Introduction

Abstract

The leading theme of this monograph is the role of the state in the economy, and the developing economy in particular, with special emphasis on the role of the state in the oil-producing countries, and the evolution of this role in a dynamic economic environment. This book concentrates on the logic of changing power relations between dominant private and public market players, and the ensuing effect of these changes on the external and internal market organization, in particular the widening gap that private international oil companies and international capital markets drive between the governments of oil-producing countries and their National Oil Companies (NOCs). The pressing need to implement regulatory reforms in the oil sector in the producing countries is demonstrated by the deteriorating performance of the state and their NOCs to run the oil sector efficiently. Furthermore, the international private oil companies’ ability to efficiently produce oil in ‘higher extraction costs’ areas is challenging the NOCs market position. Except for the Middle East, where onshore extraction costs are very low, the extraction cost range has narrowed to $7-$l 1 a barrel in most of the world oil-producing areas. This means that countries such as Venezuela, Mexico, Nigeria, Algeria, Indonesia, etc., and in particular their NOCs, must compete with private international oil companies.