Strategic responses of petroleum companies to the oil price drop of 2014 : a multiple-case study on how investment and divestment behavior is shaped by internal and external firm factors
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- Master Thesis 
The drop in oil prices in 2014 induced various strategic responses among international oil and gas companies. This master thesis explores how petroleum companies responded to the oil price slump in terms of investments and divestments and how their internal and external factors influenced these decisions. Internal firm factors are assessed from the perspectives of the resource-based view and the theory of dynamic capabilities, while the external factors of a firm are analyzed with the game-theoretic approach. We conduct a multiple-case study and collect secondary data on six different oil and gas companies which have exploration and production operations. We find that internal firm factors, resources and dynamic capabilities, delineated the general directions for undertaken strategic responses, while strategic games defined the specific actions. Thus, evidence is provided on the characteristics that shape the strategic responses of firms, which can then be used by managers when making decisions in times of unfavorable changes in the economic environment. Likewise, our findings contribute to the further development of the dynamic theory of strategy by Porter (1991).