Editor Pick: How Commercial are National Oil Companies?
Recently attention has focused on resource nationalism concerns in many oil exporters. As part of the adjustment to higher oil prices, many hydrocarbon exporters are seeking a higher share of the revenues. In many cases production sharing agreements included incentives for exploration when oil prices were weak in the 1990s – a situation which has reversed today. Many jurisdictions are revisiting the optimal government share of profits. Changes in the revenue take also necessitate domestic debates how much should be spent and saved – oil exporters are spending a greater share of incremental oil price increases then they were in 2003-2005 or even 2006.
Weinberg et al’s paper (and presentation) on the commercial framework of National oil companies adds to the debate – looks at national oil companies that are more transparent and have stated commercial aims, it asks how these companies measure up to those aims and how commercial their motivations are. Case studies include Petrobras, Pemex, Nigerian oil company and Statoil. Of course there are significant differences between such companies including their how much of the revenues get reinvested into the business, what role such revenues have in national fiscal policy and how they interact with other national and international oil companies.
Only Norway has a well-defined hydrocarbon policy addressing all sectors (upstream, mid-stream and downstream) as well as the roles for permitted participants in the sector. Brazil and China have well-defined policies for the upstream sector but lack a coherent policies for the mid and downstream natural gas sectors. Mexico has well-defined policies for he mid and downstream sectors but they don’t fit well with the current upstream sector organization.
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