The OLI theory stated that entry mode decisions are determined by the composition of three sets of advantages as perceived by enterprises:

– ownership advantages – advantages that are specific to the nationality and nature of the company-owner;

– location advantages – advantages arising from the fact that various locations can provide different resources, institutions and regulations related to the revenue and production costs;

– internalization advantages – advantages associated with the transfer of ownership advantages across national boundaries within own organization.

These firm specific advantages (FSA) or ownership advantages are usually intangible and often can be transferred within the MNEs at low cost, for example brand name, technology, benefits of economies of scale. These advantages either lead to higher revenues and/or lower costs that can offset the costs of operating abroad. According to the results of interviews, both companies, Chevron and BG Group, possess these advantages, including brand name, developed technology, which allowed them to gain higher revenues and sometimes lower costs.

During the interview there were defined that international companies, which entered oil sector of Kazakhstan, faced additional costs – ” costs of foreignness'”. These costs could be specified as follows: language, cultural, institutional and legal diversities, lack of knowledge about local market and business, costs of operating and communicating at a distance. Of course, both companies realized the presence of such additional costs, and also realized that these costs are easy to overcome and eventually everything will be repaid with interest. Consequently, if a foreign company is to be successful in foreign country, it must have some kind of advantage that overcomes the costs of operating abroad. MNE should have specific advantage against their competitors, if it needs to be profitable abroad.

There are three basic types of firm specific advantages (or ownership advantages), which MNE can possess:

– monopolistic advantages. Multinational Enterprises can possess these advantages in the form of privileged access to input and output markets through ownership of patent rights, licenses, rare and unique natural recourses and etc;

– technology, knowledge that in a broad sense include all forms of innovation activities;

– economies of large size or advantages of common governance. These advantages include economies of scale and scope, learning economies, advantages from international diversification of risks and assets, wider access to financial capital across the MNE.