????BP also commissioned at least three background checks into TNK prior to forming the joint venture. The results: worrisome descriptions of TNK's management and owners, Access-Renova and Alfa Group (AAR). A 2001 report noted that Alfa had close ties with the Russian government and was one of the most influential financial-industrial groups in the country. Alfa Group co-founder German Khan, who is currently the executive director of TNK-BP, was described as "explosive" in a 1999 internal BP report and "notorious" in an email written by a BP executive in 2002.
????But TNK's power within Russia also made the company an extremely compelling partner. According to a BP report, also from 1999, TNK was pressuring BP to reach some sort of compromise over the Chernogorneft matter. The report says that a high level TNK executive suggested "that BP Amoco - TNK should buy and operate Chernogorneft as a separate alliance company." BP officials distanced themselves from Norex in 2002, when Norex sued TNK over Yugraneft. "While our history is intertwined with the events that befell Norex, we long ago parted company on the road to where we find ourselves to-day," wrote BP official Sam Bennett, in an email dated February 27, 2002. Bennett had worked at Sidanco. "Our official response should be that this is nothing to do with us."
????In the end, BP decided to partner with TNK and hope for the best. In February 2003, BP announced the 50-50 joint venture (which would absorb, among other things, Sidanco's assets), and said that it would put $6.5 billion into the partnership. (The deal also included a provision indemnifying BP from any losses, claims or demands of any nature that might arise from TNK's dispute with Norex, according to an internal BP document.)
????Lord Browne, then CEO of BP, called the deal "a major strategic step into a country with massive oil and gas reserves and immense potential for future growth." Brown went on to say: "BP entered Russia five years ago when we bought 10% of Sidanco. We had a tough time initially… and learned a great deal about doing business in Russia."
????Oppenheimer analyst Fadel Gheit has no doubt that BP knew that it was courting trouble when it formed the joint venture with TNK. Gheit says that he saw Alpha co-founder Mikhail Friedman arrive at a meeting for the deal with four bodyguards carrying machine guns. "It was the most ridiculous scene that I've ever witnessed," he says. "Investment meetings with people carrying machine guns?"
