Abstract
Despite a trend toward asset privatization, host governments are retaining ownership over strategically important domestic oil and gas resources, effectively limiting corporate foreign direct investment (FDI). These findings are supported by an analysis of global reserve acquisitions for the period 2000 - 2006, a period which saw listed national oil companies (NOCs) demonstrate a home bias, acquiring over 82% of their reserves domestically, compared to only 25% for commercial operators.Our second contribution uses a cross-sectional analysis for global ownership data to show that state companies control 72% of global oil and gas reserves with commercial companies holding remaining 28%. Findings demonstrate that the variables of political risk, reserve size, and development status influence strategic reserve ownership retention by host NOCs. State ownership attribute has a positive relationship with OPEC membership, country risk, and asset size. Commercial FDI is shown to be constrained to assets in low risk developed countries and marginal oilfield assets.
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