Chinese Listed National Oil Companies: an Analysis of the Minor Shareholder within an Agency Theory Framework
During the period of economic reforms Chinese National Oil Companies (NOCs) became involved in a process of corporatization. This led to an Initial Public Offering (IPO) of three major Chinese NOCs in the beginning of 2000. After the IPO, along with the State as a major shareholder, Chinese NOCs obtained private shareholders. In a framework of an Agency theory one concludes that Chinese listed NOCs as Agents obtained Multiple Principals (State and Private Shareholders). This Thesis attempts to reveal the influence of the Second Principal on the Corporate Governance of listed NOCs. This is done by using the method of regression analysis to measure the interrelation between the amount of Private Shareholders and different financial and non-financial parameters (i.e. expenses for social services) of NOCs as well as detailed presentation of measures that have been taken to protect Private Shareholders’ rights for a period of 15 years of IPO (2000-2015). Having this information I could conclude on distinctive features of marketization of Chinese NOCs and Energy Sector, seen through the perspective of Corporate Governance. In order to support the findings, I also conducted interviews with the industry insiders and academics related to the Energy Sector. Findings of the research prove that the management of NOCs as Agent tends to take favorable measures for the Second Principal. However, Private Shareholders that are qualified for voting in the Company usually do not use this privilege.