First came a report that Iran has banned the production of gasoline-powered cars.
Then came a report that two of the world’s oil majors are swapping their interest in the heavy oil of Venezuela for the tar sands of Canada.
And finally came a curious little financial markets commentary on the changing status of NOCs and IOCs.
Last first, to save readers worrying too much about alphabet soup. NOCs are national oil companies. IOCs are international oil companies.
According a report written by an executive of the international credit rating agency Moody’s Investor Services, and carried in Gulf News, there is a fundamental change evolving in the relationship between IOCs and NOCs.
Until now IOCs, such as ExxonMobil, BP and Chevron, dominated the petroleum world because they had the skills, technology, management and backing of financial markets to make things happen in the oil patch. All they lacked was oil reserves in the ground.
The NOCs, while important because they had their feet on vast pools of undeveloped oil, played a lower-key role, largely because they are government controlled, not rated by the finance world, and lacked the skills to make things happen, such as getting more oil out of the ground to satisfy a thirsty world market.
Moody’s reckons this is changing. It argues that the NOCs are becoming much more sophisticated, and are about to enter the world financial stage to raise more capital and debt to help expand their operations.
The NOCs are also starting to work more closely with the IOCs – an example is BP’s re-entry into Libya.
The message from Moody’s is that if BP can do a deal in Libya, and if the NOCs have the reserves, and the IOCs have the expertise, then logic demands that more deals be done – even if it also means Arab logic and Western-world logic finding common ground, which is a big ask.
A similar picture of the industry seeking a way to urgently expand oil production is emerging in Canada, where ExxonMobil and Chevron are shifting their focus to tar sands after being booted out of Venezuela.
At the latest count more than $US100 billion has been earmarked for projects designed to extract liquids from the tar sands of Alberta, which are estimated to contain at least 174 billion barrels of oil.
The question, as it always has been with tar sands, is the cost of extraction, which a study by a US investment bank, Friedman, Billings, Ramsey Group, estimates to have risen to $US54 a barrel, a rise of 16% in a year.
But, with Venezuela off limits to all but the bravest, and the oil price staying above $US70 a barrel, the majors are all Canada bound.
Iran’s ban on gasoline cars, is perhaps the most interesting of all because it is a sign that the totalitarian mullahs are really starting to lose their grip on reality.
A shortage of gasoline in a country which ranks in the top three in terms of world oil reserves is a farce of the first order.
But, it is a farce which has the potential to destabilise Iran, with all of the consequences that flow from that.
If events continue to turn sour in Iran, and a few riots over gasoline shortages could be just the start of more widespread civil unrest, then world oil markets are in for a most interesting time.
If sanity prevails Iran’s NOC will recognise that it lacks the skills, management and technology to solve the gasoline shortage and will turn to the IOCs for help, in the same way Libya has turned to BP.
As Slugcatcher said, these are big and slow moving events, but they are emerging as factors in re-shaping the petroleum world.
