OT: Petronas boss urges alliances to take on supermajors - State giants 'must close ranks'
Upstream, June 11
National oil companies must link-up to compete against the majors or lose market share in the increasingly competitive industry, the boss of Malaysian state oil company Petronas warned today.
Chairman and chief executive Mohd Hassan Marican said state oil entities can ill afford to be idle anymore while the major oil companies grow larger. "As the dominance of the supermajors grew, it became evident to the governments controlling the state oil companies that the status quo was no longer sufficient," Marican said. "We will need to create formal and informal alliances among ourselves," he added.
Marican was addressing a gathering of over 780 oil officials and company executives in Kuala Lumpur at the sixth Asia Oil and Gas Conference.
The last five years have seen a series of big oil company mergers and alliance that have resulted in the creation of supermajors such as ExxonMobil of the US and the UK's BP, which swallowed Amoco.
Marican said the supermajors now dominate the oil market with their low cost of capital, access to huge untapped resources, and strong technical and development skills. He estimated the combined reserves of Shell, ExxonMobil, BP and TotalFinaElf now amount to 75 billion barrels of oil equivalent, and they control up to 13 million bpd of production - approximately 15% to 20% of global oil supply.
Marican said that in response, national oil company (NOC) alliances may happen over the next five years. He said in Latin America, NOCs like Venezuela's PDVSA, Mexico's Pemex and Brazil's Petrobras could form one group, while China's Petrochina, CNOOC and Sinopec could form another.
Three Asean parties - Pertamina, Petronas and PetroVietnam - have recently signed a memorandum of understanding to co-operate in the upstream sector. |
