National oil companies Who are they and where are they going? Valerie Marcel Principal Researcher (energy) JETRO 7 April 2006 Outline z NOCs today z How are they different from IOCs z Oil Titans: the five major Middle East NOCs z Corporate culture and identity z Strategic ambitions 2 NOCs are the true Super Majors Substantial low-cost reserves Saudi Aramco NIOC z NOCs hold the Gazprom keys to growth Iraqi NOC PDVSA z Control nearly 3/4 KPC of global oil ExxonMobil reserves . RD/Shell Oil (bn bbl) Qatar Petroleum z . and more Condensate (bn bbl) TotalFinaElf than 60 per cent Gas (bn boe) of global gas Abu Dhabi NOC reserves Sonatrach ENI SpA PEMEX BP 0 50 100 150 200 250 300 3 Source: IHS (Petroconsultant) Internationalising NOCs 4 Oil Titans: National Oil Companies in the Middle East z Lack of available data led to interview based research z Cases: Saudi Aramco Kuwait Petroleum Corporation - KPC National Iranian Oil Company -NIOC Abu Dhabi National Oil Company - ADNOC Sonatrach … and their Ministries of Petroleum And regional banks z Also interviews and discussions within Statoil, Petrobras, Petronas, PDVSA, Total, BP, ChevronTexaco, ExxonMobil. 5 Key questions Process of maturation. Some 30 years after nationalization, NOCs are at a crossroads. Who are the NOCs? How do they relate to their governments? What do they want? Capacity increases - International – Integrated - Gas exporters? Can they achieve their strategic goals? Where are they heading? 6 Examples of changing NOC missions Petronas Petrobras Saudi Aramco Sonatrach National Commercial mission mission KPC Adnoc PDVSA 7 NOCs in the 21st Century z A balancing act between public service, profitability and (for OPEC) international market obligations Aramco View Public Service ‘Golden Quadrant’ Public Profitability International Service Markets Source – Aramco presentation Chatham House Nov 2004 Profit 8 Different NOCs Mineral Exclusive Saudi Aramco/oil, NIOC, Pemex Rights Shared with Libya’s NOC, Sonatrach, NNPC, Sonangol, IOCs PDVSA, ADNOC, Petronas Ownership 100% State Saudi Aramco, Pemex, NIOC, KPC, Sonatrach, Petronas, Socar, PDVSA, KMG in Kazakhstan, ONGC in India, Ecopetrol in Colombia Part Private Petrobras, Statoil, Gazprom, Gazprom, Petrochina, Sinopec Geography Domestic ADNOC, NIOC Domestic & Petrobras, Statoil, Sonatrach, KPC, Petronas, International Petrochina, ONGC 9 Strategic ambitions z All Middle East countries want spare capacity z Preoccupied with timing of investments z Preoccupied with the long-term management of reservoirs z Gas: Sonatrach and NIOC want to be gas hubs z Integration is an important part of their strategy z Internationalization is the next frontier 10.