The Final Frontier: E&P's Low-Cost Operating Model

CHAPTER 5National Oil Company Considerations

Most Western countries abandoned the National Oil Company (NOC) model many years ago, but the rise of NOCs has shifted the balance of control over the world's hydrocarbon resources. In the 1970s, NOCs controlled less than 10 percent of the world's energy resources, but now control the majority of the world's reserves and production.¹ This shift came in concert with increased access to capital, expertise, and technology, as NOCs built in‐house capabilities to enable them to operate increasingly independently. NOCs continue to seek to enhance their ability to contract and manage operations through oilfield services companies.²

This shift has fueled a major evolution in roles and strategies for all oil and gas companies—including NOCs, international oil companies, and independents. NOCs have seen their power and influence grow. Moreover, the demands on NOCs continue to evolve with changes in the global energy landscape—changes in demand, discovery of new sources, and national and geopolitical developments. As managers of their country's natural resources, NOCs increasingly own and manage their complete oil and gas value chain from upstream to downstream activities, but now they are also emerging as both potential partners and competitors in the international scene in search of upstream and downstream assets.³

While the rise of NOCs saw the balance of control over hydrocarbon resources shift in their favor, they each face an increasingly ...