Course: Oil and Gas managementLeonidas Eleftheriadis, Athanasios Pitatzis, Kantartzis ApostolosKavala 2015

MSc Oil and Gas Technology

Eastern Macedonia and Thrace Institute of TechnologySchool of Engineering TechnologyDepartment of Petroleum & Natural Gas Technology

NOCs – IOCs Relationship

Presentation’s Contents• Introduction• Some facts about NOCs – IOCs• Main Hypothesis• China Shale Gas Sector Case

Study• Mexico O&G Industry Case Study • Conclusion

IntroductionIOCs:• The term “international oil companies

(IOCs)” is referring to companies which compete across borders

• The acronym “IOCs” is also used for the “integrated oil companies”, meaning companies which compete in every sector of the oil and gas value chain, from the upstream segment to the midstream and downstream ones

NOCs• Unlike the IOCs, the NOCs are

governmentally controlled and they usually manage a country’s hydrocarbons resources.

• Having been given the privilege to the domestic reserves, the aim of the NOCs is, differently than the IOCs, not monetization, but:

• serving the national interests, • supporting the local economies and • even protecting the territorial environments

Evolution of global upstream industry

Source: Ernst & Young

Some facts about NOCs – IOCs

Main Hypothesis• Our main hypothesis is the

cooperation of the NOCs and IOCs in NOCs’ home countries

China Shale Gas Sector Case Study

Source: U.S. Energy Information Administration

1115/7299=15, 2%

Some facts about China Energy Sector

Natural Gas DemandNatural Gas Supply

China NOCs focus on Shale Gas development

China NOCs and IOCs cooperation on China Shale Gas sector

Mexico O&G Industry Case Study • Until 2013 Petroleos Mexicanos (Pemex –

Mexico NOC) was 75- year monopoly in Mexico oil and gas industry since 1938 when the company was created

• The December of 2013 the Mexico’s congress approved a legislation which liberate and open the Mexico oil and gas sector to foreign companies and allow foreign investments.

• The last decade the oil production in Mexico continuing to decline from 3.85 million bbl/d in 2004 to 2.90 million barrels per day (bbl/d) of total liquids in 2013

Energy reform could increase Mexico’s long-term oil production by 75%

Some facts about Mexico Energy Sector

Mexican Oil ProductionMexican Natural Gas production

Quick take on the new energy sector in Mexico

The new Mexico Oil and Gas Blocks

Future investments on Mexican Energy sector

Source: International

Monetary Fund

Win - Win Situation • PEMEX – IOCs cooperation is

feasible because this effort lead the two parties in a win – win situation.

• Gas demand expected to double • Increased demand from Asia and

Middle-East• Electricity generation accounting 45%

according to IEA• Domestic production covers 60% of

demand• LNG will cover more than 20% of

imports• China, India, Taiwan and Japan the

main LNG importers

Gas Demand

Gas Demand

Qatar LNG Prospect

Qatar partnership and alliances Qatar’s advantages• Geographical position and gas

reserves

ExxonMobil advantages• global functional organisation• strong cash flow• diverse experience

Qatar partnership and alliances

NOCs on decline, IOCs diversify performance for 2013

Conclusion • The future for IOCs and NOCs is

likely one in which they will both compete and co-operate

Any questions?