International Partnership in Russia: Conclusions from the Oil and Gas Industry PDF
Preview International Partnership in Russia: Conclusions from the Oil and Gas Industry
International Partnership in Russia This page intentionally left blank International Partnership in Russia Conclusions from the Oil and Gas Industry James Henderson Alastair Ferguson © James Henderson and Alastair Ferguson 2014 Softcover reprint of the hardcover 1st edition 2014 978-1-137-35226-2 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6–10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2014 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan in the US is a division of St Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries ISBN 978-1-349-46914-7 ISBN 978-1-137-35227-9 (eBook) DOI 10.1057/9781137352279 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. A catalog record for this book is available from the Library of Congress. To my wife Liz and to my two children Abby and Alex, with much love and thanks for their support over the decade that it has taken to complete the work J.H. To Mashenka and Igor for your love, support and inspiration A.F. This page intentionally left blank Contents List of Figures x List of Tables xi Acknowledgements xii Note on Transliteration xv List of Abbreviations xvi Conversion Factors xviii Preface xix 1 The Turbulent History of Foreign Involvement in 1 the Russian Oil and Gas Industry Introduction 1 The Russian oil and gas industry in a global context 2 The Russian oil and gas industry from the 19thcentury until 1930 4 The Soviet era from 1930 to 1990: Development of the 8 Volga-Urals and West Siberia regions The oil industry after the collapse of the USSR 13 Rehabilitation and renewal from 2000 22 The role of foreign investors in the post-Soviet oil industry 34 Conclusions 58 2 A Review of Academic Theory on Joint Ventures, Partnership 61 and the Importance of Local Knowledge Introduction and synopsis 61 The eclectic paradigm as a framework for discussing FDI 63 The uniqueness of FDI in the natural resources sectors 70 Weak state environments and the importance of local knowledge 73 Local knowledge and the resource-based theory of the firm 81 Bargaining theory and joint ventures 96 Overall conclusions – Is this all relevant to Russia today? 107 Empirical research on the impact of local knowledge in a weak 112 institutional environment such as Russia 3 Joint Ventures from the 1990s 115 Introduction 115 Case study one 116 vii viii Contents Case study two 124 Case study three 131 Overall conclusions 138 4 The Key Drivers of Foreign Partner Success – A Quantitative 145 Analysis Introduction 145 The survey of joint ventures 146 The survey results – Initial findings 148 Foreign partner success and its key catalysts 167 Overall conclusions on the joint venture survey results 179 5 Experiences in the Putin Era 182 Introduction 182 The business environment 183 The competition for knowledge 188 Foreign partner strategies in a weak institutional environment 192 Conclusions 201 6 Reflections on Partnership at TNK-BP 206 Introduction 206 A brief history of TNK-BP 207 A conversation with Alastair Ferguson, former Head of Gas at 212 TNK-BP The commercial environment and local knowledge 214 The importance of learning 217 The shareholder disputes 227 Conclusions 234 7 Conclusions on a Strategy for Foreign Partners 239 Introduction 239 An analytical framework for thinking about the Russian business 241 environment A new model to describe relationships in a weak institutional 246 environment The importance of learning – A domestic partner objective 249 The importance of foreign partner acquisition of local knowledge 251 A model to describe foreign partner engagement strategies 254 A relationship map to underpin the engagement model 259 Conclusions on the 7R Engagement Model 270 The possible relevance of a corporate model in partnership 271 strategies Contents ix Final conclusions on partnership in a weak institutional 273 environment Last thought – Russia is not alone in having a weak state 275 environment Appendices 277 Notes 289 Bibliography 311 Index 321
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