What is it about?
This study offers original detailed data on the offshore oil supply industry in its main North Sea oil service base in Aberdeen, Scotland. As the data was collected in the mid-1980s it will be of great interest to economic historians and anybody interested in the economics of industrial organization. At that time, there were 22 oil companies with offshore lease block concessions from the British government in its sector of the North Sea. These companies were supplied by over 1,000 offshore oil service companies with branches based in and around Aberdeen. As one senior executive of an oil major said to the author: "we aim to own as little as possible (in this oil service base)." To put it bluntly, an oil major having won a lease block concession, then hired other companies to do 'the dirty work'. After describing this industrial structure in detail, the book turns to explaining its economics with new theoretical insights in the field of the economics of organization.
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Why is it important?
The original insights in this book will be of interest to economic historians, theoreticians in the field of industrial organization, researchers in auction theory, and to anybody interested in the economics and politics of Scotland over the last 40 or so years. It should be noted that the industrial structure of the offshore oil supply industry has hardly changed over the last 40-years, something that bears out one of the main arguments in this book; namely, that host country firms will (and have) find it difficult to establish a strong presence in the global offshore oil supply industry.
Perspectives
The author of this book has written two other books on the economics of Scotland - both with Ronald MacDonald, Adam Smith Professor of Economics at the University of Glasgow. Those two books related directly to governmental organization and tax regimes in Scotland. With the income gained from the taxation of revenues earned in the Scottish offshore oil supply industry being of great relevance to the ongoing debate on Scottish secession from the UK, the health of this industry remains very relevant. The author has also sole authored a book on the topic "Interpreting Historical Sequences Using Economic Models: War, Secession and Tranquility". One whole chapter of that book is devoted to the question of whether Scotland will secede from the UK or remain a willing and tranquil member of it.
Paul Hallwood
University of Connecticut
Read the Original
This page is a summary of: Transaction Costs & Trade Between Multinational Corporations (RLE International Business), January 2013, Taylor & Francis,
DOI: 10.4324/9780203077764.
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