Oil Companies

4 Key excerpts on "Oil Companies"

• 

  eBook - PDF

  The Politics of the Global Oil Industry

  An Introduction

  • Toyin Falola, Ann Genova(Authors)
  • 2005(Publication Date)
  • Praeger

    (Publisher)

  The Oil Companies operating through- out the world and the international organizations that formed around the 4 The Politics of the Global Oil Industry oil industry are discussed. After laying the groundwork, we reinforce our more generalized discussions of the politics of oil with specific exam- ples. Using seven countries as case studies (Iraq, Mexico, Nigeria, Norway, Russia, Saudi Arabia, and Venezuela), we highlight the opportunities and challenges these countries face because of their extensive oil reserves. While there are numerous oil-producing countries in the world, we chose to focus on the world's largest oil-producing and exporting countries, par- ticularly those that export petroleum products to the United States (see Figure 1.1). In many ways these countries acted as pioneers, taking the first step in a beneficial or harmful direction. Also, many of them are consid- ered developing countries because they have recently become independent, they have economic problems that cause the standard of living to be low, and their economies are often dependent on external markets. For these countries, economic and political stability in the face of a lucrative yet volatile industry such as petroleum has posed a real challenge. To understand the events that have unfolded in each of the chosen oil- producing countries, it is important to answer the three basic questions asked at the beginning of this chapter. First, what is petroleum? Many ge- ologists believe that petroleum, or oil (the terms are used interchange- ably), comes from the breakdown of plants and animals by some unknown process. Others, however, think that living things had nothing to do with its formation. Regardless of its origin, the mining of this so- called black gold has become the most lucrative and important industry in the world. Oil appears to form below the ground through tiny openings, or pores, in rock that are visible through a magnifying glass.

  Sign up to read

  Learn more about book
• 

  eBook - PDF

  Petropolitics

  Petroleum Development, Markets and Regulations, Alberta as an Illustrative History

  • Alan MacFadyen, G. Campbell Watkins(Authors)
  • 2014(Publication Date)
  • University of Calgary Press

    (Publisher)

  A smaller independent production company may confine its operations to finding and bringing petroleum to the surface. And, since most of these smaller firms do not have processing facilities of their own, the petroleum is delivered to gathering systems (oil) and gas-processing plants for treatment. But these processing costs come out of the producer’s pocket, and so, even though the company has no direct involvement with the processing of the petrol- eum, this activity can properly be included as part of the production process. Government-owned Oil Companies, some ver- tically integrated, have been popular in many parts of the world. In the industrialized western world, these have generally operated in competition with privately owned companies but have been established for a variety of reasons. For example, for strategic reasons, the government of the UK, in 1913, provided finan- cing and took over ownership control of the Anglo Persian Oil Company (the forefather of BP). Statoil in Norway was founded in 1972, and Petro-Canada in Canada in 1975, to increase domestic ownership in the petroleum industry and to provide a ‘window’ on industry activities. (Both BP and Petro-Canada have since been privatized.) Some developing nations, for example Brazil, have also established state-owned Oil Companies to operate in competition with privately owned companies (often with special advantages). Many developing countries (for example, most OPEC members) have established a government oil company (or nationalized private companies) to leave a single state oil company in operation. In conclusion, the consensus would be that all activities beginning with initial geological and geo- physical studies to determine whether there is petrol- eum underneath the surface up to the stage where the oil and gas is to be stored or transported to refiners or market should be classified as ‘crude petroleum production’ activity.

  Sign up to read

  Learn more about book
• 

  eBook - PDF

  Oil, Democracy, and Development in Africa

  • John R. Heilbrunn(Author)
  • 2014(Publication Date)
  • Cambridge University Press

    (Publisher)

  These relations are indicative of historical continuities that may influence how Africa’s oil sector develops in the future. The History of Oil Companies The history of international Oil Companies began when a small number of entre- preneurs established firms to market kerosene and oil as an industrial lubri- cant. By the mid-twentieth century, a few companies had established a cartel; its members shared information, controlled prices, and prevented opportunism and cheating with a credible threat of ostracism. 15 These companies dominated the production value chain; they controlled upstream processes including the exploration and production of crude oil as well as downstream operations that included methods of payments, the location of refineries, and sale of the product in brand name service stations. 16 This vertically integrated corpora- tion responded to competition among companies from different countries and the surge in demand for gasoline that popular marketing of the automobile created. Today, a multitude of highly differentiated firms operate worldwide; these range from large international oil corporations to small Oil Companies that operate in high-risk environments. The particular characteristics of the contemporary oil market evolved from a monopolistic corporate model spear- headed by Standard Oil Company. Standard Oil The story of Standard Oil is the tale of how John D. Rockefeller established international subsidiaries, divisions for production, refining, and sales, and 15 D.K. Osborne, “Cartel Problems,” The American Economic Review 66, 5 (December 1976): 835. 16 Michael E. Porter, Competitive Advantage: Creating and Sustaining Superior Performance (New York: The Free Press, 1985), 36. John R. Heilbrunn 82 then dominated the oil market worldwide. Standard Oil started as a business that sold a high-demand product on the international market.

  Sign up to read

  Learn more about book
• 

  eBook - ePub

  Oil

  • Gavin Bridge, Philippe Le Billon(Authors)
  • 2017(Publication Date)
  • Polity

    (Publisher)

  12

  Extending the network

  The production network we have outlined so far captures some of the most significant relations among states and firms. A critical aspect of the current political economy of oil, however, is the way the boundaries of this network are being challenged. The business of producing oil has become increasingly entangled with broader social issues like climate change, human rights, and financial speculation. NGOs and some governments are requiring Oil Companies to account for their contribution to social goals which extends well beyond producing, refining, and marketing oil. Increasingly, shareholder value is tied to a company’s performance on environmental and social grounds: the BP Deepwater Horizon explosion, for example, decreased the market valuation of BP by US$100 billion. More generally, Oil Companies’ records on the environment and working with communities can influence their ability to acquire licenses to operate in new areas. BP is reported to have lost out in bidding rounds for the Greenland offshore in 2010 because of its record in the Gulf of Mexico.

  At the same time, the identity of established actors is being renegotiated – and, along with it, a sense of their responsibilities and accountability. Some Oil Companies, for example, are reinventing themselves as “energy companies” as the role of oil in their portfolios declines. As BP has found, however, moving “beyond petroleum” is exceedingly tricky, as the resource base moves from conventional oil to heavier hydrocarbons, and exploration and production take place in more environmentally sensitive, politically troubled, and technologically challenging places. For companies like BP, Shell, and ExxonMobil, diversification beyond conventional oil has involved decisive moves into unconventional fossil fuels (such as bituminous sands and shale gas) and other forms of high-cost “extreme energy” (deepwater, Arctic) that dwarf their investments in lower-carbon alternatives. For every dollar the oil industry invested worldwide between 2006 and 2010 in renewable fuel development (corn ethanol, sugar cane ethanol and other biofuels: total US$3.9 billion), it spent nearly US$50 developing bituminous sands (US$190 billion), and US$500 on oil exploration and production overall (total US$2,090 billion).

  Sign up to read

  Learn more about book