National and International Oil Companies Essay Example | Topics and Well Written Essays - 3000 words

National and International Oil Companies - Essay Example The formation of joint ventures to explore oil has always defied all odds because the partnerships are formed across boundaries despite the parties coming from a different geo-political background. For instance, it was quite astonishing that BP formed a joint venture with the Rosneft, a Kremlin based Oil Company (Chzan, 2013). The joint venture was formed to explore the complex oil reserves of Russia thus there was a chance for BP to renew its investments in Russia despite the Sanctions that Moscow had been facing from the West. The joint venture was formed despite the sanctions against the annexation of Crimea but the CEO of BP, Bod Dudley, maintained that the sanctions could not affect investments (BBC NEWS, 2011). Therefore, the two oil giants teamed up to explore resource in central Russia. According to the provisions of the terms of the joint venture, BP was supposed to own 49% of the joint venture while Rosneft was to own 51%. In this case, there was a 4.9 billion share between the two companies (Chzan, 2013). The joint venture is a collaboration between an international private oil company and a national oil company (Brinded, 2010). BP stands in the history as a major oil explorer worldwide whose ownership was privatised or acquired from the government and since then, it has seen tremendous growth in different areas in the world. On the contrary, Rosneft is a Russian National Oil Company and has also been a major player in oil exploration. There are increasing concerns over the fast depleting oil reserves.