Transferable Know-How: Evidence from the Upstream Oil & Gas Industry

Department of Economics and Decision Sciences

Speaker: Clément Mazet-Sonilhac (Bocconi)

Room T-014
 

Abstract :

We investigate the consequences of the adoption of Enhanced Oil Recovery (EOR) on productivity, competition, and further technological adoption in the upstream oil & gas industry in the North Sea. Exploiting geological heterogeneity and a Norwegian Supreme Court decision that reduced policy uncertainty, we show that early EOR adopters increased their productivity and gained shares of the North Sea market through three channels. First, direct productivity gains due to EOR adoption. Second, specialization by transferring the acquired know-how to other EOR-eligible fields. Third, diversification through know-how-driven economies of scope that facilitated investments in non-EOR-eligible fields requiring alternative technologies.