Oil Case

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Oil Case

  1. 1. Group 2 Camille Taper, Bryan Ratajczyk,Marc DiVall, Vincent Vanden Borre
  2. 2. Summary• In order to access new sources of oil in deep seas and arctic regions extremely large amounts of capital are required for R&D and for the actual extraction process• The only way for these companies to do this is to merge…• The text also describes numbers in tables to support these mergers
  3. 3. Question 1: Are companies such as Exxon Mobile, BP Amoco, andRoyal Dutch/shell MNEs? What criteria do they meet that makes them MNEs?• First of all, yes they are, simply because the case study states in the table at the bottom the Rankings of oil MNEs… • MNEs are as defined: “controls and operates business establishments in at least two countries.”• foreign direct investment flow• International Labour Organization (ILO) defines it as country can promote social and economic welfare, improve living standards, and foster such human rights as freedom of association.• Wikipedia defines it as: is a enterprise that manages production or delivers services in more than one country.• By these definitions, all three companies stated above fall into the criteria of an MNE.
  4. 4. Question 2: how important is an understanding ofgovernmental regulation to success in this industry?• It is very important for oil companies to understand the government regulations, there are factors such as: – Drilling for oil – International Borders – Regulations for building (international) pipelines – environmental
  5. 5. Question 3: In terms of Porter’s determinants of national competitive advantage, which one of these fourdeterminants is most important for these oil companies? Why?• Porter’s Four determinants of National Competitive Advantage are: – Factor Conditions – Strategy, structure and rivalry – Demand conditions – Related and supporting industries• We believe that the most important of the four is “Factor Conditions”  LLC – Because first of all, we need the space (cannot be moved, we need to go to the oil fields), the money to build pipelines and machinery, and obviously you need national labour that will go into the Arctic…)

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