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National and International Oil Companies Essay Example

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National and International Oil Companies

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National and International Oil Companies. For instance, it was quite astonishing that BP formed a joint venture with the Rosneft, a Kremlin based Oil Company (Chzan, 2013). The joint venture was formed to explore the complex oil reserves of Russia thus there was a chance for BP to renew its investments in Russia despite the Sanctions that Moscow had been facing from the West. The joint venture was formed despite the sanctions against the annexation of Crimea but the CEO of BP, Bod Dudley, maintained that the sanctions could not affect investments (BBC NEWS, 2011). Therefore, the two oil giants teamed up to explore resource in central Russia. According to the provisions of the terms of the joint venture, BP was supposed to own 49% of the joint venture while Rosneft was to own 51%.

In this case, there was a 4.9 billion share between the two companies (Chzan, 2013).The joint venture is a collaboration between an international private oil company and a national oil company (Brinded, 2010). BP stands in the history as a major oil explorer worldwide whose ownership was privatised or acquired from the government and since then, it has seen tremendous growth in different areas in the world. On the contrary, Rosneft is a Russian National Oil Company and has also been a major player in oil exploration. In this case, the joint venture offers the opportunity to understand some of the benefits that government and private firm joint ventures provide as well as some of the considerations before settling for the investments including potential issues, challenges, and drivers for such particular ventures (Penttila, 2005).The particular joint venture is also important because both the governments and private firms inject different forms of investment into the exploration business (Brinded, 2010). On the other hand, such ventures require high capital investments thus the need for the government-private firm partnership where the government provides the necessary resources while the private company offers the expertise to explore the oil resources (Grant, 2012). In the case of BP- Rosneft joint venture, the Russian government provides the necessary resources for exploring the oil while British Petroleum provides the highly qualified professionals as well as the modest technology of mining oil (Chzan, 2013).There are increasing concerns over the fast depleting oil reserves that have called for attention to come up with ways to strategically manage the. National and International Oil Companies.

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