National Oil Companies ("NOCs") play an important role in a country's petroleum industry. Their relationship with their government is much more complicated than those between commercial oil companies and their shareholders due to the government's multi-dimensional role as a shareholder, resource owner, and regulator. As a result, NOCs usually take non-commercial responsibilities and their governments often employ more proactive measures to intervene. Driven by a wide range of factors, the constant revision of their relationship is a crucial component of the petroleum sector reform.The aim of the thesis is to analyse the effectiveness of NOC reform in achieving respective objectives (both commercial and non-commercial) of governments, and the major factors contributing to that effectiveness or lack of it. The thesis looks at NOC reform to the regulatory framework, the industrial structure, the pricing and distribution system, and the fiscal and financial regimes. It examines the effectiveness of reforms by evaluating the effectiveness of the relationship between governments and NOCs, using the Principal and Agent theory. A case study approach and historical analysis approach are used in analysing NOC reforms in China during the years between 1949 and 2006.The thesis concludes that the regulatory capacity of government together with its social concerns in reforming oil pricing system are two major factors, which set the pace of NOC reform and decide the effectiveness of it. It therefore shows that NOC reform is often a long term process, as the build up of the regulatory capacity takes years or even decades, as demonstrated in the case of China. The thesis also developed a new analytical framework that can be used to study general NOC reforms in countries other than China.
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