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Does ownership matter? The performance and efficiency of State Oil vs. Private Oil (1987-2006)

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  • Wolf, Christian
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    Abstract

    This paper investigates the existence of ownership effects in the global oil and gas industry, i.e. whether there are systematic performance and efficiency differentials between National Oil Companies (NOCs) and privately owned International Oil Companies (IOCs). After discussing key issues of comparing 'State Oil' and 'Private Oil', I summarise important trends emerging from the dataset, which covers 1001 firm observation years over the period 1987-2006. Using panel-data regression analysis it is shown that NOCs significantly underperform the private sector in terms of output efficiency and profitability. They also produce a significantly lower annual percentage of upstream reserves, although this may not be an indication of firm efficiency. Overall, this paper suggests that a political preference for State Oil usually comes at an economic cost.

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    Bibliographic Info

    Article provided by Elsevier in its journal Energy Policy.

    Volume (Year): 37 (2009)
    Issue (Month): 7 (July)
    Pages: 2642-2652

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    Handle: RePEc:eee:enepol:v:37:y:2009:i:7:p:2642-2652

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    Web page: http://www.elsevier.com/locate/enpol

    Related research

    Keywords: State ownership Performance Oil and gas;

    References

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    Cited by:
    1. Kurronen, Sanna, 2012. "Financial sector in resource-dependent economies," BOFIT Discussion Papers 6/2012, Bank of Finland, Institute for Economies in Transition.
    2. Frederick Van der Ploeg & Dominic Rohner, 2010. "War and Natural Resource Exploitation," CESifo Working Paper Series 3244, CESifo Group Munich.
    3. Fang, Hong & Wu, Junjie & Zeng, Catherine, 2009. "Comparative study on efficiency performance of listed coal mining companies in China and the US," Energy Policy, Elsevier, vol. 37(12), pages 5140-5148, December.
    4. Brunnschweiler, Christa N. & Valente, Simone, 2011. "International partnerships, foreign control and income levels: theory and evidence," MPRA Paper 34222, University Library of Munich, Germany.
    5. Christa N. Brunnschweiler & Simone Valente, 2013. "Property Rights, Oil and Income Levels: Over a Century of Evidence," Working Paper Series 15613, Department of Economics, Norwegian University of Science and Technology.
    6. Schuster, Philipp & Schmitt, Carina & Traub, Stefan, 2013. "The retreat of the state from entrepreneurial activities: A convergence analysis for OECD countries, 1980–2007," European Journal of Political Economy, Elsevier, vol. 32(C), pages 95-112.
    7. Toft, Peter & Duero, Arash, 2011. "Reliable in the long run? Petroleum policy and long-term oil supplier reliability," Energy Policy, Elsevier, vol. 39(10), pages 6583-6594, October.
    8. Markus Ludwig, . "The Visible Hand: National Oil Companies, Oil Supply and the Ermergence of the Hotelling Rent," Working papers 2012/11, Faculty of Business and Economics - University of Basel.

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