This paper examines the genesis of national oil companies (NOCs) and the political economy underpinning the diverse forms in which they are structured and operate. It also examines how they contribute to the development needs of the countries that have established them. The paper draws mainly from a desk review of relevant literature, institutional records and interviews from selected knowledgeable informants, and it aims to promote informed dialogue on this subject that has caught the attention of stakeholders in Tanzania in recent years following the discovery of a substantial amount of natural gas in the deep sea. The underlying proposition is that the benefits of hydrocarbon to the country can be maximized when a NOC exists, but it must operate within a robust institutional framework. As the case studies demonstrate, the robustness of the institutional framework, in turn, depends on the historical trajectory, broader institutional landscape and political economy underpinning the country’s development path. The authors argue that the Tanzanian NOC has vast potential for contributing to economic transformation in the country given the vast hydrocarbon resources, provided that the proper institutional and policy conditions are put in place.