Shares in the major national oil companies (NOCs) have significantly outperformed the international oil companies (IOCs) over the last five years, hitting a peak last October, when the top performing listed NOC shares were on average over four times higher in value than those of the majors, according to a report from Ernst & Young - "Are national oil companies the new international oil companies?"
The report, which will be publicly launched at the World Petroleum Congress (WPC) in Madrid at the end of June, says that over half of the world’s 100-plus NOCs now have overseas operations, as IOCs move away from countries that are not operationally profitable.
The report says that newly found oil wealth of many resource holding countries is encouraging NOCs to move beyond their home borders, creating the “i-NOC generation”. In recent years, NOCs have almost exclusively chosen to further their international ambitions through partnerships.
“As gatekeepers of national resources, NOCs, were historically defined by their national identity,” says Andy Brogan, an oil and gas leader at Ernst & Young and author of the report. “But the rise in oil prices witnessed over the last five years has enabled an increased number of NOCs to broaden their ambitions, demonstrating their ability to deliver share price growth for private investors and indicating the value of potential growth compared to that of IOCs.”
The report predicts asset swaps will be increasingly used by NOCs to gain access to markets of choice where they currently have limited or no presence. “Algeria and Qatar have already indicated that if companies want access to their oil and gas reserves they need to reciprocate with offers of assets that provide access to markets or are complementary to existing activities,” Brogan comments.
Ernst & Young is a silver sponsor at this year’s World Petroleum Congress, which takes place in Madrid from 29 June to 3 July 2008. Ernst & Young will formally launch a number of reports on its stand from 30 June, including "Are national oil companies the new international oil companies?" and "The future of the oilfield services industry".
Advanced Geophysics
London, 14th October
Remain on top of the latest technical developments by attending this free forum.
Seats are strictly limited, so don't miss out!
Presenters
CGGVeritas, RXT, ION, Ikon Science, Paras Ltd and more to be announced!
|