We provide evidence that international diversification in the oil and gas sector comes at an important cost; lower control over foreign oilfield assets (and therefore reduced control over oilfield cash-flows). This work examines the factors that drive companies to diversify despite the loss of control over oilfields. Detailed worldwide data for 293 companies owning 6633 field stakes enable us to demonstrate that diversification increases with firm size but results in lower asset control - with an important caveat companies seek to retain minimum control blockholdings in 'foreign oilfield assets'. We conclude, therefore, that companies seeking reserve replacement are forced to diversify but need to accept lower control over foreign asset cash-flows. (C) 2009 Elsevier Ltd. All rights reserved.