Subject category:
Entrepreneurship
Published by:
Babson College
Version: 08.05.02
Length: 25 pages
Data source: Field research
Topics:
Oil; Gas; Kazakhstan; Caspian Sea; Russia; Chevron; Political instability; Middle East; Mature company
Abstract
Kazakhstan declared independence from the former Soviet Union in 1991. Since then it has been involved with Chevron Corporation in the development of oil in the Caspian Sea. There are competing claims to these oil reserves by other countries that border the Caspian such as Russia, Iran, Azerbaijan and Turkmenistan. These oil and gas reserves are substantial and have attracted the interest of most world economic and political powers because of their potential strategic importance. Chevron is faced with a major decision: whether to make a further significant investment ($1 billion) in the oil fields by buying out the equity position the government of Kazakhstan holds in the fields. This decision is compounded by factors external and internal to the government. For example, externally, Kazakhstan''s neighbours have not agreed to who has legitimate claims to which parts of the Caspian (in fact part of the debate revolves around whether the Caspian is a sea or a lake: it makes a significant difference in international law). Also, domestically, there are Kazakhs who disagree with the government''s decision to disinvest and domestic violence is a real possibility. The teaching note includes strategies for case presentation, key concepts, updates, solutions to the assignment questions and suggestions for the most effective ways to work this case into a course.
About
Abstract
Kazakhstan declared independence from the former Soviet Union in 1991. Since then it has been involved with Chevron Corporation in the development of oil in the Caspian Sea. There are competing claims to these oil reserves by other countries that border the Caspian such as Russia, Iran, Azerbaijan and Turkmenistan. These oil and gas reserves are substantial and have attracted the interest of most world economic and political powers because of their potential strategic importance. Chevron is faced with a major decision: whether to make a further significant investment ($1 billion) in the oil fields by buying out the equity position the government of Kazakhstan holds in the fields. This decision is compounded by factors external and internal to the government. For example, externally, Kazakhstan''s neighbours have not agreed to who has legitimate claims to which parts of the Caspian (in fact part of the debate revolves around whether the Caspian is a sea or a lake: it makes a significant difference in international law). Also, domestically, there are Kazakhs who disagree with the government''s decision to disinvest and domestic violence is a real possibility. The teaching note includes strategies for case presentation, key concepts, updates, solutions to the assignment questions and suggestions for the most effective ways to work this case into a course.