The experience of Indonesia in the development of its petroleum industry underscores the differences in outlook and objectives which must be appreciated in any analysis of the interaction between transnational companies and local host governments. Both oil companies and the Indonesian government have been preoccupied with achieving an accommodation of interests which could provide a viable basis for cooperation over the extractive process. Yet what the Indonesian example also shows is that, while there may appear to have been a basic shift in favour of the host government in the content of agreements for oil extraction, when one begins to examine the precise terms and operational conditions of these agreements, it has at the least to be questioned if this presumed shift in favour of the host government has in fact occurred.

There may indeed be a trend towards an apparent new accommodation between foreign company and host government, but this does not mean that the latter has necessarily secured a markedly greater share of the benefits from the extractive operation. Preoccupation with obtaining formal ownership and control over the extractive operation has not meant that real control has in fact been exercised. Formal ownership may of course be desired as an end in itself, and is a legitimate objective if it serves to confirm the host government's authority. But there remain significant problems for the host government if it wishes to achieve effective control over the use of its oil resources.