THE RUSSIANS ARE COMING: LUKOIL’S GLOBAL ENERGY REACH

The primary subject matter of this case concerns the global energy reach of Russia's largest integrated oil company, Lukoil. Secondary issues examined include political risk, ethics, and strategic management. The case has a difficulty level of three, appropriate for junior level students. The case is designed to be taught in one class hour and is expected to require three hours of outside preparation by students. CASE SYNOPSIS Russia’s largest integrated oil company, LUKOIL, has partnered with the American energy giant, ConoPhillips in order to expand the Russian retail presence in the United States, and to explore more energy sourcing. The case examines the importance of this Russian company to the global energy market, its implications for American consumers and investors, and the potential geopolitical implications of Russia’s energy resources. LUKOIL is Russia’s largest vertically integrated oil company (Figure 1). The private company constitutes over 19 % of Russia’s oil production and 2 % of world oil supplies (Lukoil, Russia’s largest oil company by Isabel Gorst). Besides aggressive oil exploration, the company has formed a strong alliance with GAZPROM, the state owned gas company and most recently ha