The Oil and Gas Industry is changing rapidly and part of this change is the ongoing power shift that is currently taking place. A power shift in which the Oil & Gas Industry is being transformed from an industry that was once led by International Oil Companies (IOCs) such as ExxonMobil, Chevron, Shell, etc to an industry that is led by National Oil Companies (NOCs) such as Aramco, ADNOC, Rosneft, Equinor, PETRONAS, Eni, CNOC, etc.
How did it all start? Well, it all started with Nationalisation that took place in countries with the largest Oil & Gas Reserves in the world.
Over the past few decades, this nationalisation trend has led to the emergence of new leaders in the O&G industry. Despite the fact that nationalisation made NOCs very powerful players, almost all NOCs started off heavily dependent on IOCs to manage and produce Oil and Gas. And through years of experience, knowledge transfer, technical development, and access to capital, these newly formed NOCs managed to transform themselves into industry leaders.
Today, these new industry leaders are more than capable to compete with the IOCs when it comes to the ability to produce and manage Oil & Gas assets effectively, the know-how and developing new technologies and innovations. As an additional bonus, these new industry leaders have the Oil & Gas Reserves, again thanks to nationalisation.
Moving forward, in an industry where Oil and Gas Reserves is “KING”, we will continue to see a growth in the influence and power of National Oil Companies as they are the Oil and Gas Reserves holders. We will also see more NOCs grow further and expand beyond their home countries to become the “New IOCs”.
International Oil Companies (IOCs), the likes of Chevron, ExxonMobil, bp, and Shell, will continue to loss both the influence/power as well as the Oil and Gas Reserves. These companies will try to transform themselves into “Energy Companies” and position themselves for the future energy transition by investing heavily in developing new technologies for alternative energy sources, but then, I don’t see why NOCs will not be able to do the same.
Given the ongoing power shift in the Oil & Gas Industry, I have to say, I will not be surprised to one day see Oilfield Services Companies such as Schlumberger or Baker Hughes become more powerful than ExxonMobil or Shell.
