Structural shifts in oil and gas industry: key factors, indicators, consequences

Abstract

The trend of combining competition and cooperation has ambiguous consequences for the traditional vertically integrated business organization, which has been the most important characteristic of leading corporate structures in the global economy for more than one hundred years. This article aims to define methodological principles at the heart of the integration mechanism for oil and gas companies, designed to ensure optimal combination of competition and cooperation by transforming existing forms of competitiveness. Using data from companies’ financial statements (annual consolidated financial statements from official websites and publicly available), the analysis focuses on structural shifts in the oil and gas industry within the context of a transition to organizational and legal forms of cooperation, which combine elements of competition and cooperation. The paper considers main factors and indicators that determine structural shifts in this industry. It also presents results of the analysis, showing activities of the largest foreign and Russian energy companies. We show that decisions regarding integration in the industry are based on companies’ cooperation in the process of building up oil and gas condensate reserves and resources, and developing and applying technologies to prioritize production, processing, and transportation of unconventional and traditional sources of hydrocarbons in the future. Refs 19. Tables 6.