Publicly traded major oil companies’ greatest future contribution may be to supply exploration and production services to national oil companies, an energy consultant suggested Mar. 27.
National oil companies increasingly are using a “might and market” strategy to outbid multinational majors for oil and gas reserves, said Joseph Stanislaw, a cofounder of Cambridge Energy Research Associates who now heads his own consulting firm.
His view of “might” is the mobilization of national governments’ economic power, he told participants at the US Energy Information Administration’s 2006 energy outlook conference.
“Combine that with a large market and you have an entity that not only aggressively pursues oil and gas but is willing to pay more than anyone else,” Stanislaw said.
He said he first heard of this strategy at the 1997 World Petroleum Congress in Beijing when China’s president and prime minister each quietly signaled the country’s intention to aggressively secure supplies.
National oil companies have historically not done as well at exploration and production, Stanislaw said, adding, “This will be important as the structure of integrated oil companies is increasingly questioned.”
He suggested that future supply growth will occur in a corridor running from Saudi Arabia through the Caspian basin across Siberia to northern Canada.
“People will be the most important national resource in future oil and gas development,” Stanislaw said.
It’s becoming increasingly apparent that most of them will be trained outside the US, he added.
He cited the Gupkin Institute in Russia with about 8,000 students and 1,500 in each entering class who are studying petroleum engineering.
Gupkin is one of eight Russian institutes with strong oil and gas programs that embrace the environment and unconventional technologies, according to Stanislaw.
“These students have a true sense of history,” he said. “They are also regarded as heroes of the general population. How many US oil and gas employees are considered the good guys?”
The result will be industry expertise coming from countries where English isn’t the primary language.
“We face the prospect of major oil companies truly becoming international and not simply US and European firms operating around the world, Stanislaw said. ✦
