Internationalization:

Country

Syria

Year of entry

2010

Industry/ business area

Crude oil production

Entry mode

For the first time Tatneft started crude oil production abroad.

Al Bou Kamal Petroleum Company, a joint venture between TATNEFT and the Syrian state-owned General Petroleum Corporation of Syria, established on a parity basis, started crude oil production from the South Kishma oil field in the Syrian Arab Republic on April 7 2010.

Motives

The Company made a new significant step in expanding the resource base of the Company and enhancing its credibility not only the Republic of Tatarstan, but also in the Russian Federation.

Firm specific advantages used on the foreign market

TATNEFT was the first Russian company to win an open international tender and conclude a Production Sharing (PSA) Oil and Gas Exploration and Production Agreement in Syria in 2003.

High professionalism and responsibility of TATNEFT's professionals is well known to the Syrian oil industry since the days of the former Soviet Union, when the Company's employees used to work on foreign missions in the Middle East.

First mover or follower

First mover

Type of state involvement in the process of internationalization

The Syrian government is involved in the process, since the Syrian company is state-owned.

Evaluation of the success of the internationalization

Temporary failure due to political situation in Syria:

Tatneft has halted work in Syria over instability in the Middle Eastern state, where other foreign oil companies including Shell have also stopped operating due to EU sanctions. General Petroleum Corporation, which is on an EU blacklist under a sanctions regime aimed at isolating President Bashar Assad.

Country

Germany

Year of entry

2010

Industry/ business area

Gas export

Entry mode

In August 2012 Novatek announced it had signed a 10-year contract with EnBW for the supply of about 2 billion cubic meters (bcm) of gas a year. EnBW said it would spend about 600 million euros over 10 years for gas under the new contract.

EnBW Energie Baden-Württemberg AG is one of the largest energy companies in Germany with revenues totaling 18 billion euro in 2011 and some 20,000 employees.

Novatek had been barred from the European gas market as the state gas producer Gazprom has enjoyed a monopoly on gas exports since2006. Novatek reportedly sells gas to the European clients through Swiss trader Novatek Gas&Power. 

Motives

The company wants to expand to Germany and Europe in general because of the promising market and the increasing demand for energy, since the german government announced to reduce the amount of nuclear power plants.

Firm specific advantages used on the foreign market

It is one of the biggest independent oil & gas companies in Russia

Negotiations with the government about the permission of exporting independently (Gazprom became an official monopol for exporting in Europe!) Novatek would be the first company after Gazprom with that certification.

First mover or follower

Follower

Type of state involvement in the process of internationalization

Even though Novatek is an independent company, it cooperates with the government – The permission to export to Europe would be a big competitive advantage for the company, granted by the government

Evaluation of the success of the internationalization

Due to the fact that the company is still at the very beginning of its export to Germany, we yet can’t tell if the internalization was a success. As German partner is strong, we can assume that the cooperation will be highly profitable.