After thumbing through the national oil companies (NOCs), you may feel as if nothing is left in the pot for energy investors. Fortunately, that isn’t the case. More and more, NOCs are migrating out of their domestic comfort zones into up-and-coming oil and gas hot spots.
Thanks to the development of unconventional oil and gas resources in North America, state-backed companies are making an appearance. Often they have an ulterior motive pushing them into the U.S. and Canadian oil patch. China, for example, has the largest amount of shale gas resources in the world.
The Energy Information Administration reported in 2011 that China holds 1.3 quadrillion cubic feet of recoverable shale gas. All of it, unfortunately, is locked underground until Chinese companies develop the technology to extract it. And they’re buying U.S. companies to get that expertise.
Many energy investors have a bullish outlook on non-OPEC supply. Actually, OPEC shares the same sentiment. In OPEC’s World Oil Outlook 2012, non-OPEC liquids supply is projected to outpace OPEC’s own supply growth. This table shows you the long-term growth in OECD supply to 2035.
| Source | 2010 | 2015 | 2020 | 2025 | 2030 | 2035 |
|---|---|---|---|---|---|---|
| OECD | 20.0 | 21.8 | 22.6 | 23.3 | 24.1 | 24.9 |
| Developing countries, excluding OPEC | 16.9 | 17.8 | 19.2 | 19.3 | 19.1 | 19.3 |
| Eurasia | 13.4 | 13.9 | 14.3 | 14.7 | 15.1 | 15.5 |
| Processing gains | 2.1 | 2.4 | 2.6 | 2.7 | 2.9 | 3.0 |
| Total non-OPEC supply | 52.4 | 55.7 | 58.7 | 60.0 | 61.2 | 62.7 |
| OPEC natural gas liquids (NGLs) | 4.9 | 6.2 | 7.2 | 8.0 | 8.9 | 9.4 |
| OPEC crude | 29.3 | 29.6 | 30.9 | 32.5 | 33.8 | 34.9 |
| Total OPEC supply | 34.2 | 35.8 | 38.1 | 40.5 | 42.7 | 44.3 |
From a trading perspective, you may strongly consider looking at a different playing field of oil and gas companies — the ones that don’t answer to the government.