International Partnership in Russia: Conclusions from the Oil and Gas Industry

  • Published

International Partnership in Russia: Conclusions from the Oil and Gas Industry  by James Henderson and Alastair Ferguson, Palgrave Macmillan, 2014, 327 pp.

This well-written text clearly illuminates the historical background of the Russian joint international ventures development plan. Authorities prohibited foreign investment in the oil industry during the Soviet era, which allowed the development of solid reserves that have positioned Russia to dominate the oil market. Russia is the "largest global producer of oil and gas combined." The plan was developed in 1988 as the former Soviet Union began to fall. The Soviet government authorized foreign, oil-producing companies to form joint ventures in an effort to close the technical capability gap. As part of the plan, any additional oil that was harvested was exported to generate revenue. Consequently, the former Soviet Union painstakingly and diligently planned for this era.

The blend of history, economics, and political intentions are well balanced and sufficiently inform the readers with the ability develop their own perspective of the current state of affairs within the Russia Federation. The text expertly demonstrates Russia's vulnerability to corruption while leveraging oil revenues for the benefit of the domestic economy. The authors took a very difficult, complicated set of factors and deftly presented it to their readers in a succinct manner. After reviewing the qualitative and quantitative joint ventures from 1991 to 2003, the most significant factor was the lack of foreign investment companies' knowledge and understanding of the local culture. Once the technical expertise was gained during the 1990s, there was less need for foreign partners. In light of this, it appears that the Russian Federation has returned to its policies and practices of the Soviet era, tightly controlling direct involvement of foreign companies.

I appreciate Henderson and Ferguson's ability to walk the readers through their relationship mapping process as applicable to Russia; however, I am unconvinced that given the established cultural norms that this is a realistic model. The relationship building model consists of the decision maker, the advisors, the gatekeeper, and the associates. It assumes that all parties and factors are equal. The authors have clearly identified the roles, but I am inclined to believe that past events indicate that this may be a lofty aspiration in the Russian environment. However, due to the growing, internal political unrest and pressure from the Northern Caucasus, this model may be feasible in the near future.

I highly recommend this book for international business and economics students, and I would welcome a second installment as a continuation and discussion of the current state of affairs. This is a topic that has longevity and requires continued study and analysis. As Winston Church said, "Russia is a riddle wrapped in a mystery inside an enigma." That statement remains true.

Rhondra O. Willis, PhD
Russian Counterintelligence Specialist
Naval Criminal Investigative Service

"The views expressed are those of the author(s) and do not reflect the official policy or position of the US government or the Department of Defense."