Catching-up with supermajors: the technology factor in building the competitive power of national oil companies from developing economies
The paper investigates the role of technology in the growing
competitive potential of state-controlled national oil companies
(NOCs) from developing countries. The technological development
of NOCs is analyzed in the context of their increasing rivalry with
supermajors, which have dominated the global oil and gas industry
for decades. The author reveals the main features of NOCs’ catch-up
development amid the dynamic changes in the competitive landscape
of the global oil industry. These trends were analyzed against the
background of the current phase of the oil industry’s technological
evolution. The paper concludes that although rapid technological
growth did become a key strategic priority of many NOCs, only
very small group of them managed to achieve equal footing with
traditional industry leaders. For the majority of the remaining NOCs,
the existing limitations related to the policy of their home state did not
allow them to narrow the technological gap with global supermajors.
The compendium of research materials presented at the fifth international conference, organized by Center of Energy Studies, IMEMO RAS and Faculty of International Energy Business of Gubkin Russian State University of Oil and Gas (NRU), focuses on the ongoing transformation of oil and gas markets and adaptation of energy companies, sectors and countries to new challenges caused by the wide range of economic and political factors. Experts of Gubkin Russian State University of Oil and Gas Base Department at IMEMO focus on the analysis of the US unconventional hydrocarbon sector dynamics, risks related to the peak of global demand for oil, new forms of competition of oil and gas exporters for market niches, tendencies of small scale LNG development, corrections in the long-term strategies of energy companies.
The article explores the key trends in R&D and innovation activities of the world’s largest oil & gas companies through the lens of dynamic shifts taking place in the competitive landscape of the global energy sector. The first area, where the author sees significant changes, relates to the appearance of the new powerful players in the technological domain of the world oil and gas industry. He draws attention to the growing roles of national oil companies and multinational oilfield service firms as increasingly important investors in R&D and innovations. These developments are analyzed in the context of the overall competitive positioning of Western-based supermajors whose technological dominance in the industry has never seriously been challenged before. Another significant change, noticed by the author, relates to the new technological priorities set by the world’s largest oil & gas companies for the foreseeable future. Two major sets of technologies are becoming increasingly important as strategic areas for investment by the industry giants. One of them, low-carbon technologies, reflects the dramatic evolution of the ‘Big Oil’ attitude to the so-called Energy transition. In contrast to a largely negativist (or at best ‘window-dressing’) approach to climate agenda, visible just a decade ago, most oil & gas giants have recently adopted individual low-carbon strategies driven to a large extent by the significantly increased pressure from the powerful institutional investors and the growing influence of the negative public opinion. The second top technological priority relates to the changing digital agenda in the oil and gas industry. It reflects the transition of the industry leaders to the next generation digital technologies (including internet of things, artificial intelligence, machine learning and robotics) but most importantly to a systemic approach in digital transformation contrasting with traditional ‘piecemeal’ IT projects with limited operations coverage. The changing innovation management mechanisms are also considered by the author as one of the key trends in technological domain of the world oil and gas industry. Specific focus is devoted to the formation of the corporate innovation ecosystems, including various R&D and innovation collaborations with different innovation actors (business partners, professional research centers, universities and governments organizations) and the connected vast spread of open innovation-based instruments working within these alliances.
This paper considers operating and capital expenditures of public and private oil-producing companies as factors that underlie the competitiveness of enterprises. The purpose of the study is to (1) assess the competitiveness of specific producing companies (Iraq National Oil Company, Kuwait Petroleum Corporation, Qatar Petroleum, Saudi Aramco, ADNOC, ExxonMobil, Total, Royal Dutch Shell, OAO Rosneft, OAO Lukoil); (2) compare private and state oil and gas companies for the period from 2000 to 2013; and (3) form a conclusion about the competitive advantages of these companies. Panel data on production, export and expenditures of 10 oil-producing companies have been used to estimate the cost equation by means of ordinary and median fixed-effect regression. Based on these estimates, the authors have compiled rankings of companies on the competitive advantages from the standpoint of operating and capital costs separately. According to the obtained estimates, Arab companies have the smallest level of operating and capital costs when adjusted for the volume and the structure of production, which can be interpreted as their competitive advantage over their Western and Russian peers. The results of the work are aimed at improving the transparency of the global energy sector and, according to the authors, may be useful to Russian oil and gas companies’ management and global oil market researchers, especially in the current period of stagnation resulting from the recent drop of oil prices.
By means of simple AN-model of economic growth and stepwise refinement of technical progress (A), modelling of two-century transition process to Great |Divergence (nineteenth century and the first half of the twentieth century), then—from Divergence to Convergence (second half of the twentieth century), and at last, to the acceleration of convergence in the early twenty-first century. The forecast, calculated after this model reveals that Great Convergence will occur by 2050 and the world center of production of goods and services will shift again to China, India and other Asian countries, like it was in pre-industrial era.
The monograph analyses the world oil market transformation across the entire value-added chain. The study focuses on the following issues: the role of financial market in the US tight oil sector development under different oil price environment; adjusting corporate strategies of the world largest private vertically integrated oil companies to new market demands; functional role of global oil traders at the world oil market; world refining transformation under the influence of «shale revolution» and oil demand shift towards Asia Pacific region; restructuring of global flows of crude oil and petroleum products in accordance with the new demand-supply configuration; correction in the globalization strategy of the national state company Petrobras (Brazil); perspectives of passenger car transport electrification in India.
The paper examines the structure, governance, and balance sheets of state-controlled banks in Russia, which accounted for over 55 percent of the total assets in the country's banking system in early 2012. The author offers a credible estimate of the size of the country's state banking sector by including banks that are indirectly owned by public organizations. Contrary to some predictions based on the theoretical literature on economic transition, he explains the relatively high profitability and efficiency of Russian state-controlled banks by pointing to their competitive position in such functions as acquisition and disposal of assets on behalf of the government. Also suggested in the paper is a different way of looking at market concentration in Russia (by consolidating the market shares of core state-controlled banks), which produces a picture of a more concentrated market than officially reported. Lastly, one of the author's interesting conclusions is that China provides a better benchmark than the formerly centrally planned economies of Central and Eastern Europe by which to assess the viability of state ownership of banks in Russia and to evaluate the country's banking sector.
The paper examines the principles for the supervision of financial conglomerates proposed by BCBS in the consultative document published in December 2011. Moreover, the article proposes a number of suggestions worked out by the authors within the HSE research team.