Big Oil Facing Mounting Pressure from Nationalized Oil Companies

LITTLE FALLS, N.J., Sept. 8 -- The top MNCs in the global lubricants market are facing mounting competition from state-owned oil companies in developing nations around the world, and a new study by Kline & Company aims to analyze the impact this could have on global consumption, pricing, and supply.

Kline's study, Business Opportunities in the Emerging Lubricant Markets of South Asia, the Middle East, and Northern Africa, 2005-2015, will examine the factors contributing to the growth in lubricant consumption within these regions and present an independent appraisal of the market and key opportunities, including a look at the impact of the nationalized oil companies (NOCs).

"The NOCs have been around for years, but they have recently become more ambitious," says Geeta Agashe, director of the Petroleum & Energy practice for Kline's research division. "In the past, they were content to have a good market share in their own country, but they are now moving outside their borders to compete on a global scale."

Agashe will present an overview of the finished lubricants market and a sneak peek into this changing competitive landscape, based on preliminary findings from Kline's study at the ICIS Middle Eastern Base Oils & Lubricants Conference in Dubai on September 13 at 9:00 a.m.

"NOCs are growing bigger and stronger and are now flush with cash," Agashe says. "They are investing in technology, new refining capacity, and talented personnel -- even actively recruiting top brass from the multinationals. They are definitely becoming a competitive force to be reckoned with."

Not only are the oil majors facing a new threat to their market share, oil majors must also try to interpret the motives of the NOCs, which are not always the same as those of multinational companies.

"In the past, the top three or four companies could mostly predict how the others would behave, because they were all motivated by the same force-- profit," Agashe says. "But the NOCs are driven by other factors, including political objectives, public perception, and a desire to reduce dependence on foreign oil. It's a different paradigm than what the multinationals are accustomed to."

In addition to market data and analysis for each region, Kline's study will provide in-depth market profiles for India, Saudi Arabia, the United Arab Emirates, and Egypt, as well as numerous supplier profiles, including those of numerous NOCs.

"The competitive landscape is changing dramatically in this region, and the multinationals--who often focus on each other as competitors --are now facing an increased threat from these key regional NOCs," says Bill Downey, vice president and head of Kline's Petroleum & Energy consulting practice. "The multinationals are now competing with entities that have different motives, innovative strategies, and deep pockets. In order to grow profitably, the multinationals need to have a deep understanding of the NOC's positions and choose where they compete." Downey will serve as the Co-Chairman of the Dubai conference together with Dr. Nadim Nadjim of ADNOC.

Business Opportunities in the Emerging Lubricant Markets of South Asia, the Middle East, and Northern Africa, 2005-2015 will provide critical market and competitive intelligence required to formulate effective strategic and business plans for suppliers that are already participating in this market, as well as those that are contemplating market entry.

Established in 1959, Kline & Company (www.klinegroup.com) is an international business consulting and market research firm serving the petroleum and energy, specialty chemicals, life sciences, and consumer products industries.