Abstract
Technology and financial instruments have become very important in setting new investment standards. Technology, as it has been developed in exploration, production and processing since 1973, has served as a major cost-cutting device for international oil companies. Moreover, the new technologies have also provided the companies with alternative sources of crude, because deposits that were formerly uneconomic could be brought on stream. Particularly the developments in offshore and (semi-)arctic environments, such as the North Sea and Alaska, have turned out to be a large source of ingenious human capital and engineering innovations. The learning curve (through learning-by-doing) has been steep. These new technologies have created a new competitive edge for those international companies that have dared to venture into these high-risk locations. Moreover, it is exactly the willingness to take on this risk in unexplored areas (investment risk) under a volatile price regime (price risk) and the ability to manage these risks (joint ventures, technology, cooperation agreements, trading, hedging, etc.) that have changed the performance of private international oil companies. The rate of success of international oil companies in handling these various risks has also brought about a change in the structure of the international oil market.296
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van der Linde, C. (2000). Ambitious Consolidation. In: The State and the International Oil Market. Studies in Industrial Organization, vol 23. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-4575-0_8
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