This paper addresses the dynamics of energy development projects. Nationalization has repeatedly squandered the economic, physical and mental resources of large joint-ventures between multinational oil companies, and developing countries. A deteriorating relationship between multinational oil (MNOC) management and regional hosts consistently leads to nationalization. This cultural gulf between corporation and regional host, while existent in many regions is most significant in high conflict areas, which is why petroleum managers, with most of their experience in low conflict areas, have mostly ignored and cultural gulf. To form strong relationships that bridge the cultural gulf requires cultural sensitivity. Neighbor conflict studies show this problem to be most prevalent in developing countries, but also existent in emerging areas such as offshore California, Florida and Alaska. The proposed microworld trains first world petroleum managers, through cause-effect analysis, that while cultural-sensitivity to the developing country's need increases marginal costs, it's lower the probability of nationalization, generating positive project economics and raising expected payouts from extended project life.

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Date created

• 1994

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• Document

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• Processing documentation available at: https://wiki.albany.edu/display/SCA/Processing+Ingested+Digital+Files

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• Creative Commons BY-NC-ND Attribution-NonCommercial-NoDerivs 4.0 International

  
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fe35db792b573af835d96e6eba4759cd

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c060552994c1527f70693734935660f1

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Collection

System Dynamic Society Records

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• This collection is part of the University Archives