{ "title": "National Oil Companies Are Economic Giants", "sourceUrl": "https://www.imf.org/en/publications/fandd/issues/2019/12/national-oil-companies-need-more-transparency-manley", "canonical": "https://www.imf.org/en/publications/fandd/issues/2019/12/national-oil-companies-need-more-transparency-manley", "overlayPath": "/en/publications/fandd/issues/2019/12/national-oil-companies-need-more-transparency-manley/index.md", "summary": "It’s time for more transparency in the management and governance of national oil companies, says Natural Resource Governance Institute (NRGI)", "sections": [ { "heading": "Overview", "content": "- National oil companies (NOCs) control at least $3 trillion in assets and produce most of the world’s oil and gas.\n- NOCs dominate energy production in countries including the Islamic Republic of Iran, Mexico, Saudi Arabia, and Venezuela, and play central roles in many emerging producers.\n- NOCs are poorly understood because of uneven financial reporting and limited scrutiny of the policies governments employ to manage them." }, { "heading": "Limited transparency and reporting findings", "content": "- For the most data-rich year covered by the National Oil Company Database (2015), only 20 of the 71 NOCs studied published information sufficient to populate all 10 of the database’s “key indicators.”\n- Information availability:\n - Production and revenue: available for most NOCs.\n - Capital expenditure or employment: reported by less than half of NOCs studied.\n- Regional disclosure: On average, NOCs in the Middle East and sub-Saharan Africa disclosed the least amount of information.\n- Resource Governance Index result: 62 percent of the NOCs reviewed exhibited “weak,” “poor,” or “failing” performance in regard to public transparency.\n- NOC dependence and transfers:\n - At the peak of the oil price boom in 2013, there were at least 25 “NOC-dependent” countries where the NOC collects funds equivalent to 20 percent or more of government revenues.\n - The median NOC in the sample transferred only 17 percent of its gross revenues to the state in 2015.\n- Audited financial statements: In 2013, companies responsible for 57 percent of global NOC oil and gas production did not publish independently audited financial statements." }, { "heading": "Debt, leverage, and fiscal risk", "content": "- Examples of high debt and leverage:\n - Petróleos de Venezuela, S.A.: carries very large amounts of debt and is currently unable to service part of its $35 billion in debt.\n - Angola’s Sonangol: debts exceed 20 percent of the country’s GDP.\n - Mexico’s Pemex: had more than $100 billion in debt on its balance sheet by the end of 2018.\n - Rosneft and the United Arab Emirates’ TAQA: described as highly leveraged.\n- Types of NOC borrowing:\n - Bank loans (example: Ghana National Petroleum Corporation).\n - Oil-backed loans from other NOCs or traders (example: Kazakhstan’s KazMunayGas).\n - Loans from another government entity (example: Algeria’s Sonatrach borrows from the country’s central bank).\n - Issuance of corporate bonds (example: Russia’s Rosneft).\n- Public reporting inconsistency: NOC debts are included in public debt figures for some countries (Mexico and Venezuela) but not for others (Bolivia or Brazil), creating opacity in fiscal risk assessment.\n- Structural risk: When a dominant NOC is essentially too big to fail, governments may be on the hook for NOC-incurred debts even when not formally guaranteed by the state." }, { "heading": "NOCs and societal roles; productivity insights", "content": "- NOC typology and roles:\n - Profit seekers prioritizing commercial efficiency.\n - Cash cows focused on collecting revenues from private operators.\n - “State supplement NOCs” providing fuel subsidies, creating jobs, and providing social services.\n - Many NOCs perform multiple roles simultaneously.\n- Labor productivity findings (building on Victor 2007):\n - Chart analysis indicates that, on average, the larger the NOC labor force, the less productive that labor force is in purely commercial terms (production per employee).\n - Publicly listed NOCs exhibit higher production per employee than unlisted counterparts of similar size.\n - Low labor productivity often corresponds to companies undertaking greater state supplement roles (example: Ukraine’s Naftogaz providing subsidized energy)." }, { "heading": "Energy transition prospects and risks", "content": "- Current revenue dependence on fossil fuels:\n - In 2015, the median NOC in the sample relied on oil and gas sales for 96 percent of its total revenues.\n- NOC movement toward renewables:\n - Some NOCs from Colombia to Nigeria to Saudi Arabia have started investing in renewable energy.\n - Potential strengths for NOCs in transition: employ well-educated professionals, experience managing complex projects with international partners, and integration in fuel and power supply systems.\n- Reasons for skepticism:\n - Size of fossil-fuel rents, bespoke skills and technologies of the sector, and entrenched political interests pose obstacles to NOC transformation.\n- Wealth concentration and stranded-asset risk:\n - NOCs in Azerbaijan, Bolivia, Kuwait, Qatar, and Venezuela control more than 2.5 percent of total national wealth (a measure combining produced capital, natural capital, human capital, and net foreign assets).\n - Energy transition could increase risks that NOC expenditures on oil exploration and production become economically unviable, potentially creating “stranded nations” that continue heavy sector spending without viable alternatives.\n- Opportunity costs: Many NOCs spend most of the money they collect rather than transferring revenues to the treasury for public sector investments." }, { "heading": "Urgent reform priorities and policy recommendations", "content": "- Strategic clarity:\n - NOCs and their governments should ensure company strategies outline a sustainable vision for their futures, facilitating clear rules on allowed spending, borrowing, and transfers to the government treasury.\n- Reporting and transparency:\n - Citizens and governments need better reporting from NOCs, including consistent reporting on spending, production costs, and revenues to separate public relations claims from reality.\n- IMF role:\n - The IMF could play a more active role by routinely requiring the disclosure of audited annual accounts for NOCs (and other large state-owned enterprises) as part of its surveillance mandate.\n - The IMF should provide clearer guidance on when countries should include NOCs in public accounts, given the multiple roles many NOCs play.\n- Climate and transition disclosures:\n - NOCs should assess and disclose how prepared they are for energy transition, including analyses of climate-related risks to upstream activities and progress in diversifying and mitigating risks." }, { "heading": "Authors", "content": "- DAVID MANLEY, senior economic analyst, Natural Resource Governance Institute (NRGI).\n- DAVID MIHALYI, senior economic analyst, NRGI; visiting fellow, Central European University’s School of Public Policy.\n- PATRICK R. P. HELLER, advisor, NRGI; senior visiting fellow, Center on Law, Energy and Environment, University of California, Berkeley.\n\nNational Oil Companies Are Economic Giants – IMF F&D | DECEMBER 2019\n\n---\n\n Content in this bundle\n\n- عمالقة مستترون\n - عمالقة مستترون (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - عمالقة مستترون (PDF){rel=\"external\" type=\"application/pdf\"}\n- Gigantes ocultos ● Finanzas y Desarrollo ● Diciembre de 2019\n - Gigantes ocultos ● Finanzas y Desarrollo ● Diciembre de 2019 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Gigantes ocultos ● Finanzas y Desarrollo ● Diciembre de 2019 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Géants cachés\n - Géants cachés (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Géants cachés (PDF){rel=\"external\" type=\"application/pdf\"}\n- National Oil Companies Are Economic Giants – IMF F&D | DECEMBER 2019\n - National Oil Companies Are Economic Giants – IMF F&D | DECEMBER 2019 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - National Oil Companies Are Economic Giants – IMF F&D | DECEMBER 2019 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Незримые гиганты – Финансы и развитие – декабрь 2019 года\n - Незримые гиганты – Финансы и развитие – декабрь 2019 года (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Незримые гиганты – Финансы и развитие – декабрь 2019 года (PDF){rel=\"external\" type=\"application/pdf\"}\n- National Oil Companies Are Economic Giants – IMF F&D | DECEMBER 2019\n - National Oil Companies Are Economic Giants – IMF F&D | DECEMBER 2019 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - National Oil Companies Are Economic Giants – IMF F&D | DECEMBER 2019 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/fandd/issues/2019/12/national-oil-companies-need-more-transparency-manley" } ], "bullets": [ "[Markdown version](/en/publications/fandd/issues/2019/12/national-oil-companies-need-more-transparency-manley/index.md)", "[Structured JSON version](/en/publications/fandd/issues/2019/12/national-oil-companies-need-more-transparency-manley/index.json)", "[Bundle manifest](/en/publications/fandd/issues/2019/12/national-oil-companies-need-more-transparency-manley/bundle-manifest.json)", "Authors: DAVID MANLEY, DAVID MIHALYI, PATRICK RP HELLER", "Published: December 1, 2019", "National oil companies (NOCs) control at least $3 trillion in assets and produce most of the world’s oil and gas.", "NOCs dominate energy production in countries including the Islamic Republic of Iran, Mexico, Saudi Arabia, and Venezuela, and play central roles in many emerging producers.", "NOCs are poorly understood because of uneven financial reporting and limited scrutiny of the policies governments employ to manage them.", "For the most data-rich year covered by the National Oil Company Database (2015), only 20 of the 71 NOCs studied published information sufficient to populate all 10 of the database’s “key indicators.”", "Information availability:", "Regional disclosure: On average, NOCs in the Middle East and sub-Saharan Africa disclosed the least amount of information.", "Resource Governance Index result: 62 percent of the NOCs reviewed exhibited “weak,” “poor,” or “failing” performance in regard to public transparency.", "NOC dependence and transfers:", "Audited financial statements: In 2013, companies responsible for 57 percent of global NOC oil and gas production did not publish independently audited financial statements.", "Examples of high debt and leverage:", "Types of NOC borrowing:", "Public reporting inconsistency: NOC debts are included in public debt figures for some countries (Mexico and Venezuela) but not for others (Bolivia or Brazil), creating opacity in fiscal risk assessment.", "Structural risk: When a dominant NOC is essentially too big to fail, governments may be on the hook for NOC-incurred debts even when not formally guaranteed by the state.", "NOC typology and roles:", "Labor productivity findings (building on Victor 2007):", "Current revenue dependence on fossil fuels:", "NOC movement toward renewables:", "Reasons for skepticism:", "Wealth concentration and stranded-asset risk:", "Opportunity costs: Many NOCs spend most of the money they collect rather than transferring revenues to the treasury for public sector investments.", "Strategic clarity:", "Reporting and transparency:", "IMF role:", "Climate and transition disclosures:", "DAVID MANLEY, senior economic analyst, Natural Resource Governance Institute (NRGI).", "DAVID MIHALYI, senior economic analyst, NRGI; visiting fellow, Central European University’s School of Public Policy.", "PATRICK R. P. HELLER, advisor, NRGI; senior visiting fellow, Center on Law, Energy and Environment, University of California, Berkeley.", "**عمالقة مستترون**", "**Gigantes ocultos ● Finanzas y Desarrollo ● Diciembre de 2019**", "**Géants cachés**", "**National Oil Companies Are Economic Giants – IMF F&D | DECEMBER 2019**", "**Незримые гиганты – Финансы и развитие – декабрь 2019 года**", "**National Oil Companies Are Economic Giants – IMF F&D | DECEMBER 2019**" ], "related": [ { "title": "عمالقة مستترون", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/fandd/article/2019/december/ar/manley.pdf", "summary": { "path": "/-/media/files/publications/fandd/article/2019/december/ar/manley.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/fandd/article/2019/december/ar/manley.pdf", "mime": "application/pdf" } }, { "title": "Gigantes ocultos ● Finanzas y Desarrollo ● Diciembre de 2019", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/fandd/article/2019/december/es/national-oil-companies-need-more-transparency-manley.pdf", "summary": { "path": "/-/media/files/publications/fandd/article/2019/december/es/national-oil-companies-need-more-transparency-manley.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/fandd/article/2019/december/es/national-oil-companies-need-more-transparency-manley.pdf", "mime": "application/pdf" } }, { "title": "Géants cachés", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/fandd/article/2019/december/fr/national-oil-companies-need-more-transparency-manley.pdf", "summary": { "path": "/-/media/files/publications/fandd/article/2019/december/fr/national-oil-companies-need-more-transparency-manley.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/fandd/article/2019/december/fr/national-oil-companies-need-more-transparency-manley.pdf", "mime": "application/pdf" } }, { "title": "National Oil Companies Are Economic Giants – IMF F&D | DECEMBER 2019", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/fandd/article/2019/december/national-oil-companies-need-more-transparency-manley.pdf", "summary": { "path": "/-/media/files/publications/fandd/article/2019/december/national-oil-companies-need-more-transparency-manley.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/fandd/article/2019/december/national-oil-companies-need-more-transparency-manley.pdf", "mime": "application/pdf" } }, { "title": "Незримые гиганты – Финансы и развитие – декабрь 2019 года", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/fandd/article/2019/december/ru/national-oil-companies-need-more-transparency-manley.pdf", "summary": { "path": "/-/media/files/publications/fandd/article/2019/december/ru/national-oil-companies-need-more-transparency-manley.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/fandd/article/2019/december/ru/national-oil-companies-need-more-transparency-manley.pdf", "mime": "application/pdf" } }, { "title": "National Oil Companies Are Economic Giants – IMF F&D | DECEMBER 2019", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/fandd/article/2019/december/zh-do-not-use-rekia/national-oil-companies-need-more-transparency-manley.pdf", "summary": { "path": "/-/media/files/publications/fandd/article/2019/december/zh-do-not-use-rekia/national-oil-companies-need-more-transparency-manley.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/fandd/article/2019/december/zh-do-not-use-rekia/national-oil-companies-need-more-transparency-manley.pdf", "mime": "application/pdf" } } ], "alternates": { "markdown": "/en/publications/fandd/issues/2019/12/national-oil-companies-need-more-transparency-manley/index.md", "json": "/en/publications/fandd/issues/2019/12/national-oil-companies-need-more-transparency-manley/index.json", "bundleManifest": "/en/publications/fandd/issues/2019/12/national-oil-companies-need-more-transparency-manley/bundle-manifest.json" }, "generatedAtUtc": "2026-09-15T05:33:27.169Z" }