2 min read
Arthur D. Little calls for a new cooperation model between the host country and energy companies
<p>Increase transparency to better manage the impact of externalities along the oil industry value chain</p>
With the rise of petronationalism and increasing competition for oil and gas supplies, Arthur D. Little’s latest viewpoint “Building a New Equilibrium” provides insight into the changing face of the industry and how key players, including International Oil Companies (IOCs), National Oil Companies (NOCs), Oil Service Companies (OSCs) and host countries need to co-operate to create and share value to benefit all stakeholders. Key to this is trusted and transparent measurement of externalities – direct, indirect and induced impacts of investment - on the host country’s economy. The last decade has been characterized by three major trends in oil and gas:
- Driven by petronationalism, NOCs have increased in sophistication and size competing with IOCs, while still relying on their technology leadership and superior operational knowledge
- IOCs’ need to access new resources to maintain and increase reserves and production
- Host countries’ governments drive to strive a balance to continue increasing production and reserves while securing a path to societal development and prosperity
This changed landscape requires new thinking on how the relationship between the parties (e.g. IOCs and host countries) is managed. Arthur D. Little believes that building a new equilibrium where the value that each party brings is clear and measurable will deliver a balance that benefits the entire industry. To do this it is necessary to measure externalities through a clear, transparent and tailored approach. Here, Arthur D. Little presents a flexible framework that identifies and measures externalities and societal value generation. This data-driven approach provides management at IOCs, NOCs and host countries with the information needed to manage and direct the delivery of value for all stakeholders. Paolo R. Dutto, Associate Director at Arthur D. Little comments, “Ensuring a reliable, sustainable energy supply is a key challenge for the global economy. Overcoming challenges to achieve this requires co-operation between host countries and international and national oil companies respectively. This new equilibrium can only be built by all sides understanding the quantifiable, long-term value that oil and gas investment brings.” To access the full report, please visit
2 min read
Arthur D. Little calls for a new cooperation model between the host country and energy companies
<p>Increase transparency to better manage the impact of externalities along the oil industry value chain</p>
With the rise of petronationalism and increasing competition for oil and gas supplies, Arthur D. Little’s latest viewpoint “Building a New Equilibrium” provides insight into the changing face of the industry and how key players, including International Oil Companies (IOCs), National Oil Companies (NOCs), Oil Service Companies (OSCs) and host countries need to co-operate to create and share value to benefit all stakeholders. Key to this is trusted and transparent measurement of externalities – direct, indirect and induced impacts of investment - on the host country’s economy. The last decade has been characterized by three major trends in oil and gas:
- Driven by petronationalism, NOCs have increased in sophistication and size competing with IOCs, while still relying on their technology leadership and superior operational knowledge
- IOCs’ need to access new resources to maintain and increase reserves and production
- Host countries’ governments drive to strive a balance to continue increasing production and reserves while securing a path to societal development and prosperity
This changed landscape requires new thinking on how the relationship between the parties (e.g. IOCs and host countries) is managed. Arthur D. Little believes that building a new equilibrium where the value that each party brings is clear and measurable will deliver a balance that benefits the entire industry. To do this it is necessary to measure externalities through a clear, transparent and tailored approach. Here, Arthur D. Little presents a flexible framework that identifies and measures externalities and societal value generation. This data-driven approach provides management at IOCs, NOCs and host countries with the information needed to manage and direct the delivery of value for all stakeholders. Paolo R. Dutto, Associate Director at Arthur D. Little comments, “Ensuring a reliable, sustainable energy supply is a key challenge for the global economy. Overcoming challenges to achieve this requires co-operation between host countries and international and national oil companies respectively. This new equilibrium can only be built by all sides understanding the quantifiable, long-term value that oil and gas investment brings.” To access the full report, please visit