International Partnership in Russia: Conclusions from the Oil and Gas Industry

351 Pages·2014·1.895 MB·English

by  James Henderson, Alastair Ferguson (auth.)

International Partnership in Russia
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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
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as the authors of this work in accordance with the Copyright, Designs
and Patents Act 1988.
First published 2014 by
PALGRAVE MACMILLAN
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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
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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
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A catalogue record for this book is available from the British Library.
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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.
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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