focus on the sustainability and renewal of its resources and the efficiency of its operations" The company was committed to being an integrated oil and gas company, but the partners were not in agreement as to the level of non-Russian growth. The company was also committed to growing its gas business and was involved in various different discussions with Gazprom.
The joint venture's financial objectives were as follows:
- To maintain a strong balance sheet providing flexibility, liquidity, and cost-effective borrowing.
- To target a gearing range of 25 to 35 percent (net debt/net debt + equity, U.S. GAAP basis).
- To maintain a conservative debt structure with a significant percentage of long-term debt.
- To maintain a dividend policy of at least 40 percent of net income.
- To attain an investment grade credit rating over time.
- To improve the timeliness and quality of financial reporting based on centralized financial management.
In 2008, TNK-BP accounted for about one-quarter of BP's total production, one-fifth of its reserves, and about one-tenth of net income.