Policy Memos

The Domestic Limits of International Expansion: Russian National Oil Companies & Global Markets

Policy Memo:

238

Publication Date:

09-2012

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Gazprom and, more recently, Rosneft have both expanded their operations abroad, seeking to establish themselves as major players on the international petroleum market. Most commentators have portrayed this expansion as an orchestrated power grab to dominate global gas and oil markets, particularly in the European context, and an inevitable consequence of Russia’s increasingly centralized authoritarian rule. It would be more instructive, however, to consider it as part of a global trend.

Over roughly the past three decades, but especially since the beginning of the 1990s, emerging country national oil companies (NOCs) have increasingly sought to internationalize their operations. In other words, like all multinational corporations (MNCs), they are pursuing investment, production, and employment in multiple countries and regions around the world. More specifically, NOCs seeking to internationalize are trying to become international oil companies (IOCs); that is, to expand their assets and operations abroad to include exploration, production, refining, marketing, and distribution. This ambition to internationalize has been realized with differing degrees of success. [...]

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Professor of Political Science, Director, Islamic Studies Program
University of Michigan