The World According to NOV
Pete Miller Jr., the Chairman and CEO of National Oilwell Varco (NOV) was the guest speaker today at the meeting of the Houston Chapter of the American Petroleum Institute. Mr. Miller talked about the BRIC vs. MINT countries, and new frontiers in geology, markets and technology.
Economists, consultants and international observers have long touted the BRIC (Brazil, Russia, India and China) countries as the drivers of the future world economy. While all these countries are important they are not without their own challenges.
Brazil is a dynamic economy but growth is uneven. Nevertheless, it has abundant resources and will be a net exporter of energy. Unfortunately, the fruits of prosperity have not been evenly distributed and it remains a land of the very rich and the very poor with a miniscule middle class.
Russia also abounds in resources, but remains a commodity based economy. The country will continue to be a net exporter of energy for the foreseeable future, but here again, the benefits of economic growth seem to be confined to a relatively small number of people. Political uncertainty remains an issue as the government seems unpredictable as evidenced by recent events in the Crimea.
India is growing economically, but is energy resource constrained. It will continue to be a net importer and a huge market for energy producers.
China is an economic dynamo. A 5% economic growth rate is considered a mediocre year for them. However, they are energy poor and will be a net importer for the foreseeable future.
While the BRIC countries are each unique, they all are faced with popular unrest. Many of their citizens have not benefited from economic growth, and NOV sees political instability as a real possibility for all four of them.
Rather than the BRIC, NOV sees the MINT (Mexico, Indonesia, Nigeria and Turkey) countries as drivers of the future world economy.
Mexico obviously has its problems, but it has immense natural resources and cheap labor costs. In fact NOV has found that they can manufacture their products more economically in Mexico than in China. Further, they feel that it is much easier to do business in Spanish than in Mandarin.
Indonesia has natural resources, but their economic growth is such that demand for energy will increase dramatically.
Nigeria also has a wealth of natural resources and is an energy exporter. However, NOV sees it poised for a general economic boom as well.
Turkey is secular and relatively stable for their part of the world. The economic future is bright and they are near the energy reserves of Kurdistan, and the Caspian Basin.