Why the NOCs should return to international business development

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NOCs were once big spenders in international upstream business development (BD) but recent activity has slumped. A series of deals gone wrong – exacerbated by the 2014/15 oil price crash – have dampened M&A, with many Asian NOCs, doubling down on the development of local resources. But with M&A valuations attractive – relative to prevailing commodity prices – and financial ratings at all-time highs, the drivers for NOCs to invest in existing portfolios AND fill strategic gaps have never been stronger. Will they step up? In this Insight, we answer the following questions: Chinese NOCs: will they overcome bureucratic red tape to do deals? Asian NOCs: why are they about to reach an inflection point in gas? Middle East NOCs: why are they fast-tracking international expansion? Exploration: what is driving an improvement in NOCs' international performance? M&A: what will the NOCs look to buy?

Table of contents

    • NOCs' international BD spend has slumped
    • The case for international BD remains strong
    • Each NOC's unique mandate creates idiosyncratic drivers
    • Asian and Chinese NOCs look to reduce import reliance
    • Middle East NOCs emerge as major M&A players
    • Africa and Latin America’s NOCs: same goals, different strategies
    • NOCs have the financial strength to fast-track international BD
    • The time is now – acquire or explore?
    • NOCs' international exploration is now delivering double digit returns
    • Success through international M&A has been less evident
    • Today's market has plenty to offer buyers
    • What will the NOCs buy?
    • Will the NOCs actually return to international BD?

Tables and charts

This report includes 22 images and tables including:

  • Drivers and appetite for International BD
  • NOC international BD spend by peer group
  • NOC international BD spend by type
  • NOCs by host country's hydrocarbon import/export status
  • Production indexed to 2024 based on status*
  • Production by NOC peer group
  • Liquids supply and demand gap*
  • Gas supply and demand gap*
  • Asian NOC production
  • Asian NOC production indexed to 2024
  • Middle East NOCs’ recent resource capture
  • Share of international value and reserves by peer group
  • Resources by development status
  • Share of pre-FID resources
  • CoRSI: Platform score
  • Corporate gearing ratio
  • Exploration international value creation by region (2014 - 2023)
  • Exploration international value creation by peer group (2014 - 2023)
  • Implied Long-Term Oil Price (NPV10) paid in M&A by peer group
  • Implied Long-Term Oil Price (deal by deal) vs. Brent oil price
  • NOC international M&A spend by deal type
  • NOC international M&A spend by seller type

What's included

This report contains:

  • Document

    Why the NOCs should return to international business development

    PDF 1.59 MB

  • Document

    Why The Nocs Should Return To International BD SLIDEPACK.pdf

    PDF 958.12 KB