Regional state energy firms are improving

MEED's third annual survey of the Middle East and North Africa's 11 major state-owned energy companies reveals a large disparity in their perceived performance.

The poll of companies that have recently worked with the region's national energy companies records both frustration with payments and praise for improved transparency in awards. Repeating its triumph in MEED's poll in 2007 and 2008, Saudi Aramco scores the highest overall mark of four out of a possible five.

The survey polled 10 key performance indicators. The highest average for a single key performance indicator was 3.27, for technology and the development of difficult-to-extract oil and gas reserves. The Middle East, in particular Oman, has emerged as a leader in enhanced oil recovery (EOR) as proven reserves become increasingly difficult to extract. Petroleum Development Oman scores full marks in the technology development category for its pioneering EOR work.

MEED's survey results suggest state-owned companies are becoming more comfortable with their hybrid status of being both state-run firms controlled to a certain extent by government policy, and commercial outfits with sufficient autonomy to act like private companies.

Last year, half of respondents said that national energy companies were poor at transparency, giving them a score of 2.5 out of a possible five. This year, the average score for transparency in contract awards and the tender process has risen to 3.2. Algeria's Sonatrach scores five points for this key performance indicator, with respondents praising the company's decision to modernise and make financial and technical data publicly available.

With the region's state-owned firms controlling two-thirds of the world's proven oil reserves, scrutiny will continue to grow.

There is significant room for improvement. It is the companies that work with the region's state energy firms that are best able to exert pressure for change.