Gran Tierra Energy Inc. in Brazil
(8 pages of text)
The CEO of Gran Tierra Energy (GTE) had to prepare for an upcoming strategy session with senior executives. GTE’s investments in Peru looked promising, as recent exploration well tests indicated large oil reserves with significant production potential that could transform the company. However, the company’s Brazil operations continued to encounter challenges, such as setbacks in applying new technologies. The CEO had had high hopes when GTE entered Brazil in 2009 and thought that he and his team had carefully considered the risks. Given the increasingly positive developments in Peru, was dedicating the resources of GTE — a somewhat small energy firm by global standards — to Brazil operations still worth the risk? Could GTE turn the situation around or should the CEO recommend a divestment of the Brazilian assets?
This case was developed for strategic management/international strategic management courses at the undergraduate and graduate levels. The case is also highly suitable for energy-focused strategy courses with MBA and EMBA students. The case was designed to enable discussions around the following concepts, issues and frameworks:
- International strategy archetypes.
- Firm-specific advantages.
- Entry mode/operating method choices.
- Location advantages (e.g., Porter’s diamond model).
- Elements of distance (e.g., CAGE method).
- Headquarters–subsidiary relations.
- Challenges of managing a multinational.
- Portfolio considerations (for more advanced students).
The case also provides sufficient information to enable discussions around business in emerging markets (including Peru, Colombia, Argentina and Brazil) and strategic alliances.
Mining, Quarrying, and Oil and Gas Extraction
South America, Medium, 2013
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