Navigating joint ventures in the oil and gas industry
Navigating joint ventures in the oil and gas industry
Navigating joint ventures in the oil and gas industry
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JV types<br />
JVs typically utilized with<strong>in</strong> <strong>the</strong> <strong>oil</strong> <strong>and</strong> <strong>gas</strong> <strong>in</strong>dustry broadly fall <strong>in</strong>to<br />
one of three categories:<br />
• The full asset JV<br />
• The full bus<strong>in</strong>ess JV<br />
• The market<strong>in</strong>g alliance<br />
Full asset JV<br />
A JV entered <strong>in</strong>to with regard to a<br />
specific set of exist<strong>in</strong>g asset(s) or to<br />
develop asset(s). These have tended<br />
to occur around upstream JVs,<br />
pipel<strong>in</strong>es, ref<strong>in</strong>eries <strong>and</strong> <strong>in</strong>creas<strong>in</strong>gly<br />
now with LNG projects. The upstream/<br />
full asset JV is <strong>the</strong> most commonly<br />
occurr<strong>in</strong>g type.<br />
Exploration Development<br />
Upstream<br />
Production<br />
<strong>oil</strong>/<strong>gas</strong><br />
Pipel<strong>in</strong>es LNG liq./re-<strong>gas</strong><br />
Ref<strong>in</strong><strong>in</strong>g<br />
Petro-<br />
chemicals<br />
Midstream<br />
Transportation<br />
Distribution<br />
Downstream<br />
Distribution<br />
Retail/<br />
wholesale<br />
Retail/<br />
speciality<br />
Full bus<strong>in</strong>ess JV<br />
A JV entered <strong>in</strong>to to comb<strong>in</strong>e <strong>the</strong><br />
resources of entire bus<strong>in</strong>esses to<br />
create market<strong>in</strong>g, supply cha<strong>in</strong>,<br />
production <strong>and</strong> scale synergies. These<br />
have historically tended to occur with:<br />
• Downstream, chemicals <strong>and</strong><br />
midstream bus<strong>in</strong>esses<br />
• Oil field services companies with<strong>in</strong><br />
<strong>the</strong> upstream sector<br />
Exploration Development<br />
Pipel<strong>in</strong>es LNG liq./re-<strong>gas</strong><br />
Ref<strong>in</strong><strong>in</strong>g<br />
Petro-<br />
chemicals<br />
Upstream<br />
Production<br />
<strong>oil</strong>/<strong>gas</strong><br />
Midstream<br />
Transportation<br />
Distribution<br />
Downstream<br />
Distribution<br />
Retail/<br />
wholesale<br />
Retail/<br />
speciality<br />
4 <strong>Navigat<strong>in</strong>g</strong> <strong>jo<strong>in</strong>t</strong> <strong>ventures</strong> <strong>in</strong> <strong>the</strong> <strong>oil</strong> <strong>and</strong> <strong>gas</strong> <strong>in</strong>dustry<br />
These types of JVs tend to occur <strong>in</strong> specific areas with<strong>in</strong> <strong>the</strong> <strong>oil</strong> <strong>and</strong><br />
<strong>gas</strong> sector. The l<strong>in</strong>ed boxes with<strong>in</strong> each JV category highlight <strong>the</strong><br />
areas that are more prevalent with<strong>in</strong> <strong>the</strong> three ma<strong>in</strong> subsectors,<br />
upstream, midstream <strong>and</strong> downstream. This can be summarized <strong>in</strong><br />
<strong>the</strong> graphic below:<br />
Market<strong>in</strong>g alliance<br />
A JV entered <strong>in</strong>to with <strong>the</strong> <strong>in</strong>tent of<br />
<strong>jo<strong>in</strong>t</strong>ly market<strong>in</strong>g product(s), e.g.,<br />
motor fuels retailers <strong>and</strong> convenience<br />
stores jo<strong>in</strong><strong>in</strong>g forces to comb<strong>in</strong>e <strong>the</strong>ir<br />
consumer offer<strong>in</strong>gs.<br />
Exploration Development<br />
Upstream<br />
Production<br />
<strong>oil</strong>/<strong>gas</strong><br />
Pipel<strong>in</strong>es LNG liq./re-<strong>gas</strong><br />
Ref<strong>in</strong><strong>in</strong>g<br />
Downstream<br />
Petro-<br />
chemicals<br />
Midstream<br />
Transportation<br />
Distribution<br />
Distribution<br />
Retail/<br />
wholesale<br />
Retail/<br />
speciality
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