NOCs outweigh the supermajors

Offshore staff

HOUSTON -- With the demand for energy increasing by the day, international operating companies need to adjust their view of the world's national oil companies (NOCs). James Mulva, chairman and CEO of ConocoPhillips told participants at a Rice University forum the influence of NOCs is growing.

"Energy consumers have failed to grasp the transformation that has taken place on the global scene," Mulva said.

One often overlooked fact, according to Mulva, is that the NOCs of the world hold enormous reserves. Fourteen of the Top 20 oil and gas companies in the world are NOCs, Mulva said, and NOCs make up the Top 10 resource holders in the world. "Compared to NOCs, 'big oil' is not so big," he said.

Each NOC is driven by different motivators, Mulva said, with different political goals and different objectives. So, dealing with NOCs is a challenge.

"The one-size-fits-all approach is not useful." Despite that challenge, Mulva says, there is immense opportunity. "We have to think outside the box," he said, to take advantage of those opportunities.

More significantly, the US needs to come to grips with the fact that there is a critical need to work with NOCs. "Energy policies, particularly in the US, are out of synch with the realities of the global energy market," Mulva said, pointing to a double standard that encourages US companies to invest outside the country, while opposing the investment of other companies, such as China, in the US.

Speaking on behalf of ConocoPhillips, Mulva said, "We believe as a company that it's unrealistic to believe the US can become independent." The nation has to readjust its thinking, he said, and encourage energy interdependence.

"We have to extend our hand as a nation to welcome appropriate foreign investment," Mulva said.

3/1/2007