Paula Dittrick
Senior Staff Writer
HOUSTON, Feb. 7 -- Models of cooperation between national oil companies (NOCs) and international oil companies (IOCs) are changing, according to an Accenture report.
Accenture analysts profiled 20 NOCs and interviewed executives at 10 of them for a report released Feb. 7 at the Cambridge Energy Research Associates annual energy conference.
Alex Oliveira, global upstream senior executive with Accenture, said relationships between NOCs and IOCs now focus more on specific projects than on long-term arrangements.
For instance, BP PLC and Statoil ASA find their relationships much more project-based compared with the strategic alliances under which the companies worked in the 1930s, he said.
Oliveira said many NOCs are watching Statoil as an example of an NOC that trades on international financial exchanges and deals with IOCs on projects worldwide.
Meanwhile, relationships between NOCs themselves are becoming longer term and more strategic, Oliveira said.
"The demand-side NOCs have changed the currency of competition, offering the supply-side NOCs strategic partnerships that extend to economic and infrastructure development, far beyond the traditional deals offered by IOCs," Oliveira said.
Integration
Most NOC executives who were interviewed said they still see a clear role for doing business with IOCs.
Melissa Stark, an Accenture senior executive, said the NOCs indicated a desire for IOCs' downstream assets and technology capabilities, particularly in the areas of LNG and gas to liquids.
NOCs also want to do business with IOCs to find and produce unconventional oil reserves and ultradeepwater reserves, she said.
"Every NOC executive with whom we spoke had clear ambitions to both internationalize and broaden across the oil and gas value chain," she said.
NOC mergers and acquisitions amounted to $33 billion during 2005 compared with $1 billion during 2000, the report said.
Priorities
Because NOCs have widely ranging priorities, IOCs must customize their partnerships accordingly.
"Just as governments use NOCs for different national objectives—be it custodian of resource, securer of supply, revenue collector, or engine of national development—so NOC priorities vary widely," the Accenture report said.
Claire Lawrie, senior manager with Accenture's London office, said IOCs cannot assume that NOCs from the same region have the same concerns or relationships with their governments.
"The IOCs need to be much more creative in the deal-making," Lawrie said. For instance, the IOC needs to consider how its business operations can contribute to the host country's economy.
Stark said all NOCs seek growth opportunities offered by globalization and technology. But when asked to name their top two or three priorities, executives' responses varied greatly from NOC to NOC.
No single priority made the top three in all 10 NOC interviews, Stark said.
Key priorities include revenue growth, security of supply, profit margin, local economic development, international and diplomatic relations, and infrastructure development.
Contact Paula Dittrick at [email protected].
