Thread by @Jarushub

Knowledge Share: NOCs vs IOCs

NOC means National Oil Company and is the state owned oil company of a country. While most countries have just one (eg Nigeria=NNPC), some have multiple NOCs eg China (SINOPEC, CNOOC, PetroChina) & Russia (Rosneft, Gazprom)

You don't need to officially be an oil producing nation before you have an NOC. Ghana established GNPC in 1983 but officially became oil producing in 2010.

Most countries have NOCs but some countries have fully or partially privatized their own. Also, some of the NOCs were

not originally established by govt but were nationalised at some point. For example, BP was originally a private company (one of the offshoots of Rockefeller's Standard Oil) but it was nationalised by British govt at some point to become British NOC.

British govt later privatised it again. So UK does not have an NOC any more. Also, Aramco, the most successful NOC and the world's most profitable company, was not started by Saudi govt (also has its origin in Rockefeller's Standard Oil) but it was nationalized at some point

and it remains so, although Saudi govt sold some of its shares in 2019. Other popular NOCs include Malaysia's Petronas, Venezuela's PDVSA, Angola's SONANGOL, Brazil's Petrobras, Mexico's PEMEX, UAE's ADNOC, Iran's NIOC,Kuwait's KPC,Algeria's SONATRACH, &Norway's Equinox (Statoil)

While some, like Equinox and Aramco, are no longer 100% state owned, the government still owns vast majority and the companies are still regarded as NOC.

NOCs hold the oil reserves on behalf of government. More than 70% of world reserves are held by NOCs.

IOC on the other hand means international oil company. While the term just means oil companies operating across multiple nations, it is usually used for the 6 biggest non-state

oil supermajors: Shell, Chevron, ExxonMobil, Total, BP and ConocoPhilips. They jointly hold more than 15% of world oil reserves.

IOCs mostly partner with the NOCs (being reps of government) for the development of petroleum resources in their countries, although some countries,

like Saudi, don't allow foreign participation in their oil production sector (they now allow for gas and are talking of opening for oil too).

Apart from these 2 categories of players in the global oil&gas industry, there are other categories like independents, which are smaller

CAREER HEAD TO HEAD: NOCs vs IOCs

1. Job security

IOCs are quicker to react to oil industry volatility than NOCs. So they are quicker to lay-off. Many NOCs especially those of Middle East and Africa see themselves as first a national treasure for its citizens before business

so they are more generous with their staff. Aramco has a floor/department that it posts non-performing staff, especially citizens, just to keep their job.

Verdict: NOC > in job security

2. Remuneration

IOCs are run like private companies. They are generally more business-like. They remunerate better.

Verdict: IOC >

3. Work-Life Balance

Oil industry generally has a decent work-life integration. No much difference between NOCs and IOCs

Verdict: Tie

4. Ease of entry

IOCs are generally more equal-opportunity recruiters and have more standardised recruitment processes. While some NOCs, like Aramco, are also trying in this regard (Aramco interviewed a friend from Lagos here, despite not being a Saudi citizen and just applying

from here), the state grip still tells in some cases with quota for citizens.

Verdict: IOCs >

5. Village value

NOCs have more village value. The way everybody in Nigeria expects anyone working in NNPC to be moneybag tells the story. Same in many countries with NOCs