(Solution Download) 1 Do you believe that countries should permit foreign ownership

1. Do you believe that countries should permit foreign ownership of vital scarce natural resources? Explain your answer.
2. What real options might be implicit in CNOOC?s investment in Chesapeake? Be specific.
3. To what extent does the Chesapeake transaction represent the benefits of free global trade and capital movements? In what way might it reflect the limitations of free trade?
4. Compare and contrast the Chesapeake and Unocal transactions. Be specific.
5. Describe some of the ways in which CNOOC could protect its rights as a minority investor in the joint venture project with Chesapeake. Be specific.

Cross-border transactions often are subject to considerable political risk. In emerging countries, this may reflect the potential for expropriation of property or disruption of commerce due to a breakdown in civil order. However, as Chinese efforts to secure energy supplies in recent years have shown, foreign firms have to be highly sensitive to political and cultural issues in any host country, developed or otherwise.


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