Investing in Energy: A Primer on the Economics of the Energy Industry

The Road Ahead for Integrated Majors

In an environment of mid to lower crude oil prices, integrated majors or IOCs find themselves in greater demand. As crude oil prices decline, NOCs will encounter greater economic pressures and home economies bear the brunt of decreased oil revenue. Conversely, IOCs do not have the financial pressures of supporting sovereigns and repatriating cash flows to home governments. Most IOCs have considerable resources, in terms of both technology and financial wherewithal, to withstand economic shocks of declining crude oil prices. As a result, IOCs are increasingly in demand as joint venture partners. While the landscape for IOCs may appear ominous, IOCs certainly have a future as increased demand for energy places ...