The future of international oil and gas extraction firms: The drill into competition and internationalization strategies
Author
de Raad, Joek
Term
4. Term
Publication year
2014
Submitted on
2014-06-05
Pages
92
Abstract
The thesis examines how international oil and gas firms’ (IOCs) internationalization and competitive strategies are shaped by the growing control of natural resources by state-owned national oil companies (NOCs). Adopting a situationalist methodology that blends objectivist and subjectivist perspectives via Abnor & Bjerke’s systems approach, the study builds a theoretical framework around the LLL (Link, Leverage, Learn) perspective, Dunning’s OLI paradigm (ownership, location and internalization advantages), classic entry modes (export, licensing, equity joint venture, wholly owned subsidiary), and Porter’s Five Forces. Using a case study of Royal Dutch Shell and three projects (Iraq, Nigeria, Malaysia), the analysis finds repeated use of LLL logic in internationalization and a predominant choice of wholly owned subsidiaries, consistent with OLI advantages. Porter’s analysis indicates high bargaining power among both suppliers and buyers, with the other forces less threatening. Accordingly, the thesis recommends sustained R&D investment to strengthen industry position, a focus on new offshore and deepwater projects where full control without NOC involvement is more likely, and continued consideration of projects in politically unstable territories as an alternative. It proposes an iterative strategy: reassess industry forces, search globally for drilling opportunities (LLL), select entry mode (OLI), secure rights and internationalize, drill while building capabilities, and exit upon depletion; if threats and counterpart power rise alongside resource scarcity, increase investment in alternative energy sources.
Specialet undersøger, hvordan internationale olie- og gasfirmaers (IOCs) beslutninger om internationalisering og konkurrencestrategi påvirkes af den voksende kontrol med naturressourcer hos statsejede selskaber (NOCs). Med en situationalistisk metodisk tilgang, der kombinerer objektivisme og subjektivisme via Abnor & Bjerkes systemtilgang, opbygger studiet en teoretisk ramme baseret på LLL-teorien (Link, Leverage, Learn), Dunning’s OLI-paradigme (ejerskabs-, lokaliserings- og internaliseringsfordele), klassiske indgangsstrategier (eksport, licens, joint venture, helejede datterselskaber) samt Porters five forces. Gennem et casestudie af Royal Dutch Shell og tre projekter (Irak, Nigeria, Malaysia) identificeres, at Shell gentagne gange anvender LLL-logikker i internationalisering og overvejende vælger helejede datterselskaber som indgangsform, begrundet med OLI-fordele. Porters analyse peger på høj forhandlingsmagt hos både leverandører og kunder, mens øvrige kræfter vurderes mindre truende. På den baggrund anbefales Shell at styrke sin position gennem løbende FoU-investeringer, prioritere nye offshore- og dybhavsprojekter, hvor sandsynligheden for fuld kontrol uden NOC-indblanding er større, samt fortsat vurdere projekter i politisk ustabile områder som alternativ. En iterativ strategi foreslås: gentagen vurdering af industriens kræfter, global søgning efter boringsmuligheder (LLL), valg af indgangsform (OLI), opnåelse af rettigheder, drift og kapacitetsopbygning samt udfasning ved udtømning. Hvis trusler og modparters forhandlingskraft bliver for høje, kombineret med øget ressourceknaphed, bør virksomheden trappe op i investeringer i alternative energikilder.
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