IEA’s executive director Fatih Birol says the dynamic of the oil market is set to change given that the national oil companies (NOCs) – and not independent players – will continue to dominate investments in oil projects. (Photo by Reuters)
The International Energy Agency (IEA) says the national oil companies (NOCs) will continue to dominate upstream oil and gas investments if oil prices remain at current low levels. 
The IEA’s executive director Fatih Birol told Reuters in an interview that the dominance of NOCs in oil investment projects will create a new dynamic in the market. 
Birol added that that independent players like Anglo-Dutch Shell, US heavyweight ExxonMobil and France's Total have already scaled back their investments in upstream projects. He said this is due to falling profit margins caused by weak oil prices. 
Birol further emphasized that NOCs like Saudi Aramco, China's CNPC and Mexico's Pemex have raised their share of upstream investments to a 40-year high of 44 percent.  
On the same front, Reuters highlighted IEA figures as showing that more than $300 billion of upstream oil and gas money has been slashed in 2015 and 2016 – in what appears to be an unprecedented amount.
The largest cost cuts have been implemented by North American independent companies that include Apache, Murphy Oil, Devon Energy and Marathon. The IEA said the companies have all reduced spending by around 80 percent between 2014 and 2016.
The Agency further added, as Reuters reported, that NOCs in Saudi Arabia, the UAE and Qatar have increased their capital for fresh investments via government bond issues. This policy, it said, has allowed them to make up for lower oil revenue.
Birol also said that the oil market could soon enter a new dynamic in which production decisions are less driven by market fundamentals.
"There are some NOCs that take other factors into consideration when making decisions," Birol said, referring to internal economic or political issues as well as defense of market share.