GLOBALIZATION’S DOUBLE-EDGED SWORD:RESOURCE DEPENDENCY AND GEO-POLITICS OF OIL IN PETRÓLEOS DE VENEZUELA (PDVSA)

Combining institutional theory of the firm with resource dependency analysis, this study explores the ever-changing geopolitics of oil and challenges of overproduction in Venezuela’s national oil company (NOC), PDVSA. It analyzes a state company's structural crisis and its limitations for growth through the lens of resource dependency theory and geopolitics of oil. Despite the recent easing of US sanctions, our findings suggest that an alternative firm strategy is rarely, if ever, viable for the company due to its international and geopolitical dependency. This paper further argues that PDVSA’s performance reflects greater alignment of crisis management with the geopolitics of resource-based development. PDVSA has pursued a strategy of ‘jockeying’ between transnational oil interests (private-ly-owned, Western MNEs) and non-Western oil companies from allied nations like Russia and China. Furthermore, since much of the oil windfall resulted from currency overvaluation by inefficient na-tional and foreign capital, PDVSA has been unable to maintain a competitive advantage that could enhance its performance. This study is limited to the oil sector in Latin America, but a few examples of ‘resource nationalism’ emerging from other countries are briefly discussed. The paper concludes by discussing the policy implications of the research for oil industry managers in the context of ongoing globalization.