Developing New Resources : How to Gain Dynamic Capabilities and Competitive Advantages from Integrated Operations in the Upstream Oil and Gas Industry

In this paper, we examine inter-organizational relationships in the oil and gas industry resulting from integrated operations. We also try to create a linkage between resource-based view theory and dynamic capabilities. Further, we examine how selected companies in the oil and gas industry could use incentive-based contracts with risks and rewards to bring about competitive advantages and dynamic capability. This is gained through better project planning and execution, better information sharing, the avoidance of goal congruence and wrong key performance indicators and the avoidance of suboptimal resource allocation. The abovementioned factors were found by using an embedded multiple case study focusing the inter-organizational relationships among one large operator, three large service providers and several small service providers on the Norwegian Continental Shelf. We found that those factors give rise to barriers that are important to overcome if one should succeed in realizing dynamic capabilities and competitive advantages. We relate those barriers to resource-based view theory and dynamic capabilities and discuss how they can be overcome