- •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 |
Kazahstan |
Year of entry |
2006 |
Industry/ business area |
Oil extraction |
Entry mode |
Entry mode is FDI and the company acquired «Potential Oil» with 80% share that shows brownfield strategy. «Potential Oil» has average position on the market, but quite stable due to licenses’ possession on the particular geographical area. |
Motives |
Going to the market in Kazahstan Alliance Oil Company targeted at acquiring «Potential oil» and the latter already had a license on oil extraction in Beicadar, Atyrauskaya region till 2031. So they were quite sure in the international expansion with not that much risks involved. |
Firm specific advantages used on the foreign market |
Acquired company has long-run license on particular area |
First mover or follower |
Follower, «Potential oil» operates since 2001 |
Type of state involvement in the process of internationalization |
|
Evaluation of the success of the internationalization |
Overall internationalization is successful one. There are rather certain forecasts with current company’s growth. |
Itera
Internationalization:
It is one of the fewest private companies in the oil and gas industry, which also is placed as one of the leading corporations. Different projects also are done abroad, including Europe and the USA.
Country |
Turkmenistan |
Year of entry |
1991 |
Industry/ business area |
Prospecting for mineral deposits and development of oilfields |
Entry mode |
Entrance is done in the form of FDI – greenfield strategy. |
Motives |
Turkmenistan is the third country in the world after Russia and Iran on available gas resources, that is why Itera first of all considered this country in their international strategy. |
Firm specific advantages used on the foreign market |
Follower |
First mover or follower |
One of the first movers among all the international companies |
Type of state involvement in the process of internationalization |
|
Evaluation of the success of the internationalization |
Internationalization is a successful story for Itera. They already operates more than 20 years on the market of Turkmenistan and they know it very well from different perspectives. In the future Itera is waiting for further positive growth.
|
Conclusion
All the leading companies of the oil and gas industry in Russia were considered in this report and a number of findings were revealed.
Firstly, almost all of the oil and gas companies have close political connections, mainly from the perspective that they are owned by the Russian government.
Secondly, companies perform international strategy very broadly and make it as one of the priority both in the form of export and FDI.
Last but not the least, in spite the fact that this international expansion is commonly very successful, there may be some external shocks connected with the particular country’s internal difficulties or some international conflicts which hugely prevent company’s future growth.
All these points underpin the fact that political connections of companies in the oil and gas industry quite hugely influences their international performance and these relationships help corporations to expand further abroad. However foreign government may be an obstacle for further expansion and even simply operation.