IDEAS home Printed from https://ideas.repec.org/a/sae/enejou/v34y2013i2p27-58.html
   My bibliography  Save this article

Changes in the Operational Efficiency of National Oil Companies

Author

Listed:
  • Peter R. Hartley
  • Kenneth B. Medlock III

Abstract

Using data on 61 oil companies from 2001-09, we examine the evolution of revenue efficiency of National Oil Companies (NOCs) and shareholder-owned oil companies (SOCs). We find that NOCs generally are less efficient than SOCs, but their efficiency increased faster over the last decade. We also find evidence that partial privatizations increase operational efficiency, and (weaker) evidence that mergers and acquisitions during the decade tended to increase the efficiency of the merging firms. Finally, we find evidence that much of the inefficiency of NOCs is consistent with the hypothesis that government ownership leads to different firm objectives. http://dx.doi.org/10.5547/01956574.34.2.2

Suggested Citation

  • Peter R. Hartley & Kenneth B. Medlock III, 2013. "Changes in the Operational Efficiency of National Oil Companies," The Energy Journal, , vol. 34(2), pages 27-58, April.
    • Handle: RePEc:sae:enejou:v:34:y:2013:i:2:p:27-58
    DOI: 10.5547/01956574.34.2.2
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.5547/01956574.34.2.2
    Download Restriction: no
    File URL: https://libkey.io/10.5547/01956574.34.2.2?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Schmidt, Klaus M, 1996. "The Costs and Benefits of Privatization: An Incomplete Contracts Approach," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 12(1), pages 1-24, April.
    2. Schmidt, Peter & Sickles, Robin C, 1984. "Production Frontiers and Panel Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 367-374, October.
    3. Schmidt, Klaus M., 1996. "Incomplete contracts and privatization," European Economic Review, Elsevier, vol. 40(3-5), pages 569-579, April.
    4. Desai, Anand & Ratick, Samuel J. & Schinnar, Arie P., 2005. "Data envelopment analysis with stochastic variations in data," Socio-Economic Planning Sciences, Elsevier, vol. 39(2), pages 147-164, June.
    5. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
    6. Rajiv D. Banker, 1993. "Maximum Likelihood, Consistency and Data Envelopment Analysis: A Statistical Foundation," Management Science, INFORMS, vol. 39(10), pages 1265-1273, October.
    7. Gong, Byeong-Ho & Sickles, Robin C., 1992. "Finite sample evidence on the performance of stochastic frontiers and data envelopment analysis using panel data," Journal of Econometrics, Elsevier, vol. 51(1-2), pages 259-284.
    8. Cooper, W. W. & Tone, K., 1997. "Measures of inefficiency in data envelopment analysis and stochastic frontier estimation," European Journal of Operational Research, Elsevier, vol. 99(1), pages 72-88, May.
    9. Stacy Eller & Peter Hartley & Kenneth Medlock, 2011. "Empirical evidence on the operational efficiency of National Oil Companies," Empirical Economics, Springer, vol. 40(3), pages 623-643, May.
    10. Christian Wolf & Michael G. Pollitt, 2008. "Privatising national oil companies: Assessing the impact on firm performance," Working Papers EPRG 0805, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    11. Willam Greene, 2005. "Fixed and Random Effects in Stochastic Frontier Models," Journal of Productivity Analysis, Springer, vol. 23(1), pages 7-32, January.
    12. Hartley, Peter & Medlock III, Kenneth B., 2008. "A model of the operation and development of a National Oil Company," Energy Economics, Elsevier, vol. 30(5), pages 2459-2485, September.
    13. Pitt, Mark M. & Lee, Lung-Fei, 1981. "The measurement and sources of technical inefficiency in the Indonesian weaving industry," Journal of Development Economics, Elsevier, vol. 9(1), pages 43-64, August.
    14. Wolf, Christian, 2009. "Does ownership matter? The performance and efficiency of State Oil vs. Private Oil (1987-2006)," Energy Policy, Elsevier, vol. 37(7), pages 2642-2652, July.
    15. Tsionas, Efthymios G., 2003. "Combining DEA and stochastic frontier models: An empirical Bayes approach," European Journal of Operational Research, Elsevier, vol. 147(3), pages 499-510, June.
    16. Cornwell, Christopher & Schmidt, Peter & Sickles, Robin C., 1990. "Production frontiers with cross-sectional and time-series variation in efficiency levels," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 185-200.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. R. Tasmin & M. H. Muazu & A. H. Nor Aziati & N. L. Zohadi, 2020. "The mediating effect of enterprise risk management implementation on operational excellence in the Malaysian oil and gas sector: a conceptual framework," Future Business Journal, Springer, vol. 6(1), pages 1-6, December.
    2. Mason, Charles F. & A. Wilmot, Neil, 2014. "Jump processes in natural gas markets," Energy Economics, Elsevier, vol. 46(S1), pages 69-79.
    3. Corrales, Javier & Hernández, Gonzalo & Salgado, Juan Camilo, 2020. "Oil and regime type in Latin America: Reversing the line of causality," Energy Policy, Elsevier, vol. 142(C).
    4. Jozef Baruník & Evžen KoÄ enda b,a & Lukáš Vácha, 2016. "Volatility Spillovers Across Petroleum Markets," The Energy Journal, , vol. 37(1), pages 136-158, January.
    5. Binlei Gong & Robin C. Sickles, 2021. "Resource allocation in multi-divisional multi-product firms," Journal of Productivity Analysis, Springer, vol. 55(2), pages 47-70, April.
    6. Karanfil, Fatih & Pierru, Axel, 2021. "The opportunity cost of domestic oil consumption for an oil exporter: Illustration for Saudi Arabia," Energy Economics, Elsevier, vol. 96(C).
    7. Gong, Binlei, 2018. "Different behaviors in natural gas production between national and private oil companies: Economics-driven or environment-driven?," Energy Policy, Elsevier, vol. 114(C), pages 145-152.
    8. Sueyoshi, Toshiyuki & Wang, Derek, 2018. "DEA environmental assessment on US petroleum industry: Non-radial approach with translation invariance in time horizon," Energy Economics, Elsevier, vol. 72(C), pages 276-289.
    9. Delalibera, Bruno R. & Serrano-Quintero, Rafael & Zimmermann, Guilherme G., 2023. "Reforms in the natural gas sector and economic development," Economic Modelling, Elsevier, vol. 125(C).
    10. Bruno R. Delaribera & Rafael SerranoQuintero & Guilherme G. Zimmermann, 2023. "Reforms in the Natural Gas Sector and Economic Development," UB School of Economics Working Papers 2023/446, University of Barcelona School of Economics.
    11. Zhang, Qizheng & Qian, Zesen & Wang, Shuo & Yuan, Lingran & Gong, Binlei, 2022. "Productivity drain or productivity gain? The effect of new technology adoption in the oilfield market," Energy Economics, Elsevier, vol. 108(C).
    12. Neil A. Wilmot, 2013. "Cointegration in the Oil Market among Regional Blends," International Journal of Energy Economics and Policy, Econjournals, vol. 3(4), pages 424-433.
    13. Al-Mana, Ali A. & Nawaz, Waqas & Kamal, Athar & Koҫ, Muammer, 2020. "Financial and operational efficiencies of national and international oil companies: An empirical investigation," Resources Policy, Elsevier, vol. 68(C).
    14. Cabrales, Sergio & Bautista, Rafael & Benavides, Juan, 2017. "A model to assess the impact of employment policy and subsidized domestic fuel prices on national oil companies," Energy Economics, Elsevier, vol. 68(C), pages 566-578.
    15. Aidan R. Vining & David L. Weimer, 2016. "The challenges of fractionalized property rights in public‐private hybrid organizations: The good, the bad, and the ugly," Regulation & Governance, John Wiley & Sons, vol. 10(2), pages 161-178, June.
    16. Ghoddusi, Hamed & Moghaddam, Hussein & Wirl, Franz, 2022. "Going downstream – An economical option for oil and gas exporting countries?," Energy Policy, Elsevier, vol. 161(C).
    17. Matuszak, Piotr & Kabaciński, Bartosz, 2021. "Non-commercial goals and financial performance of state-owned enterprises – some evidence from the electricity sector in the EU countries," Journal of Comparative Economics, Elsevier, vol. 49(4), pages 1068-1087.
    18. Wang, Xiao & Zhang, Chuanguo, 2014. "The impacts of global oil price shocks on China׳s fundamental industries," Energy Policy, Elsevier, vol. 68(C), pages 394-402.
    19. Gong, Binlei, 2020. "Multi-dimensional interactions in the oilfield market: A jackknife model averaging approach of spatial productivity analysis," Energy Economics, Elsevier, vol. 86(C).
    20. Jim Krane, 2015. "Stability versus Sustainability: Energy Policy in the Gulf Monarchies," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stacy Eller & Peter Hartley & Kenneth Medlock, 2011. "Empirical evidence on the operational efficiency of National Oil Companies," Empirical Economics, Springer, vol. 40(3), pages 623-643, May.
    2. Sickles, Robin C. & Song, Wonho & Zelenyuk, Valentin, 2018. "Econometric Analysis of Productivity: Theory and Implementation in R," Working Papers 18-008, Rice University, Department of Economics.
    3. Collier, Trevor & Johnson, Andrew L. & Ruggiero, John, 2011. "Technical efficiency estimation with multiple inputs and multiple outputs using regression analysis," European Journal of Operational Research, Elsevier, vol. 208(2), pages 153-160, January.
    4. Farsi, Mehdi & Filippini, Massimo, 2009. "An analysis of cost efficiency in Swiss multi-utilities," Energy Economics, Elsevier, vol. 31(2), pages 306-315, March.
    5. Marvin A. Titus & Adriana Vamosiu & Shannon Hayes Buenaflor & Casey Maliszewski Lukszo, 2021. "Persistent Cost Efficiency at Public Community Colleges in the US: A Stochastic Frontier Analysis," Research in Higher Education, Springer;Association for Institutional Research, vol. 62(8), pages 1168-1197, December.
    6. William Greene, 2004. "Distinguishing between heterogeneity and inefficiency: stochastic frontier analysis of the World Health Organization's panel data on national health care systems," Health Economics, John Wiley & Sons, Ltd., vol. 13(10), pages 959-980, October.
    7. Idaira Cabrera‐Suárez & Jorge V. Pérez‐Rodríguez, 2021. "Bank branch performance and cost efficiency: A stochastic frontier panel data approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 5850-5863, October.
    8. Martini, Gianmaria & Scotti, Davide & Viola, Domenico & Vittadini, Giorgio, 2020. "Persistent and temporary inefficiency in airport cost function: An application to Italy," Transportation Research Part A: Policy and Practice, Elsevier, vol. 132(C), pages 999-1019.
    9. Belotti, Federico & Ilardi, Giuseppe, 2018. "Consistent inference in fixed-effects stochastic frontier models," Journal of Econometrics, Elsevier, vol. 202(2), pages 161-177.
    10. Roberto Colombi & Gianmaria Martini & Giorgio Vittadini, 2017. "Determinants of transient and persistent hospital efficiency: The case of Italy," Health Economics, John Wiley & Sons, Ltd., vol. 26(S2), pages 5-22, September.
    11. Giannis Karagiannis & Vangelis Tzouvelekas, 1999. "Measuring Technical Efficiency with Panel Data: Results from Competing Models," Working Papers 9914, University of Crete, Department of Economics.
    12. Massimo Filippini & William Greene, 2016. "Persistent and transient productive inefficiency: a maximum simulated likelihood approach," Journal of Productivity Analysis, Springer, vol. 45(2), pages 187-196, April.
    13. Sickles, Robin C. & Hao, Jiaqi & Shang, Chenjun, 2015. "Panel Data and Productivity Measurement," Working Papers 15-018, Rice University, Department of Economics.
    14. Viktoriya Galushko & Samuel Gamtessa, 2022. "Impact of Climate Change on Productivity and Technical Efficiency in Canadian Crop Production," Sustainability, MDPI, vol. 14(7), pages 1-21, April.
    15. Bernini, Cristina & Cerqua, Augusto & Pellegrini, Guido, 2017. "Public subsidies, TFP and efficiency: A tale of complex relationships," Research Policy, Elsevier, vol. 46(4), pages 751-767.
    16. Dilawar Khan & Muhammad Nouman & Arif Ullah, 2023. "Assessing the impact of technological innovation on technically derived energy efficiency: a multivariate co-integration analysis of the agricultural sector in South Asia," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(4), pages 3723-3745, April.
    17. Vanesa D’Elia & Gustavo Ferro, 2019. "Empirical Efficiency Measurement in Higher Education: An Overview," CEMA Working Papers: Serie Documentos de Trabajo. 708, Universidad del CEMA.
    18. Li, Hong-Zhou & Kopsakangas-Savolainen, Maria & Xiao, Xing-Zhi & Tian, Zhen-Zhen & Yang, Xiao-Yuan & Wang, Jian-Lin, 2016. "Cost efficiency of electric grid utilities in China: A comparison of estimates from SFA–MLE, SFA–Bayes and StoNED–CNLS," Energy Economics, Elsevier, vol. 55(C), pages 272-283.
    19. Valentin Zelenyuk & Zhichao Wang, 2023. "Random vs. Explained Inefficiency in Stochastic Frontier Analysis: The Case of Queensland Hospitals," CEPA Working Papers Series WP052023, School of Economics, University of Queensland, Australia.
    20. Hailu, Kidanemariam Berhe & Tanaka, Makoto, 2015. "A “true” random effects stochastic frontier analysis for technical efficiency and heterogeneity: Evidence from manufacturing firms in Ethiopia," Economic Modelling, Elsevier, vol. 50(C), pages 179-192.

    More about this item

    Keywords

    National Oil Company; Government ownership; Revenue efficiency; Data envelopment; Stochastic Frontier;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:enejou:v:34:y:2013:i:2:p:27-58. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.