Chevron in Central Asia

Babson Professor Joel Shulman, Case Director

Azita Sharif and Adam Smolyar, Case Writers

Arthur M. Blank Center for Entrepreneurship

© Babson College, 2001.


Kazakhstan declared independence from the former Soviet Union in 1991. Since then it has been involved with Chevron Corporation in the development of oil in the Caspian Sea. There are competing claims to these oil reserves by other countries that border the Caspian Sea, such as: Russia, Iran, Azerbaijan and Turkmenistan. These oil and gas reserves are substantial and have attracted the interest of most world economic and political powers because of their potential strategic importance.

Chevron is faced with a major decision – whether to make a further significant investment ($1 billion) in the oil fields by buying out the equity position the government of Kazakhstan holds in the fields. This decision is compounded by factors external and internal to the government. For example, externally, Kazakhstan's neighbors have not agreed as to who has legitimate claims to which parts of the Caspian. (In fact, part of the debate revolves around whether the Caspian is a sea or a lake. It makes a significant difference in international law.) Also, domestically, there are Kazakhs who disagree with the government's decision to disinvest and domestic violence is a real possibility.

Location of the company: Global

Years spanned by the case: 1991 through 2001

Industry segment(s): Oil and Gas

Stage of the company: Mature

Age of the entrepreneur(s): N/A

Key Words: Oil, Gas, Kazakhstan, Caspian Sea, Russia, Chevron, political instability, Middle East


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Teaching Notes

A 13-page case teaching package, written by Joel Shulman, is available for this case. The teaching package includes strategies for case presentation, key concepts, updates, solutions to the assignment questions in the case, and suggestions for the most effective ways to work this case into a course.