Making business less risky : the benefits of business interrelationships

The importance of business interrelationships for the success of the capital intensive and inherently risky petroleum industry was discussed. The major types of interrelationships include: (1) joint interest/ownership, (2) joint ventures, (3) production sharing contracts, and (4) strategic alliances. The makings of a successful and unsuccessful business relationship were also described. Examples of successful joint ventures, (Syncrude with Athabasca Oil Trust), joint ownerships (Gulf Oil with IPL), strategic alliances (Northrock Resources), and production sharing contracts (Gulf Oil with Talisman and Pertamina) were outlined by way of illustration. A failed joint venture between Gulf Oil, British Gas and Komineft to revitalize production and exploration in the Komi Republic (formerly part of the USSR) was also cited as an example of a situation where unsteady operational and political environments combined to bring about the failure of the project