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3. New partnership models
Pre-OPEC 1, IOCs had access to equity oil throughout the world; power was based
on access to technology, capital and integrative capability; relatively limited
alignment of interests between IOC and NOC
Production Sharing Contract (PSC) model shifted balance of power in direction of
NOCs - and somewhat improved IOC/NOC alignment
Even in a PSC, alignment is in question, particularly as fields become mature and
returns more marginal:
− Tax-take is the point of friction
− Pressure has increased for sovereign governments/NOCs not to ‘sign away’
reserves
− The wealthier NOCs do not require IOC capital and are reluctant to pay high
returns for it
− IOCs want to book oil & gas reserves and are focused on reserve replacement
− NOCs are primarily interested in capability, now less dependent on IOCs than
pre-OPEC 1
Thus there has been a growing trend for the disintermediation of the IOC
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