When States Become Your Biggest Competitors and Partners
The new, opaque arena for resource competition. © Under Licence: RTK Graphica
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▦ OPINION | Arno Saffran & Michel Bonnant, Thu 23 Oct, 2025The New Rules of Extraction
For a generation, the leaders of Western oil, gas, and mining companies operated under a comforting assumption. The global resource landscape was liberalizing. Their competitive edge was built on superior technology, access to capital, and operational excellence. They partnered with governments, to be sure, but the playing field was slowly leveling. That assumption is now obsolete.
A new era of resource nationalism and state capitalism has decisively arrived. But this isn't the old, blunt nationalism of expropriation. It is a more sophisticated and potent model: state-backed entities have become full-spectrum competitors and unavoidable partners, reshaping the extractive value chain from the ground up.
Consider the evidence. Saudi Aramco is no longer just an oil producer; it is a vertically integrated energy conglomerate, leveraging its resource base to dominate global petrochemicals. In Azerbaijan, SOCAR operates as the nation's primary economic engine, controlling assets from pipeline networks to international trading desks. Commodity traders like Trafigura and Glencore wield influence that rivals many nations, while Chinese state-owned enterprises seamlessly integrate resource acquisition in Africa or South America into Beijing’s broader strategic goals, such as the Belt and Road Initiative. For these actors, commercial logic is deeply intertwined with, and often secondary to, national and geopolitical objectives.
This shift creates a fundamentally different calculus for Western majors and independents. The traditional competitive toolkit is no longer sufficient.
The nature of partnership has transformed
The standard joint venture or production-sharing agreement is often just the starting point. Today's most significant deals involve complex consortia where Western firms provide technology and operational prowess, while their state-backed partners provide access, manage political relationships, and often hold a controlling strategic interest. In this dynamic, the Western company is less a concession-holder and more a critical service provider to a sovereign agenda.
The competitive battleground has moved
Winning a bid based solely on financial terms or technical specifications is increasingly rare. The real contest now occurs in the 18 to 24 months *before* a formal tender is issued. This "pre-RFP" phase is where relationships are built, regulatory frameworks are shaped, and local content strategies are negotiated. Companies that fail to engage strategically at this early stage often find themselves submitting a perfect bid for a competition that has already been lost.
The profile of a successful leader in this sector must evolve
The classic expatriate country manager, skilled in logistics and operational management, is no longer adequate for the most critical business development roles. The new environment demands what I would call "commercial diplomats"—executives who are as adept at reading geopolitical shifts and building sovereign trust as they are at managing P&L statements. They require a deep, nuanced understanding of a partner's long-term national interests, not just their quarterly goals.
This is not a shadowy game; it is the new commercial reality. The greatest risk for companies today is a misalignment between their strategic ambitions and the human capability they deploy to achieve them. Placing a brilliant operational leader into a context that demands high-level political and commercial statecraft is a recipe for stalled projects and missed opportunities.
The companies that will thrive in this new age are those that recognize this human dimension. They will be the ones who intentionally seek out and empower leaders who can navigate this complex intersection of commerce and state strategy. Success will be determined by the ability to align corporate intent with on-the-ground reality, ensuring that the right person, with the right understanding and relationships, is in place to build the partnerships that truly last.
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ABOUT THE AUTHOR(S)
— Arno Saffran
Arno developed his approach through roles in client development (KPMG) and strategic commercial engagement (affiliated with advisories including Hakluyt), focusing on complex industrial and energy sectors.
VSG works across the extractive value chain, positioning people who form the critical bridge to early-stage relationships and commercial access in complex markets.
