Imagine that you are an operator of oil company ..
After looking at possible places where we drill our first
wildcat well based on data we gathered, processed and interrupted.
Having located some interesting possibilities in the
exploration of sedimentary basins, it’s now time for you as the
petroleum engineering operator to lease a track of land that would give
you permissions from the owners to actually work on the site.
You’ll need to be able to conduct tests and if signs are positive, you’ll need to be able to develop the area.
The first thing you have to do is to get signed agreements
so you’ll be assured of receiving your profits if there are any.
As an operator, you represent three major oil companies:
- Imdependent oil and gas company :
Non-state owned /private/ non-integrated (they receive nearly all their revenues from oil and gas production).
- International oil company (IOC) :
Non-state owned /private/ integrated.
Together IOC’s control 6% of the world’s oil reserves .
Examples: Exxon Mobil ,Shell-BP-Chevron ,Conoco phillips-Total
- National oil companies (NOC):
They control 88% of world’s oil reserves.
Unlike the independent and international companies, they rarely work outside their countries borders.
Examples: Adnoc –Pemex-Petrochina-Statoil.
Host countries realize that they need the IOC as much as IOC
needs the host.so you can say that relation between host countries or
NOC’s and IOC’s can be described as:
Host countries needs IOC’s with its newer technologies for the long term
success of oil and gas industry and IOC’s needs the oil deposits of the
meaning better results when working together.
So what are the incentive and offers?
Host countries incentives:
- IOC’s technical and managerial expertise.
- Access to IOC’s finances to pay for oil profits.
- High paying jobs for its citizens.
- Social contracts for developing infrastructure.
- Technical and managerial expertise.
- Risk capital for percentage of profits.