Energy Watch: Weak Financials Accelerate Structural Shifts in Global Refining from IOCs like BP, Total amp; Chevron to NOCs

Dennis U. Atuanya submits: In an earlier article, International Oil Companies: The Challenges Ahead, l discussed three broad challenges that International Oil Companies, IOCs, were and still are grappling with. Over the last decade for example, major IOCs have had increasing difficulty to profitable reserves addition. More worrisome for them is the rise of National Oil Companies, NOCs.

The rush to export liquefied natural gas from North American shores will help drive asset deals, mergers and acquisitions in 2013, part of a wave of global consolidation led by cash-flush national oil companies that could see several Canadian companies taken out. Watch for “bigger and bolder” moves by state-run behemoths this year, “as the share of oil and gas consumption by Asian countries continues to rise and pressure on Asian NOCs to ‘go global’ increases,” said Neil Beveridge, a senior analyst at Sanford C. Bernstein in Hong Kong.

China National Petroleum Corp (CNPC) has emerged as the frontrunner to take over Iraq’s West Qurna-1 oilfield from Exxon Mobil, a move that would diminish Western oil influence in Iraq a decade after the U.S.-led invasion. U.S. oil major Exxon is giving up its stake in the giant southern oilfield after clashing with the central government in Baghdad over exploration contracts it had signed with the autonomous Kurdistan region in the north.

By Retracement:With energy demand expected to grow by 50% in the first half of the 21st century, national oil companies [NOCs] are playing an increasingly important role in supplying the world's oil and gas needs.

Dennis U. Atuanya submits: National Oil Companies, NOCs, are seemingly set to define the future of global crude oil supply (and therefore price) levels. Major International Oil Companies, IOCs, have over the past decade, witnessed an increasing difficulty to profitable reserves growth and most have resorted to a series of staff rationalization and divestment.

PetroChina Co., the nation’s biggest oil and gas producer, is looking to make more deals in Australia, adding to about US$3.7-billion in acquisitions as part of a global drive to feed surging Chinese demand. “As one of the key markets in our Asia and Pacific operations, PetroChina is willing to expand our presence in Australia when a good opportunity arises,” Mao Zefeng, a Beijing-based spokesman for the world’s second-biggest energy company by market value, said in an e-mail to Bloomberg.

Evaluate Energy submits:The steady rate at which China’s oil self sufficiency is declining and the unprecedented levels to which it is falling may accelerate the pace of Chinese oil acquisitions in coming years, but it is also leading to new and innovative ways of securing oil supply, according to a new analysis by Evaluate Energy. Despite a flurry of acquisition activity across the world, Chinese government-owned companies have been unable to keep pace with surging domestic oil demand.

Oil refiners in Europe will shut 10% of their plants this decade as fuel demand falls to a 19-year low.