Companies’ production includes oil from both operated and non-operated assets. The Majors hold a relatively small share of total crude oil production globally…

40 mb/d

35

30

25

20

15

10

5

Note: Share of production in joint ventures is split according to the ownership of each company grouping in the joint venture. Source: IEA analysis based on Rystad Energy.

Operator

Majors

Independents

INOCs

NOCs

35

30

25

20

15

10

5

Majors have no interest

Majors have an interest

Just under 78 mb/d of crude oil is produced around the world today (a further 17 mb/d consists of NGLs, including condensates). The NOCs account for just under half of global crude oil production, followed by the

Independents (28%), and Majors and INOCs (both 13%). These volumes include the equity ownership of each company type in upstream projects, even where another company type operates the field (i.e. takes care of day-to-day oilfield operations).

Exploration and new field development are risky and complex processes, so companies often split the equity ownership to spread the risk and reward and to encourage technical and operational collaboration; this arrangement also usually stipulates who will operate the field once it starts production. A common vehicle is for the interested parties to establish a joint venture: these can take many different forms but they generally aim to promote collaboration between the parties and spread the risk while maintaining some level of corporate independence.

A complicating factor when considering “ownership” of barrels is that tax regimes in some countries can transfer ownership of barrels that are produced to the host government, rather than apply a royalty of tax to financial flows. The equity ownership for companies can vary over the lifetime of a field or vary according to external factors such as the oil price.

In 2018, the Majors had equity ownership of around 10 mb/d of crude oil production, but they operated fields that produced around 13 mb/d.

By contrast, the NOCs owned 36 mb/d of production, while they operated fields that produce around 32 mb/d crude oil.

The prevalence of different types of partnerships in the oil and gas industry means that the influence of companies can spread much further than their equity ownership or direct operations. For example, the Majors hold stakes in fields that produce far more than the 10 mb/d crude oil that they own. Around 40% of oil production that is owned by Independents comes from fields in which one of the Majors holds a stake. The figures are lower for INOCs (24%) and NOCS (18%), but these still represent significant volumes.

In total, just under 30 mb/d of global production in 2018 came from fields in which the Majors held some sort of equity stake. In other words, Majors hold some level of influence over three times more global production than they directly own.

This has important potential implications for the Majors’ influence on upstream production practices. For example, co-ordination between the Majors and their partners at all fields in which the Majors have a stake, in favour of using certain practices or technologies, would impact almost three times more production than if they were to be instituted only at fields that the Majors directly own or operate.