lecture 3-3-08

lecture 3-3-08 - Legal system legal instability as well...

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Cassie Morgan Lecture Notes 3-03-08 The Global Marketplace LECTURE NOTES INDSUTRY: Limited supply Expensive $11-17 per barrel at time of case Price is inelastic change in demand will not change dramatically even though price continues to increase Increase supply leads to decrease price they want to control the supply, and thus control the price Big entry barriers good for keeping competitors away Buyer power positive Substitutes imperfect and few Rivalry positive Supplier power who has the oil? Russia. Dealing with countries who have the power. Petronationalism trying to reduce this idea COUNTRY: RUSSIA Seizing asset risk Lots of oil overestablished, quality, Venezuela, Hierarchy the more levels you have, the more opportunities there are for corruption Inefficient production is actually down Poor practices not sustainable, if other companies get in to Russia they can make a lot of money Politics unstable Chubais sells for less than what they are worth
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Unformatted text preview: Legal system legal instability as well Economics instability as well COMPANY: Phibro American company going into Russia, not actually an oil company-production sharing agreement- fields are in poor condition only info they have about the quality of the fields is given to them from the Russian government- Russian government taxes them Eni Italian company Conoco they did their own field tests (due diligence)-find new, untouched territory-they control the whole supply chain-FDI as control-EBRD used this to help fund-World Bank used this to help fund Mobil no go-biggest company in the oil industry-did not enter Russia at the time, but are presently in Russia o Sakaline I, furthest any oil company has gone to drill for oil o Sakaline II (SHELL) KASHAGASN OIL FIELD-most difficult place to drill for oil-located in the Caspian sea o sea is frozen for most of the year...
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This note was uploaded on 04/07/2008 for the course IBUS 200 taught by Professor Elms during the Spring '08 term at American.

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lecture 3-3-08 - Legal system legal instability as well...

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