A 1979 article focused on how Sohio (Standard Oil Co.) arranged nearly $6 billion in external financing needed for an Alaskan project from 1969 to 1977. This was the result of an agreement between Sohio and British Petroleum (BP) that involved a swap of BP's US reserves for an eventual 55% ownership share of Sohio. However, an account of how Sohio invested the huge cash flows generated by the sale of Alaskan project reserves from 1978 to 1986 is a case study in certain shortcomings of the corporation in efficient utilization of internally generated capital. Many other oil companies experienced some degree of economic mishap during the 1980s, but Sohio's performance in particular was marred for reasons that include: 1. Company management was inexperienced. 2. BP's majority ownership served to make Sohio especially sensitive to political pressures. 3. Sohio's initial long-term commitments of cash flow were needed at the time of the greatest political pressures on the oil industry.
Full text: Financial Management, Summer 1988
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