State-Owned Companies

Facebook logoTwitter logo

State-owned petroleum or mining companies (SOCs) are present in 45 of the 58 RGI countries and often play an influential role in sector governance. SOCs bring in more than two thirds of total government revenue in countries including Azerbaijan, Iraq and Yemen. In the mining sector, Chile's Codelco is the largest producer of copper in the world, Botswana's partially state-owned Debswana is the leading producer of diamonds and Morocco's OCP is the largest company in the country and the main producer of phosphates in the world. In countries like Angola and Nigeria, SOC functions and influence stretch across the sector—from licensing and production, to revenue collection and even direct expenditures. Given their unique institutional status and frequently high levels of authority, SOCs often operate with limited oversight and accountability.

  Figure 1: State-Owned Companies: ranking and scores

Note: The table below (Figure 2) provides the name of each SOC assessed by the Index. For more detail, go to the RGI Data Tool

The variation in SOC scores shows that transparency can be commercially feasible but that it has not been fully embraced by many companies (see Figure 1). Top performers such as Statoil (Norway), Pemex (Mexico) and Petrobras (Brazil) share several practices that enhance SOC accountability: legal requirements to publish reports; disclosure of audits and data on production and revenues; transparency in the risk-laden area of extra-budgetary spending; compliance with international accounting standards; and the inclusion of SOC financial information in the national budget. Many others fall short: 18 out of 45 SOCs are under no legal obligation to report information about their operations and 28 fail to provide comprehensive reports on their activities and finances.

Two additional shortcomings revealed by the Index represent further reform priorities for some countries. First, more than half of the companies assessed (25 out of 45), e.g. in Cameroon, do not publish audited reports or publish them more than two years late. Public disclosure of financial audits is a necessary complement to strong corporate governance and SOC accountability. Twenty of the companies do publish audits in a timely fashion, demonstrating that it is a feasible practice.

Second, in 36 out of 45 countries, governments rely on SOCs to provide a range of services – from infrastructure construction to social services to fuel subsidies – that fall outside their core business and would ordinarily be associated with government agencies. More than half of these companies (19 in total) report no or limited information on these “quasi-fiscal activities.” SOCs in Bolivia, Iran, Nigeria and Venezuela, for instance, provide subsidized oil or natural gas, but publish no information on these activities.

The RGI reveals the governance deficit exhibited by many SOCs, due in part to the weak performance on the indicators highlighted above. One observation about the top performers is worth noting as it may help to explain why they do not exhibit the otherwise very common shortcomings in SOC transparency and governance. Seven of the companies assessed are only partially owned by the government, i.e. they have a mix of private and state ownership. These companies boast an average score of 80. On the other hand, the 38 SOCs which are fully owned by the state receive an average score of just 46. Six of the seven mixed-ownership companies are listed on international stock exchanges, and therefore subject to regulations that require publication of financial statements. Debswana (Botswana) is the only partially state-owned company not listed on an international exchange, and it ranks poorly – 32nd out of 45. Pemex (Mexico) is the only high performing SOC that is entirely state-owned. While fully owned by the government, Pemex seeks financing through bonds in financial markets in New York and Mexico, which comes with the legal requirement to report about its operations and finances. It appears that the path to good reporting practices, in selected cases, involved international listing and financing requirements.

Figure 2: State-owned companies by country, ownership structure and commodity

Country State-owned company assessed by the Index[i] Ownership Commodity
Afghanistan Northern Coal Enterprise State-owned Minerals
Algeria Sonatrach State-owned Hydrocarbons
Angola Sonangol State-owned Hydrocarbons
Azerbaijan SOCAR State-owned Hydrocarbons
Bahrain BAPCO State-owned Hydrocarbons
Bolivia YPFB State-owned Hydrocarbons
Botswana Debswana Partially state-owned (50%) Minerals
Brazil Petrobras Partially state-owned (48% of voting shares and 64% of common shares) Hydrocarbons
Cameroon SNH State-owned Hydrocarbons
Chile CODELCO State-owned Minerals
China CNPC State-owned Hydrocarbons
Colombia Ecopetrol Partially-owned (90%) Hydrocarbons
Congo (DRC) Gecamines State-owned Minerals
Ecuador Petroecuador State-owned Hydrocarbons
Egypt EGPC State-owned Hydrocarbons
Equatorial Guinea GEPetrol State-owned Hydrocarbons
India ONGC Partially state-owned (74%) Hydrocarbons
Indonesia Pertamina State-owned Hydrocarbons
Iran NIOC State-owned Hydrocarbons
Iraq Ministry of Oil State-owned Hydrocarbons
Kazakhstan KazMunaiGaz State-owned Hydrocarbons
Kuwait KPC State-owned Hydrocarbons
Libya Libyan National Oil Corporation State-owned Hydrocarbons
Malaysia Petronas State-owned Hydrocarbons
Mexico Pemex State-owned Hydrocarbons
Mongolia Erdenes MGL State-owned Minerals
Morocco O.C.P. State-owned Minerals
Mozambique ENH State-owned Hydrocarbons
Myanmar MOGE State-owned Hydrocarbons
Nigeria NNPC State-owned Hydrocarbons
Norway Statoil Partially state-owned (67%) Hydrocarbons
Philippines PMDC State-owned Minerals
Papua New Guinea Petromin State-owned Minerals
Qatar Qatar Petroleum State-owned Hydrocarbons
Russia Rosneft Partially state-owned (50%) Hydrocarbons
Saudi Arabia ARAMCO State-owned Hydrocarbons
South Sudan Nile Petroleum State-owned Hydrocarbons
Tanzania STAMICO State-owned Minerals
Trinidad and Tobago Petrotrin State-owned Hydrocarbons
Turkmenistan Turkmengas State-owned Hydrocarbons
Venezuela PDVSA State-owned Hydrocarbons
Vietnam Petrovietnam State-owned Hydrocarbons
Yemen YOGC State-owned Hydrocarbons
Zambia ZCCM-IH Partially state-owned (88%) Minerals
Zimbabwe ZMDC State-owned Minerals

[i] Some countries have more than one state-owned company in the extractive sector. In these cases, the RGI focuses on the biggest producer of hydrocarbons or minerals. Countries with more than one SOC include: China (Petrochina which is partially state-owned (86%) and CNOOC which is wholly state-owned), Ecuador (Petroamazonas EP), Egypt (EGAS and GANOUPE), Iraq (North Oil, South Oil, Midland Oil, Missan Oil, SOMO which is Iraq's oil exporting arm), Russia (Gazprom which is partially state-owned (75%)), Trinidad and Tobago (NGC, NPC), Turkmenistan (Turkmenneft, Turkmenneftegaz) and Zimbabwe (ZMCC).