National Oil Companies

Energy sources play a major role in our lives and crude oil tops the list of fossil fuels. It's definitely not possible to use crude oil for all purposes straight after it is has been extracted from the earth's surface. This raw material is converted into a finished product by Top oil companies who are responsible for supplying the crude oil in a more usable form to the end user. Besides handling various functions such as exploring, extracting, producing and supplying oil, these oil companies offer huge employment opportunities. The role of these oil companies in the world oil market is of vital importance as they improve the global economy. The majority of global crude oil production is controlled by none other than government or State owned and regulated National Oil companies.

Out of nearly 20 Top Oil companies, 16 of them are National oil companies and the reserves owned by them are much bigger when compared to those of the International Oil Companies (IOCs) such as Exxon Mobil, Chevron and BP (formerly known as British Petroleum). Some major national oil companies are Saudi Arabian Oil Company (Aramco), National Oil Corporation, Petronas, Petrobras, Oil and Natural Gas Corporation (ONGC), Egyptian General Petroleum Corporation (EGPC). Nearly 60 percent of the undiscovered reserves can be easily accessed by the national oil companies. The major aim of the investor owned or International Oil Companies is to increase its share holder value whereas national oil companies aim at supplying oil at a much lower price than the International Oil Companies, providing employment opportunities, thriving towards developing the economy of the nation.

National Oil Companies are a boon in today's critical situation as a common myth prevails where most of them believe that we are running out of oil and the price is high which will shoot up further in near future. Since the goals of the IOCs are mostly commercial, the price is usually high and they earn huge revenue out of this especially through export. It is believed that the national oil companies or NOC's hold enough proven reserves to meet the growing demand of crude oil. With more exploration, more reserves can be found, thus leading to more oil production. The consumers are bound to pay more for a single barrel of oil and the investor owned or International Oil Companies are hugely benefited due to this. More efficient functioning of the national oil companies could change the situation faced by the consumers at the hands of the IOCs.

As the reserves held by the National oil companies as well as the OPEC countries is increasing, it is believed that they will establish themselves as major oil players in the global oil market. Even the smallest national oil companies that are regulated and controlled by the state government are powerful. Apart from fulfilling the other objectives these companies also keep an eye on the safety of the environment. One advantage these companies have is that the Government gives permission to explore more oil reserves whereas it is quite difficult for the investor owned oil companies to gain access to the unreachable reserves.