Managing geopolitical risks: the global oil and gas industry plays a winning game
ISSN: 0275-6668
Article publication date: 28 June 2023
Issue publication date: 26 March 2024
Abstract
Purpose
Geopolitical risks associated with the return of great power politics and growing nationalism have generated new challenges for foreign investors across industries. Oil and gas companies are well acquainted with such risks and have developed strategies to manage them. This paper reviews five of these strategies: divorcing ownership control from operating control in designing collaborative ventures; proactively managing stakeholder relationships; ensuring transparency and communication; diversifying risks while proactively positioning for emerging opportunities; and deliberately planning for exit should such an eventuality arise. Firms outside of oil and gas can draw on these strategies as they navigate the emerging geopolitical context.
Design/methodology/approach
This paper reviews five strategies that oil and gas companies can use to manage geopolitical risk: divorcing ownership control from operating control in designing collaborative ventures; proactively managing stakeholder relationships; ensuring transparency and communication; diversifying risks while proactively positioning for emerging opportunities; and deliberately planning for exit should such an eventuality arise.
Findings
This study identifies several strategies that oil and gas companies have used to manage geopolitical risks. These tools will be increasingly important in the shifting global political landscape.
Originality/value
Drawing on the experiences of oil and gas companies, this study has identified several strategies that companies can use to shield themselves from the risks that are currently emanating from geopolitics. While these best practices originate in the experiences of oil and gas firms, the ability to deftly manage geopolitical risks is becoming an important prerequisite for companies across industries.
Keywords
Citation
Gamso, J., Inkpen, A. and Ramaswamy, K. (2024), "Managing geopolitical risks: the global oil and gas industry plays a winning game", Journal of Business Strategy, Vol. 45 No. 3, pp. 190-198. https://doi.org/10.1108/JBS-04-2023-0081
Publisher
:Emerald Publishing Limited
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