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Secret
Text B: The Future of OPEC
Text C: The Era of Oil Abundance
Unit 4
PETROLEUM COMPANY AND ORGANIZATION
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Section 2 text learning (A)
Text Organization
Part1 ():
Part2 (-7):
Part3 (Para. 8-13)
Introduction to NOCs: definition, advantages and problems.
Problems in the national oil company.
In spite of the problems and failures in NOCs, some factors can help.
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Section 2 text learning (A)
Information Analysis
Part 1 (Para. 1) : Introduction to NOCs: definition, advantages and problems.
1. What is national oil company?
National oil company (NOC) is partially or wholly state-owned firms through which governments retain the profits from oil production. (Para. 1)
2. What are the similarities of most state-owned firms?
They are prone to over-staffing, underinvestment, political interference and corruption. (Para. 1)
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Section 2 text learning (A)
Information Analysis
Part 2 (2-7): Problems in the national oil company.
3. Why is it said that PDVSA provides a cautionary tale of how bad they can be? (Para. 3&11)
President Hugo Chávez has forced most foreign oil firms in Venezuela to go into partnership with its national champion. It is now running the resulting joint ventures-presumably no better than it runs its original fields. (Para. 3)
Mr Chávez dictates the laying of pipelines of PDVSA and customers. (Para. 11)
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Information Analysis
4. Why will oil production be more concentrated in
the hands of the national firms of Russia and the Persian Gulf?
Persian Gulf in the future? (Para. 4)
---- decrease of oil production in the open areas
---- largely out of bounds to multinationals
---- not yet thoroughly raked over
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Information Analysis
Section 2 text learning (A)
5. There are some reasons for the failure of
nationalization. What are they? (Para. 5-7)
---- excessive government intervention (over-staffed, instruments of foreign policy, frequently nationalized)(Para. 5)
---- a lack of openness (of enough data to a theory, a full picture of oil ) (Para. 6)
---- underinvestment (politically palatable to reduce drilling programs and seismic surveys) (Para. 7)
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Information Analysis
Section 2 text learning (A)
Part 3 (Para. 8-13): In spite of the problems failures in NOCS, some factors can help.
6. What leads to the inefficiency and corruption of
NOCs?
There are no enough strong institutions to regulate them or to manage the money they generate. (Para. 8)
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Information Analysis
Section 2 text learning (A)
7. What strategies can be helpful for the nationalization?
---- (Saudi Arabian) gradual and friendly takeover helps to preserve institutional memory and an efficient corporate culture. Otherwise …… (Para. 10)
---- Clear strategic guidance goes hand-in-hand with operational autonomy at the best NOCs. (Para. 11)
---- Competition also helps. (Pare. 12)
---- Abundant oil does not seem to be prerequisite to success for a NOC, but seems to do most state-run firms more harm than good. (Para. 13)
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Theme Discussion
How do you understand “Abundant, inalienable oil, on the other hand, seems to do most state-run firms more harm than good”(Para. 13)?
2. China has several NOCs, such as PetroChina,
Sinopec. Do you have some suggestions on their
development?
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Theme Discussion
How do you understand “Abundant, inalienable oil, on the other hand, seems to do most state-run firms more harm than good” (Para. 13)?
Some countries waste money from oil on authority of the state. Without the effective control of the countries over NOCs, many problems will appear, such as inefficiency and corruption. In some areas, private-owned oil companies perform better. So nationalization of oil company is not always a good way to develop oil industry.
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