Dealing with Governments in Emerging Markets: The Crude Oil Pipeline (OCP) in Ecuador Harvard Case Solution & Analysis

Ecuador's main industry is oil, which generates half of export earnings, finance a large portion of the state budget, and works directly more than 12,000 people in a country of 14 million people. Oil was discovered by foreign oil companies produced and distributed to a large extent on them until the national company was established in 1974, and exported to their state-owned companies and other companies operating in Ecuador. The relationship between companies and the government have been very turbulent, with the government, with partial ownership of the major companies in 1974, bought Gulf Oil a year later, and finally, taking the share of Texaco in 1992. Only small and medium foreign oil companies remain as opportunities in Ecuador are limited, and the government was unreliable in its regulation of firms. This case describes the process by which a second pipeline was built in 2001 to transport oil from the jungle to the coast, and the business relationship between the companies and the government in the process. Even in 2004, there were several major unresolved issues that have left the state telecom companies at very conflicting conditions.
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by Robert Gross, Juan Yanes Source: Thunderbird School of Global Management 13 pages. Publication Date: October 25, 2004. Prod. #: TB0129-PDF-ENG

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Dealing with Governments in Emerging Markets: The Crude Oil Pipeline (OCP) in Ecuador

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