Critical Examination of Qualitative and Quantitative Considerations for Selecting Successful NOC as a Role Model When Restructuring Underperforming NOCs

Abstract

The study presents theoretical and empirical examinations on importance of “National Context” when the restructuring of an underperforming National Oil Company (NOC) is modelled on another country’s NOC that is perceived to have a good governance practice.The major objective of the study relates to a discussion on how the understanding of qualitative and quantitative issues of national context can aid in optimal selection of a governance model.Some main issues of national context examined in the analysis are: level of domestic reserve, production and consumption capacity, level of NOC dominance of the economy, intergenerational equity in resource extraction, population, political and social pressures on NOC, public trust in the State institutions, level of technological development and mineral right laws.The theoretical and empirical evidences for consideration are obtained from secondary sources. However, further analysis and interpretation were made by this study which confirmed that the issue of national context is of strategic importance when the restructuring of NOC is modelled on another country’s NOC. Accordingly, NOCs are national institutions which are affected by the issue of national context. Therefore, any government policy relating to its governance should be one that will serve the overall economy, not a specific interest.The study will serve as a snap guide to policy makers and NOC officials in new oil frontiers especially African and Caspian countries, should the restructuring of their NOCs be modelled on other countries’ NOCs.