insufficient post-offering data available for a meaningful comparison. The full dataset
of initial and follow-on offerings covers 283 observation years. Of the 27 companies
that could have made follow-up offerings after the initial SIP, only eight have (so far)
chosen not to do so, four of which were listed only recently, i.e. post 2003. The 19
other companies on average had two follow-on offerings, the maximum number being
four. There is little evidence of a common pattern in the timing of such follow-ons: on
average, they have been approximately three years apart from each other, but with a
wide range (1 to 9 years), and irrespective of the rank of such offerings. There is also
no consistent indication as to the size of follow-on offerings relative to initial SIPs.
IV. Initial share-issue privatisations
Based on this dataset we test whether the privatisation of NOCs is empirically
associated with, or even the cause for, (1) increases in profitability, (2) increases in
efficiency and labour productivity, (3) increases in capital investment, (4) increases in
output, (5) decreases in employment, (6) decreases in financial leverage, and (7)
increases in dividend payments. For that purpose a total of 22 empirical proxies are
calculated for each privatised NOC:
Profitability: return on sales, return on assets, return on equity.
Operating efficiency: sales per employee, net profit per employee, physical output per employee (output defined as the sum of oil and gas either produced or refined), finding and development costs per barrel (‘F&D costs per boe’), production costs per barrel, reserve replacement ratio (‘RRR’).10
Capital investment: capital expenditure, capex over sales, capex over assets.
Output: physical output (see above), monetary sales.
10 Production costs, F&D costs and RRR are best sourced for companies with a (primary or secondary) U.S. listing, where the SEC requires standardised disclosures of oil and gas producers in accordance with FASB No. 69. Data on other firms, if available, might not be equally standardised and reliable.