In the increasingly transparent, real-time, digital business environment, the degree of collaboration required to succeed is rapidly expanding. Interdependencies created among diverse market participants, prospective partners and stakeholders is dramatically altering who actively participates in the oil and gas industry and how much influence they can yield.
An industry deeply premised on technical innovation and excellence must evolve to broaden the value proposition and address the complex, expanded stakeholder groups. Traditional value drivers need to be extended to effectively leveragemulti-party joint ventures (JVs) to address the principles of license to operate and deliver the required capabilities.
PwC hypothesises that risk-averse, technical, legal and quantitative biases drive joint venturing agreements to narrow obligations and sub-optimal outcomes. This is because narrow agreements ignore the behavioural, organisational and critical relationship-driven outcomes in contracting, venturing and alliance configurations.
By widening the lens of JV agreements and strategic alliances, the authors look briefly at real case studies and undertake critical observations of the emerging industry behaviour, in identifying the following range of factors industry participants need to confront:
the power and agility of social media driving industry response;
the role of subjective, human factors in realising strategic objectives;
the perceived rights of JV parties as the reality;
the role of emotion in decision making and misalignments of culture/style/behaviours among stakeholders;
the balance of diversity versus control requirements in governance management;
the enablers for co-creating, high-performing ventures and contracting for co-operation alongside risk management;
using the letter of the contract to facilitate rather than dictate behaviour; and,
the power of influence to enable decision making.
The shared experiences of the authors identify an attribution framework underpinning the contractual frame and extends into the effective planning and execution traits of high-performing, co-operative JVs.
The role of subsidies in promoting Italian joint ventures in least developed and transition economies