The Role of National Oil Companies in Today's World
Majid al-Munif Al-Hayat - 17/07/06//
Analysts point out that a cause of the record levels prices have reached in world oil markets and the increasing interest in energy security and other issues was the structural changes in both the demand and supply of oil.
They refer to the fact that the shift in demand from the industrialized countries to the rapidly growing countries, like China and India, and the focus of world oil demand on the transport sector on the one hand, and the decline in output growth outside the Organization of Petroleum Exporting Countries (OPEC), particularly the Middle East, on the other hand, gave prominence to the oil markets today more than it had in the past decades.
But there is a change that is important for the present, and which has its implications for the future. This change, often ignored, is the growing role of the national oil companies in the balance of global energy and in the management and stability of the market.
Over the past three decades, producing and consumer nations, particularly in the developing world, have established national oil companies, whether as a result of nationalization, or because they own the reserves and manage the operations of international concessionaires in several oil-producing countries, including Arab States. Yet another reason for the creation of national oil companies is that the oil sector is considered vital for development or the accumulation of wealth, or both.
Some of these national companies were established as an extension of the international concessionaires in terms of financial and administrative structures or organizational relationships. Others were newly created. Nevertheless, the role of these companies at the domestic and international levels, and their scope of operations, were enlarged with the passage of time, to the extent that some of them have begun today to compete with the largest global oil corporations that dominated oil-based relations throughout the 20th century, such as Exxon, Chevron, Shell, British Petroleum and France's Total.
Although the national oil companies vary in their historical development, their relationships with governments, their efficiency, their role in the national economy, and the scope of their operations, it is confirmed today that they collectively own more than 65% of the world's oil and gas reserves and produce more than half the global oil and gas output.
It is anticipated that the role of these companies will be strengthened with expectations of the continued growth of world supply and demand for oil and gas. The Middle East and Russia (where national companies play the biggest role in production) are expected to play a leading role in meeting the global needs of oil and gas over the next 30 years.
cont'd
http://english.daralhayat.com/business/07-2006/Article-20060717-7be419c7-c0a8-10ed-01ce-4de8260caf4c/story.html
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