Trends in international business: Royal-dutch shell in Russia and western sanctions

• Published in: International Organisations Research Journal
• Main Authors: Kurilev K., Martynenko E., Parkhitko N., Stanis D.
• Format: Article in Journal/Newspaper
• Language: English
• Published: National Research University Higher School of Economics 2020
• Subjects: Energy; Gazprom; International cooperation; Royal Dutch Shell; Sanctions; Transnational corporations; Sakhalin
• Online Access: https://openrepository.ru/article?id=256477

This article reports on research based on three crucial aspects of the current global economic situation. First is the role of transnational corporations (TNCs) in establishing and constructing international cooperation at the supranational level. Second is the policy of sanctions against Russia in connection with the situation in Ukraine. And third is the cooperation of Royal Dutch Shell with Russia's Gazprom despite the political, economic and technological sanctions imposed on Russian companies and economic sectors. Analyzing Shell's policy on the Russian energy market should reveal some kind of the managing principle that not only Shell but most TNCs follow in taking the political atmosphere into consideration, while striving to avoid any related restrictions. The research methodology uses analytical, ultimate analysis and functional methods. The analytical method helped to lay the theoretical foundation of the research. Modern TNCs are deeply engaged in the process of economic globalization. To expand their influence, such companies create economic conditions for organizing international production with local markets and for international markets for capital, labour, and scientific and consulting services. The ultimate analysis method revealed the following pattern: in struggling for the global market, TNCs raise the level of competition, which creates a permanent need for technical innovations and scientific progress. The functional analysis method demonstrated a casual relationship in modern economic development: by assisting capital turnover and labour and transport mobility, TNCs contribute significantly to economic growth and development. The first part of the article focuses on the history and methodology of the genesis and development of TNCs as actors in global economic relations. It also reviews the current role of TNCs in the global economy. The second part of the article examines the cooperation between Shell and Gazprom embodied in their joint realization of the Sakhalin-2 project and the prospects for the Sakhalin-3 project. The final section of the article contains analytical conclusions and theoretical recommendations. The authors came to two main conclusions. First, only transparent cooperation based on fair principles can guarantee stable economic ties between countries or any kind of global companies. Second, the accumulated experience in any field of cooperation provides quick and efficient payback of even the largest project. And even if the restrictions may correct (or try to correct) only in the short term but lay a foundation for long-term regress in relations, even one successful project, based on mutual trust and respect, can lead to a breakthrough in both economic and political relations between the countries.