It's hard to shed a tear for Big Oil. The top five publicly
traded companies racked up a record $119.5 billion profit last year -
roughly the size of Ireland's economy.
Yet these corporations are steadily losing ground to a surging
group of nationally run companies - a trend that could come back to
hurt oil-consuming nations such as the United States, some experts
The risk is that governments that run oil companies will lavish
so much of their oil wealth on social programs and other priorities
that efficiency and investment in new oil fields will suffer.
"We could have a problem down the road because not enough
investment will be made," says Amy Myers Jaffe, an energy expert at
Rice University's Baker Institute for Public Policy in Houston. In
Venezuela, Iran, and Russia "we might see declines in production in
coming years." These countries have huge reserves and state-run
energy sectors with questionable efficiency.
Many forecasters expect that world oil output will continue to
rise, along with demand, in the years ahead. But in this era of
newly resurgent national oil companies - the NOCs, in industry
jargon - any forecasts have a large margin for error.
* Iran, now among the world's leading crude-oil exporters, could
become a net importer of oil within the next decade. The reasons
include both rising demand, driven in part by huge government
subsidies for gasoline, and slow-growing production.
* Venezuela is moving toward tighter national control of its
industry, with President Hugo Chavez saying he wants to share oil
wealth with the country's often- impoverished citizens. But the more
that is spent on social programs, the less remains for investment.
Last year, when Exxon-Mobil was reporting record profits,
Venezuela's PDVSA posted a 26 percent decline in profits, the
* In Russia, the government of Vladimir Putin has stirred up
controversy with its own brand of "resource nationalism." Analysts
say the government pressured Royal Dutch Shell to hand over control
of one major project, on Sakhalin Island, to Russia's Gazprom in
December. As in Venezuela, such moves could strain the confidence of
international oil companies in forming partnerships with Russia.
In a new analysis of the role of national oil companies, Ms.
Jaffe cites stark numbers from the International Energy Agency:
Developing nations, typically with oil fields under state control,
will account for some 90 percent of new hydrocarbon supplies over
the next two decades. …