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FNI PROJECTS

Integration of the European Energy Sectors – Investment Strategies of Major Oil and Gas Companies

During the 1990s the major European gas and electricity utilities responded to regulatory changes at the EU and national levels by mergers and acquisitions that led to a stronger integration of the two formerly separate sectors. In response to EU removal of barriers to entry, mergers and acquisitions were increasingly performed also across formerly closed national borders. In response to the new rights given energy consumers to freely choose supplier, the mergers and acquisitions increasingly involved vertical integration. In response to harder environmental regulations, investment strategies increasingly involved engagement in new energy sources and fuels.

This project aimed at describing and analysing the response by major upstream oil and gas companies to this development. Did the companies react uniformly to the new challenges? If large differences in response can be seen, how could they be explained? A major hypothesis was that differences observed in strategies might be linked to differences in pace and ambitions of member countries to implement regulatory changes instructed by the EU Commission. Another hypothesis was that differences first and foremost reflected internal factors in the companies. In the first stage of the project, a database of the oil and gas companies' investment strategies in Europe during the 1990s was established. The patterns revealed were further analysed and differences between companies are explained in the second stage of the project.

The project was part of the Research Council of Norway's PETROPOL programme.


Project leaders: Jon Birger Skjærseth and Per Ove Eikeland


Project period: 2003-2005


Publications:

Eikeland, Per Ove and Ingvild Andreassen Sæverud, 'Market Diffusion of New Renewable Energy in Europe: Explaining Front-Runner and Laggard Positions'. Energy & Environment, Vol 18, No 1, 2007, pp. 13-37.

Eikeland, Per Ove, 'Downstream Natural Gas in Europe - High Hopes Dashed for Upstream Oil and Gas Companies'. Energy Policy, Vol 35, No 1, 2007, pp. 227-237.

Eikeland, Per Ove, Biofuels - The New Oil for the Petroleum Industry? FNI report 15/2005. Lysaker, FNI, 2005. 39 p.

Eikeland, Per Ove, Henrik Hasselknippe, and Ingvild Andreassen Sæverud, Energy Sector Integration in Europe - The Role of Leading Upstream Oil and Gas Companies (Summary version). FNI report 20/2004. Lysaker, FNI, 2004. 35 p.

Eikeland, Per Ove, The Long and Winding Road to the Internal Energy Market - Consistencies and Inconsistencies in EU Policy. FNI report 8/2004. Lysaker, FNI, 2004. 44 p.
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 Related focal points of research:

   Europen energy and environmental politics


Project funding:

   The Research Council of Norway


 External cooperation partners:

   BI Norwegian School of Management
   Statoil
   Norsk Hydro



Fridtjof Nansen Institute
P.O. Box 326, 1326 Lysaker, Norway. Tel: (+47) 67111900 / E-mail: post (+@fni.no)