Chapter 5 – The Institutional Dimension

Overview
Institutions matter in that they constrain, slow down, or hinder business; but they also enable and foster economic interaction. They signal what conduct is legitimate and acceptable and what is not. It is therefore important to have a thorough understanding of the formal institutions before entering a country. However, recognising when informal relationships must be developed before business can be conducted due to generally weak formal institutions is also important.

Activity description
ConocoPhillips is a USA MNE that explores for, develops and produces crude oil and natural gas globally. Based on production figures and proved reserves it is the largest independent oil exploration and production company in the world. It operates in 17 countries covering Alaska, Canada, Asia Pacific & the Middle East, United States, and Europe & North Africa. Its North African operations consist of a 16,3% interest in the Waha Concession in the Sirte Basin of Libya as a co-venture with the Libyan National Oil Corporation and other partners. Since the Libyan civil war the country has struggled to rebuild state institutions amid rising violence.

Go to the website and research other relevant and reliable sources on the current situation in Libya.

Consider:

• What is the current political situation in Libya?
• Who are the main players in the country?
• Who are currently leading the National Oil Corporation?
• What types of institutional voids exist in Libya?
• How may those impact on future plans for ConocoPhillips in Libya?

Visit the following website:
http://www.conocophillips.com/operations/europe-north-africa/