Abstract
The oil industry is an industry in which, typically, large economic rents can be earned, because the market price is well above the price required to keep the factor of production in active use and is above the price required to earn economic profits. Bargaining and negotiation determine the division of these rents and, historically, there has been cyclical change in the relative balance of power between host states and their national oil companies (NOCs) and major international oil companies (IOCs) (Stevens 2008: 27), reflective of the cyclical nature of the oil and gas industry. For instance, some periods, such as the 1970s and early 1980s, can be classified as conflicting as there was a high degree of disharmony between actors with incompatible interests, and host states and NOCs were dominant. In contrast, o5her periods, such as the later 2980s and 1990s, can be referred to as ‘cooperative’, due to relatively harmonious relationships and compatible interests between actors in the international oil industry. This was also a period when IOCs were in a dominant position vis-vis the host states.
Read the article online here. (subscription required)