According to a document, Oil & Gas Industry Consulting many National oil companies (NOC) are expanding and maturing into multinational oil companies (MNOC). These companies that were once confined or limited by state or national borders are no longer operating solely in the domestic market-they have become multinational. Though they continue to be linked to “sovereign” states, they are no longer forced to stay within that border. If you think about it, they are looking and sounding more like International Oil companies (IOC). This of course is causing alarm and great concern from the IOC who now has to face greater competition. NOC (or MNOC) were motivated to expand or “mature” because of the change in the market. They no longer wanted to be dependent on domestic business- whose demand for oil is continually lowering. Conversely, according to this document, “global oil consumption has increased by 30% and by 50% outside of the OPEC.” The increase in oil consumption is attributed to the high economic development in the region (which corresponds to greater energy needs).
Also, in past years IOC’s had advantages that NOC’s did not have, such as global access, access to capital (NOC were state backed),innovative technology(NOCs had standard technologies), and global partnership(NOC had only local partnership) but no all is changing. The distinction between IOC and NOC is becoming blurred. NOC is gaining increasing access to capital, is developing alliances, and is continually upgrade from standard technologies.
Distinctions between the two forms of oil companies are becoming more unnoticeable. As this happens IOC will undoubtedly face greater competition and will need to work even harder to maintain its standing.
Although this document did not provide specific examples it shows us a trend that I think is very important in the Energy(oil and gas) industry.
http://www.bain.com/bainweb/PDFs/cms/Public/INDUSTRY_BRIEF_Multinational_NOCs.pdf
~Mimi Tekeste
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