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20 - Major conclusions and implications for the future of the oil industry

Published online by Cambridge University Press:  05 January 2012

David G. Victor
Affiliation:
University of California, San Diego
David R. Hults
Affiliation:
Stanford University, California
Mark C. Thurber
Affiliation:
Stanford University, California
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Summary

Introduction

Here we return to the central question posed in the Introduction to this book: Why do national oil companies (NOCs) vary in their performance and strategy? In the Introduction we offered three broad hypotheses that might provide answers. NOC performance and strategy might simply reflect the goals and interests of governments. Alternatively, NOC strategy and performance might mainly reflect the quality of state institutions and the associated mechanisms that states use to control their NOCs. Both of these hypotheses suggest that while NOC managers have a role to play, the actual performance and strategy of NOCs depends mainly on their host governments. A third hypothesis suggests that NOC strategy and performance simply reflect the nature of the resources at hand. Where there are large quantities of “easy” oil and gas to be obtained then adequate performance is not difficult to achieve, but when resources are more scarce and difficult to find and tap then there is a bigger premium on organizing the sector for better performance, such as by opening the country’s oil and gas industry to outside experts or even fully privatizing the enterprise.

These hypotheses overlap and also leave room for many other factors, including management, to play a role. But they help broadly organize this volume. The three cross-cutting chapters in this volume (Chapters 2–4) looked in detail at each of the broad hypotheses. And case studies (Chapters 5–19) examined strategy and performance empirically for a sample of fifteen of the most important NOCs. Those case studies all followed a common framework, reprinted here from Chapter 1 (see Figure 20.1).

Type
Chapter
Information
Oil and Governance
State-Owned Enterprises and the World Energy Supply
, pp. 887 - 928
Publisher: Cambridge University Press
Print publication year: 2011

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