BP is a global oil and gas ‘supermajor’, with integrated businesses consisting of upstream and downstream activities. One of its downstream businesses, BP Europa SE, has consolidated operations in Germany and seven other countries. Within that, the German Ruhr Oel GmbH (ROG) handled a major portion of BP’s crude oil refining activities in Germany. ROG was a 50:50 Joint Venture between BP and Rosneft, a majority state-owned Russian oil company. The JV consisted of the refinery in Gelsenkirchen and had shares in refineries in MiRO, PCK and Bayernoil as well as other assets.

Défis du client

After much deliberation, BP and Rosneft concluded their strategic objectives had altered and that the time was ripe for dissolving their ROG Joint Venture: comprising the Gelsenkirchen refinery, shares in the MiRo, PCK, and Bayernoil refineries, along with other assets. This also meant assisting the JV partner, Rosneft, in establishing its own refining business within Germany.

From the outset, the enormity of the undertaking was evident to BP’s leadership. After all, this was a JV with assets priced in the ten figures, whose area of authority straddled multiple countries across a highly diverse refinery landscape. The split and restructuring would encompass everything from contract management, to defining future cooperation terms, to assessing the impacts on business processes and the organization as a whole.

But the real secret to unbraiding the two companies’ arrangements, BP recognized, was its people. Uppermost in its concerns was to try to smooth the transition for its 300 project participants, who would be asked to change their work practices to optimize workflows and align with the new systems.

Against this backdrop, BP’s leaders discussed at length the best way to execute such a big decoupling and chart a way forward for BP and its partners.

Contribution de BearingPoint

BP’s senior leaders hatched the Transigo project to complete the JV demerger. This involved a governance process for decision-making, risk and impact assessments, monitoring, as well as the timely progression of the demerger.

Working side-by-side with BP’s Project Leadership and Central Project Management Office, BearingPoint was engaged to support the various work streams as the three phases of the demerger unfolded.

During the negotiation phase:

  • The team analyzed work stream input to provide recommendations and decision-making support to project leaders
  • An assumption process was designed to oversee uncertain elements in the project
  • By organizing and rigorously documenting due diligence, including coordination of Q&A rounds, a timely signing was secured.

For the implementation and transition phases:

  • In supporting the internal work streams and coordinating teams with the JVpartner, we helped with aligning amendments to contracts and term sheets, as well as fostering communications internally, externally, and with JV counterparts.
  • To leave nothing to chance, control processes were established, including the transfer of data to the strategic partner.
  • We facilitated Management of Change processes and handover activities.
  • Rosneft also tapped our knowledge of the general project work in its quest to found its own refining business in the German market– a first for the company.
  • By the conclusion of the phase, the teams within BP had successfully split away the company that was responsible for operating the JV.

Having geared up to move to the cutover and early life support phase, post-dissolution, the teams were well-positioned to monitor operational continuity and integrity.

Wolfgang Langhoff

The dissolution of this longstanding and large scale Joint Venture bears challenges in itself, but here further solutions were requested with respect to cultural, statutory and compliance aspects across the entire project management regarding the portfolio separation.

Wolfgang Langhoff, Chairman of the Executive Board, BP Europa SE

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Résultats du client

The JV was dissolved in excellent time, during which 20% of the handling of the German refining volume was changed. “Business as usual after such a short time was never expected”, said Markus Krieger, Head of Project Delivery R&M IT&S FVC Europe & Africa, BP.

With the JV restructure, BP consolidated 100% of the equity of both the Gelsenkirchen refinery and the solvents production facility DHC Solvent Chemie. In exchange, Rosneft became a direct holder and increased its shareholding in the Bayernoil refinery from 12.5% to 25%; the MiRO refinery from 12% to 24%; and the PCK refinery from 35.42% to 54.17%.

Ultimately, BP’s operations in Germany have been simplified, resulting in streamlined processes and enabling the implementation of the Downstream strategy.

BearingPoint’s facilitation of the associated document management assisted with the due diligence. Before deal completion, major steps were taken to reorganize BP operations through the implementation of a tailored assumption process. Indeed, good assumption modelling and preparation led to a successful go-decision on Oct 31st, supporting the timely completion of the JV demerger on Dec 31st, 2016. In all, excellent preparation and cross-work stream alignment ensured no disruptions occurred and contained the error rate, with reports of only low and medium incidents. An internal audit, embedded at every checkpoint, also reported a smooth process.

Today, BP is on a sound footing for the future.

  • Managing a substantial Joint Venture demerger in Germany’s refinery landscape 233.94 KB Download

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