Is politics invading the oil patch? Rating agency says yes

(AXcess News) New York – In a report on major oil companies released Tuesday, the largest threat to the commercial oil patch appears to be state-owned oil with competitive ranking swinging over to national oil companies, or NOCs, over time as the fight for untapped global resources unfolds.

According to Moody’s, major oil companies may have advantages in technology and sufficient capital, but in the long-run its the state-owned oil companies who’ll control more of the market simply because those countries will be less likely to permit outside energy developers from moving in on untapped reserves. That could mean politics will play a larger role in major oil companies futures.


“Despite rising cash flows as a result of higher oil and gas prices and strong refining margins, these companies continue to face formidable reserve replacement, production growth and cost challenges,” says Moody’s Senior VP, Thomas Coleman.

The real issue for these companies in the longer-term, says Coleman, is whether they will be able to retain a differential advantage based on capital resources and technology, and the extent to which the majors’ competitive ranking within the petroleum industry will be gradually eroded by the national oil companies (NOCs).

Axcess News