Shifting Perceptions of Tyumen Oil Company
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Holmes Report

Shifting Perceptions of Tyumen Oil Company

When F-H was hired, Tyumen Oil was receiving minimal, but highly negative, attention from the U.S. government, multilateral lending institutions, financial analysts and the international press because of a dispute with a major Western oil company.

Paul Holmes

Fleishman-Hillard’s work on behalf of Russia’s Tyumen Oil Company deserves a Gold SABRE in the International category because we propelled an unknown and controversial Russian firm to international recognition as a respected global leader in its industry. When F-H was hired, Tyumen Oil was receiving minimal, but highly negative, attention from the U.S. government, multilateral lending institutions, financial analysts and the international press because of a dispute with a major Western oil company. F-H undertook a comprehensive strategic communications program that included international media outreach, third-party alliances and crisis management. We worked with Tyumen Oil’s executives to neutralize the negative attention while building the company’s reputation among potential international business partners, third-party endorsers and the media. 


When F-H was hired in the fall of 1999, Tyumen Oil was trying to obtain funding from the U.S. Export-Import Bank to rehabilitate a refinery and oil field in Russia. The company was also involved in an ownership dispute concerning a bankrupt Russian oil company partly owned by a large Western oil firm. Until we were hired, the Western oil firm had been successful in creating an extremely negative image of Tyumen Oil. Those negative views appeared in the press and were directed to members of Congress, the U.S. State Department and the White House.  The media coverage and other actions led to an initial rejection of loan guarantees from the Ex-Im Bank. F-H began positioning Tyumen Oil as a new kind of Russian business, which operated according to international business standards under Western-style management, despite the extremely complex and difficult issues facing Russian companies in the transition from a state-controlled to a market-controlled economy. We launched our communications plan by introducing the CEO—a Russian with U.S. citizenship and U.S. oil industry experience—to the Western press. We secured interviews of Tyumen Oil executives with major business and energy publications and broadcast outlets such as Reuters and Bloomberg Television. We took advantage of industry gatherings to continue positioning the CEO as a global thought leader for the oil industry. In the course of our campaign, we generated positive press coverage and built relationships that resulted in the telling of the true story behind the oil dispute, including the conclusion of a preliminary agreement among the parties to the dispute in December 1999. In March 2000, the State Department reversed itself and allowed the Ex-Im Bank to grant Tyumen Oil $500 million in loan guarantees, the largest ever to a Russian or Soviet company.


Fleishman-Hillard conducted research on Tyumen Oil in the fall of 1999 to determine how the company was perceived outside Russia. We found that many press reports referred to the company in negative terms, such as “run by bandits,” a “shady Russian oil firm,” and an example of why Western investors should think twice about entering Russia. Most of the reporters covering Tyumen Oil knew little about the company, however, and F-H took every opportunity to introduce them to the facts of the dispute and the real Tyumen Oil. Research of potential media targets to ensure the delicate mix of visibility and credibility was conducted.


F-H faced many challenges over the year in repositioning Tyumen Oil as a global oil company. Implementing the strategic communications plan involved educating reporters about the Russian oil industry, introducing Tyumen Oil’s executive team, revamping the company's PR department to meet Western standards, and, most importantly, countering negative perceptions. Our strategy to counter the perception of a Russian company was to portray it as a Western-run company headquartered in Moscow. This was accomplished by encouraging Tyumen Oil to be more open and transparent in both its communications and business. We also had to distance Tyumen Oil from other Russian businesses and their negative press. We highlighted Tyumen Oil’s international approach to business and management and directly addressed the concerns of potential Western investors. We took every opportunity to present Tyumen Oil as a well-run, credible business partner and to promote its business strategy. We also took advantage of the company’s ranking in the international oil market to promote it as one of the world’s top oil companies. We used its top executives to comment on international developments and positioned them as thought leaders. We worked with Tyumen Oil’s Western business partners when media opportunities could be created.  Finally, we spent considerable time building relationships with key reporters. 


F-H held press briefings in Washington, New York and Houston, scheduled one-on-one interviews with key trade and local industry sector reporters and publicized all positive news from the company. F-H also assisted Tyumen Oil in reaching out to potential Western business partners, held press conferences to promote joint ventures with partners, wrote speeches for industry gatherings for top executives, and issued press releases globally on oil discoveries, operational improvements and corporate acquisitions. When the State Department and Ex-Im reversed themselves and granted Tyumen Oil the loan guarantees, we held a major press conference in Washington with the company’s new Western business partners, including then-CEO Dick Cheney of Halliburton Co and the Russian Ambassador to the U.S. F-H was also instrumental in getting Russian President Vladimir Putin to attend a signing ceremony in New York for one of the Ex-Im loans. Finally, F-H helped Tyumen Oil win several accolades over the past year, including being named the world's "Best Oil and Gas Company of 2000" by Financial Times Energy. 

Tyumen Oil has gone from being a little-known, but suspect, Russian oil company to being known as one of the world’s top 10 private oil companies, more visible and credible. The CEO, Simon Kukes, is now called upon to comment not just on his company’s performance and activities, but also on global oil prices, Russian business practices and international policies. Tyumen Oil is able to attract major Western partners, such as Halliburton, Texaco, Coca-Cola and W.R. Grace. In the past year, reporters have stopped referring to Tyumen Oil in the negative and now praise its management and communications. For example, The Economist said in its Dec. 4, 1999, issue that Tyumen Oil “is run by bandits” and Western investors should beware. One year later, in the Sept. 23, 2000, issue, The Economist called Tyumen Oil’s acquisition of another oil company, ONAKO, an example of the “best privatization in the country’s history” and the Dec. 9, 2000, issue said it was “Russia’s best-run oil company.” The company has also won numerous awards in the past year: Financial Times Energy’s world's "Best Oil and Gas Company of 2000," beating Shell Oil Company and British Gas; Russia's Kompaniya magazine’s "Best Fuel and Energy Company"; and the American Society for Competitiveness award for leadership in developing globally competitive practices in an emerging economy. The Moscow Times called the FT Energy award “a public relations coup.” CEO Simon Kukes was named one of Russia’s best business managers by Kompaniya magazine, and became one of the first Russians to serve on the board of a New York Stock Exchange-traded company, Parker Drilling; and also serves on the advisory board of the New York-based Foreign Policy Association. The company's CFO was named to the board of the Bank of Oklahoma, and the company's PR department, together with Fleishman-Hillard, won the "Silver Archer Award" for best corporate public relations given by the Russian Chamber of Commerce, Russian Union of Journalists and Russian Association for Public Relations.

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