I didn't realise that distinction between NOCS and IOCs exist. Can the NOCs work without the IOCs? Are they completely separate or are there other sticky ties...and if so, what are they and how easy are they to break.
Thanks for engaging, its such an interesting perspective. I suppose I'm wondering IF all IOCs were to go (obviously totally hypothetical) how easy / difficult would it be for the NOCs to continue to operate. Assuming the demand remains.
Ultimately im trying to understand how agile the system is and how valid the argument to target the IOCs is.
I'm very pro decarbonisation but i don't think enough people try to understand the existing system. And without doing so it will be very difficult to actually make a change.
For example, I always thought the just stop oil campaign was pure advocacy and lacked any strategy and while very concerned with climate change I never bought it as a meaningful movement...but I didn't realise how weak it was as a concept given this distinction between NOC and IOC. I thought maybe a push back to your piece would be that the NOCs can't survive without the IOCs? So essentially I'm trying to understand that.
Yeah this is a great question. It’s kind of tough to imagine a world where IOCs just go away but if we see massive demand destruction it’s possible not probable. But let’s say we see sweeping legislation in the US that bans IOCs just as a thought experiment.
You’ve got roughly 1/3 of the oil and gas market wiped out over night.
There would be massive disruption but overtime the NOCs would fill that demand. They have the reserves.
Which is why I focus my recommendations on demand destruction. Supply isn’t the issue here.
Exactly what I was wondering - thanks. And like many things, its a question of timing. If the web breaks down but the demand remains, the supply chain WILL be rebuilt over time. The time it will take is dependent on how sticky the web is in the first place.
I didn't realise that distinction between NOCS and IOCs exist. Can the NOCs work without the IOCs? Are they completely separate or are there other sticky ties...and if so, what are they and how easy are they to break.
They absolutely can and do work with one another although the history of that in some places (Chevron in Venezuela, Exxon in Russia) is fraught.
ADNOC and Oxy do work together too. It’s very common.
Thanks for engaging, its such an interesting perspective. I suppose I'm wondering IF all IOCs were to go (obviously totally hypothetical) how easy / difficult would it be for the NOCs to continue to operate. Assuming the demand remains.
Ultimately im trying to understand how agile the system is and how valid the argument to target the IOCs is.
I'm very pro decarbonisation but i don't think enough people try to understand the existing system. And without doing so it will be very difficult to actually make a change.
For example, I always thought the just stop oil campaign was pure advocacy and lacked any strategy and while very concerned with climate change I never bought it as a meaningful movement...but I didn't realise how weak it was as a concept given this distinction between NOC and IOC. I thought maybe a push back to your piece would be that the NOCs can't survive without the IOCs? So essentially I'm trying to understand that.
Yeah this is a great question. It’s kind of tough to imagine a world where IOCs just go away but if we see massive demand destruction it’s possible not probable. But let’s say we see sweeping legislation in the US that bans IOCs just as a thought experiment.
You’ve got roughly 1/3 of the oil and gas market wiped out over night.
There would be massive disruption but overtime the NOCs would fill that demand. They have the reserves.
Which is why I focus my recommendations on demand destruction. Supply isn’t the issue here.
Exactly what I was wondering - thanks. And like many things, its a question of timing. If the web breaks down but the demand remains, the supply chain WILL be rebuilt over time. The time it will take is dependent on how sticky the web is in the first place.
Yeah, and the strait of Hormuz situation shows us the web is incredibly sticky!