CHAPTER 6Collaborative Operating Models

Joint ventures (JVs) were once the domain of international market entry—a necessary evil to comply with restrictions on foreign ownership. They also afforded access to local expertise and enabled companies to effectively “trial” foreign market entry with a smaller commitment of resources and a natural exit option in case the trial failed. But the nature of JVs has changed. A surge in collaborative deals has afforded access or scale in positional assets (e.g., resources, production facilities, etc.) and organizational capabilities and technologies. The nature of business opportunity has grown in complexity and uncertainty and now evolves at a greater pace, making it increasingly difficult to “go it alone.” JVs have also long been popular for large capital projects. State‐owned enterprises often collaborate in their quest for knowledge transfer and capability building. IOCs and NOCs collaborate with independents for access to attractive reserves. Oil and gas companies have turned to JVs as part of a broader strategy as their portfolios include more regions and resource types, including unconventionals, oil sands, coal bed methane, and more (Figure 6.1).

JV success is as much about creating an attractive opportunity as it is about finding an attractive opportunity. While resource assessment and partner attractiveness are important, the opportunity for value creation is equally dependent on deal design, design of the operating model, and implementation. ...

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