Changes in the Operational Efficiency of National Oil Companies
January 25, 2013 | Peter R. Hartley, Kenneth B. Medlock III
Table of Contents
Author(s)
Peter R. Hartley
Baker Institute Rice Faculty Scholar | George A. Peterkin Professor of EconomicsKenneth B. Medlock III
James A. Baker, III, and Susan G. Baker Fellow in Energy and Resource Economics | Senior Director, Center for Energy StudiesTo access the full article, download the PDF here.
Abstract
Using data on 61 oil companies from 2001-09, we examine the evolution of revenue efficiency of National Oil Companies (NOCs) and shareholder-owned oil companies (SOCs). We find that NOCs generally are less efficient than SOCs, but their efficiency increased faster over the last decade. We also find evidence that partial privatizations increase operational efficiency, and (weaker) evidence that mergers and acquisitions during the decade tended to increase the efficiency of the merging firms. Finally, we find evidence that much of the inefficiency of NOCs is consistent with the hypothesis that government ownership leads to different firm objectives.
Published in The Energy Journal.