- •International business strategy How political connections of Russian firms influence their international activities
- •Internationalization:
- •Internationalization:
- •Internationalization:
- •Internationalization:
- •Internationalization:
- •Internationalization:
- •Internationalization:
- •Internationalization:
- •Internationalization:
- •Internationalization:
Internationalization:
Country |
North America |
Year of entry |
2000 |
Industry/ business area |
Oil & gas |
Entry mode |
LUKOIL entered the United States market in 2000 when it purchased New York-based Getty Petroleum Marketing Inc. and its network of Getty-branded stations on the East Coast. The first LUKOIL-branded service station in the United States opened in September 2003. In 2004, LUKOIL purchased a major portfolio of Mobil-branded stations from ConocoPhillips Company in New Jersey and Pennsylvania, many of which subsequently became LUKOIL-branded service stations. So they entered the market via brownfield investment. LUKOIL North America LLC began operations in 2009. In 2011, as a result of portfolio optimization, the Getty network was sold. Today, there are over 500 LUKOIL-branded service stations serving customers across Northeastern and Mid-Atlantic United States.
|
Motives |
Lukoil, which was already operating in Europe, CIS and Baltic countries as well, decided to enter the US because of the high demand of petroleum, especially in transportation sector. Through the acquisition of Getty Petroleum Marketing Inc. a quit market entry was possible and a relatively wide network of Lukoil gas stations was created. Furthermore, the American Market is less risky than other alternatives in terms of entrance barriers, government or uncertainties like economical prospects.
|
Firm specific advantages used on the foreign market |
LUKOIL’s current oil export terminal infrastructure includes the unique Varandey oil loading terminal located on the coast of the Barents Sea, equipped with an ice resistant loading sea terminal which is used for year-round deliveries of oil, produced locally by LUKOIL, for supply to export markets, notably the United States. |
First mover or follower |
Follower |
Type of state involvement in the process of internationalization |
The state subsidies the company among others in terms of lower taxes, even though it is a privately held company, grounded by the importance of the company for Russian economy as well as to grant Lukoil a competitive advantage over competitors from other states. |
Evaluation of the success of the internationalization |
The internationalization was a success, since the company managed to establish a wide network of profitable petroleum stations beneath a short time. |
ROSNEFT
OJSC ROSNEFTEGAZ holds 75.16% in ROSNEFT’s shares, whereby OJSC ROSNEFTEGAZ is in 100% federal ownership – So is Rosneft mainly in governments hands. The Russian Government’s direct share (through the Federal Agency for State Property Management) in Rosneft’s equity is 0.000000009%.
Rosneft sold 64.2 mln tonnes (469.7 mln barrels) of crude oil in 2011 (excluding swap operations), of which 0.3 mln tonnes (2.2 mln barrels) were sold on the domestic market and 63.9 mln tones (467.5 mln barrels) were exported. Export deliveries increased by 5.1% compared with 2010, which reflects growth of production and reduction of sales on the domestic market.
The Company exported 41.2 mln tonnes (301.1 mln barrels) of oil to Europe as well as 4.6 mln tonnes (33.7 mln barrels) to CIS countries. Deliveries to Asia-Pacific countries were 16.9 mln tonnes (123.6 mln barrels), which is 1.6 times more than in 2009.