The Welfare Implications of Oil Privatisation: A Cost-Benefit Analysis of Norway’s Statoil
The oil industry is of great economic significance to many countries, and privatisations of National Oil Companies (NOCs) have often been controversial, as have been the benefits from privatisation more generally. We conduct a social cost-benefit analysis of the partial privatisation of Norway’s Statoil and estimate net present welfare improvements of at least NOK 166 billion (US$18.4 billion) in 2001 money, which amounts to 11% of Norway’s GDP in that year. Savings on investment costs are the most important source of efficiency improvements, and two thirds of the overall benefits accrue at fellow stakeholders in Statoil-led operations. The state manages to capture 66% of the total welfare gain, with the remainder going to private shareholders and no changes to consumer surplus. It is shown that benefits from partial privatisation can be substantial, particularly if ownership change is supported by additional restructuring measures, and that privatisation can be structured with state involvement at several levels, aiming to maximise the public share of benefits.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jones, Steven L. & Megginson, William L. & Nash, Robert C. & Netter, Jeffry M., 1999. "Share issue privatizations as financial means to political and economic ends," Journal of Financial Economics, Elsevier, vol. 53(2), pages 217-253, August.
- Richard Green & Tanga McDaniel, 1998.
"Competition in electricity supply: will ‘1998’ Be worth it?,"
Institute for Fiscal Studies, vol. 19(3), pages 273-293, August.
- Green, Richard & McDaniel, Tanga, 1998. "Competition in Electricity Supply: Will '1998' be Worth it?," CEPR Discussion Papers 1814, C.E.P.R. Discussion Papers.
- Dam, Kenneth W, 1974. "The Evolution of North Sea Licensing Policy in Britain and Norway," Journal of Law and Economics, University of Chicago Press, vol. 17(2), pages 213-63, October.
- Domah, P. & Pollitt, M.G., 2000. "The Restructuring and Privatisation of Electricity Distribution and Supply Businesses in England and Wales: A Social Cost Benefit Analysis," Cambridge Working Papers in Economics 0007, Faculty of Economics, University of Cambridge.
- Mark A. Moore & Anthony E. Boardman & Aidan R. Vining & David L. Weimer & David H. Greenberg, 2004. "“Just give me a number!” Practical values for the social discount rate," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 23(4), pages 789-812.
- Welch, Ivo, 1989. " Seasoned Offerings, Imitation Costs, and the Underpricing of Initial Public Offerings," Journal of Finance, American Finance Association, vol. 44(2), pages 421-49, June.
- Pollitt, M. & Smith, A.S.J., 2001.
"The Restructuring and Privatisation of British Rail: Was it really that bad?,"
Cambridge Working Papers in Economics
0118, Faculty of Economics, University of Cambridge.
- Michael G. Pollitt & Andrew S. J. Smith, 2002. "The restructuring and privatisation of British Rail: was it really that bad?," Fiscal Studies, Institute for Fiscal Studies, vol. 23(4), pages 463-502, December.
- William L. Megginson & Robert C. Nash & Jeffry Netter & Adam L. Schwartz, 2000. "The Long-Run Return to Investors in Share Issue Privatizations," Financial Management, Financial Management Association, vol. 29(1), Spring.
- Richard Bozec & Mohamed Dia & Gaétan Breton, 2006. "Ownership-efficiency relationship and the measurement selection bias," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 46(5), pages 733-754.
- Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, June.
- Leroy P. Jones & Pankaj Tandon & Ingo Vogelsang, 1990. "Selling Public Enterprises: A Cost/Benefit Methodology," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262600625, June.
- Boardman, Anthony E & Vining, Aidan R, 1989. "Ownership and Performance in Competitive Environments: A Comparison of the Performance of Private, Mixed, and State-Owned Enterprises," Journal of Law and Economics, University of Chicago Press, vol. 32(1), pages 1-33, April.
- Wolf, C. & Pollitt, M.G., 2008. "Privatising national oil companies: Assessing the impact on firm performance," Cambridge Working Papers in Economics 0811, Faculty of Economics, University of Cambridge.
- Jeffry M. Netter & William L. Megginson, 2001. "From State to Market: A Survey of Empirical Studies on Privatization," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 321-389, June.
- Anthony E. Boardman & Claude Laurin & Mark A. Moore & Aidan R. Vining, 2009. "A Cost-Benefit Analysis of the Privatization of Canadian National Railway," Canadian Public Policy, University of Toronto Press, vol. 35(1), pages 59-83, March.
- Nandini Gupta, 2005. "Partial Privatization and Firm Performance," Journal of Finance, American Finance Association, vol. 60(2), pages 987-1015, 04.
- Juliet D'souza & William L. Megginson, 1999. "The Financial and Operating Performance of Privatized Firms during the 1990s," Journal of Finance, American Finance Association, vol. 54(4), pages 1397-1438, 08.
- Newbery, David M & Pollitt, Michael G, 1997. "The Restructuring and Privatization of Britain's CEGB--Was It Worth It?," Journal of Industrial Economics, Wiley Blackwell, vol. 45(3), pages 269-303, September.
When requesting a correction, please mention this item's handle: RePEc:cam:camdae:0912. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jake Dyer)
If references are entirely missing, you can add them using this form.