Energy Working Group Talk: State Choices in Hydrocarbon Administration

Associate Director Mark Thurber discussed two related threads of PESD research on "State Choices in Hydrocarbon Administration."  The first part of the talk, based on a paper which Mark co-authored with PESD affiliated researchers David Hults and Patrick Heller, focused on how countries design institutions for administering their oil sectors.  It suggested that countries with certain institutional deficits may be better off not separating commercial functions from policy and regulatory ones in oil, even though the separation of functions approach (as pioneered by Norway) is generally considered "best practice" in oil sector administration. 

The second part of Mark's talk described statistical analysis he is performing to quantitatively test the hypothesis advanced by PESD consulting professor Pete Nolan that private oil companies will preferentially operate at "frontiers," for which state-controlled oil companies cannot adequately manage risks for their host governments.  Patterns of company operatorship of exploration wells in the 1970s and 1980s, derived from data from oil and gas research and consultancy company Wood Mackenzie, suggest that this hypothesis indeed was statistically supported for frontier exploration in deep water.