Summary:

The oil industry is becoming increasingly competitive and with the rising nationalisation of resources, international oil companies are struggling to secure access to new oil and gas reserves. Statoil faces challenging tasks as it seeks to move from a protected home market to the extremely competitive international arena. Its ambitious internationalisation strategy relies heavily on getting access to new oil and gas reserves and large investments in new and leading technology. However, Statoil needs to consider different growth alternatives to increase its international competitiveness. In this paper, we recommend the proposed merger with Norsk Hydro to be the most politically feasible alternative. Nevertheless, we question whether this will give Statoil sufficient international strength required for the fiercely competitive international arena. Consequently, Statoil might have to consider other growth alternatives even after the merger or adapt its business model to better fit the needs and requirements of the industry today.