Joint Ventures within the Energy Sector – Term Paper Example

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The paper "Joint Ventures within the Energy Sector" is an engrossing example of a term paper on management. The government of Saudi predominantly controls Saudi Aramco since the state owns it. Therefore, the Subjugation of the oil firm guarantees the government powers to manipulate and influence macroeconomic activities within its jurisdiction (Smith, 2008). On the contrary, international oil companies (IOC) vertically integrate primarily controls by individuals. These businesses have a presence in multiple countries. Interestingly, some National Oil companies are present in other countries. In the recent times, it is difficult to differentiate between the two firms when considering their presence across the world.

Although the state owns Aramco, Aramco is autonomous in nature. Nevertheless, it experiences an external influence from the ruling political party. The government of Saudi Arabia established this agency in order to make a profit, and to improve the economy of the country (Hughes, 2012). More importantly, the formation of Aramco focuses on the general development of a nation’ s natural resources. Reasons for choosing MotivaIn terms of investment funds, various NOCs have enormous disparities. From one side; there are organizations that can use approaches that are similar to the ones IOCs use.

In this case study, Aramco has large amounts of reserved earnings that can relied on in case hydrocarbon revenues reduction (Wilma, 2013). It uses the savings in order to maintain a healthy long-term capital program. On the other extreme, other NOCs are part of the Ministry of Oil or energy in their respective countries. Therefore, they depend on their governments for an extra amount of money. These companies transfer all the proceeds from the sale of hydrocarbon to the national government.

Therefore, during difficult times, these firms compete with other state departments for the limited funds the government possesses. As a result, prospective investment plans by NOCs stall due to lack of enough funds. Saudi Arabia serves as the primary oil producer in the globe. Over the years, it has demonstrated the desire to increase or reduce oil prices in order to concur with the Organization of Petroleum Exporting Countries (OPEC) target levels.

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