The Changing Relationship between NOCs and IOCs in the LNG Chain
Relationships between National Oil Companies (NOCs) and International Oil Companies (IOCs) have changed over the past twenty years as NOCs have broadened their activities to include exerting greater influence on managing their countries’ resources, the selection of which IOCs should participate in LNG projects and more involvement in the development of LNG project structures. In response, IOCs have had to re-focus in order to meet the NOCs’ new requirements. The traditional model whereby IOCs managed the development of the whole LNG chain, usually using their own human and financial resources, supported by the NOC, may still be the case for some LNG projects in the early stage of a country’s LNG development, but not for the more mature NOCs. When an NOC has gained experience in developing LNG projects, there is a drive by the NOC to have a greater involvement (economic, organisational and physical) in project development and operations, usually resulting in less IOC involvement along the LNG chain. This greater involvement means additional risk to the NOC which some government companies may not wish to take. Some NOCs have therefore been more active in making this move and others, for political reasons, have been slower.