BP - John Browne Bets on Asia: The Strategic Logic
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Code : COM0095
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Region : Asia
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Introduction:Over the years, global oil companies like BP, ExxonMobil, Royal Dutch Shell and Chevron have been in negotiations with China's three state-controlled oil groups PetroChina, CNOOC and Sinopec. Their goal was to secure as much access as possible to the fast-expanding Chinese market, whose demand for energy is expected to rise exponentially in the coming years. In spite of several attempts by BP, ExxonMobil and Royal Dutch Shell, none of the overseas oil groups have been granted significant access to the domestic oil industry especially in the upstream sector. In October 2005, BP executives confirmed that extensive top-level talks have been going on for some time with Sinopec. On the other hand, BP signed an agreement with Hindustan Petroleum Corporation to form a refining and marketing joint venture, to tap India's growing market. But both the countries' international oil policy has been a bone of contention, as energy needs and control over energy supplies were central to the strategic calculations of all themajor powers. Analystswere skeptical about the returns BP could generate from the investments in downstream sectors in these Asian markets. |
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