Tuesday, December 22, 2009

delanceyplace.com 12/22/09 - oil

In today's excerpt - in the late 1990s, even
as the major U.S. oil companies merged to get
larger, their influence waned in the face of
foreign national oil companies. Of the
world's twenty largest oil
companies, fifteen are state-owned:

"[The need for significantly larger
investments in oil exploration and
development] created the imperative for what
became known as restructuring. The majors
combined
to become supermajors. BP merged with Amoco
to become BPAmoco, and then
merged with ARCO, and emerged as a much
bigger BP. Exxon and Mobil - once Standard
Oil of New Jersey and Standard Oil of New
York - became
ExxonMobil. Chevron and Texaco came together
as Chevron. Conoco combined with Phillips to
be ConocoPhillips. In Europe, what had once
been the two
separate French national champions, Total and
Elf Aquitaine, plus the Belgian
company Petrofina, combined to emerge as
Total. Only Royal Dutch Shell, already of
supermajor status on its own, remained as it
was. ... With all
these mergers, the landscape of the
international oil industry changed. ...

"It turned out that the restructuring of the
world oil industry that had started with the
emergence of the supermajors at the end of
the 1990s was only the beginning. One more
merger - of Norway's Statoil and Norsk Hydro
- created Statoilhydro, a new supermajor,
although partly state-owned. But the balance
between companies and governments has shifted
dramatically. Altogether, all the
oil that the supermajors produce for their
own account is less than 15 percent
of total world supplies. Over 80 percent of
world reserves are controlled by governments
and their national oil companies. Of the
world's twenty largest oil
companies, fifteen are state-owned. Thus,
much of what happens to oil is the result of
decisions of one kind or another made by
governments. And overall, the
government-owned national oil companies have
assumed a preeminent role in
the world oil industry. ...

"Saudi Aramco - the successor to Aramco, now
state-owned - remains
by far the largest upstream oil company in
the world, single-handedly producing
about 10 percent or more of the world's
entire oil with a massive deployment
of technology and coordination. The major
Persian Gulf producers control for
the most part their production, as do the
traditional state companies in
Venezuela, Mexico, Algeria, and many other
countries. The Chinese companies - partly
state-owned, partly owned by shareholders
around the world -
continue to produce the majority of oil in
China but have also become
increasingly active and visible in the
international arena. So have Indian
companies. The Russian industry is led by
state-controlled giants Gazprom and Rosneft
and by privately held companies, such as
Lukoil and TNK-BP, that are
majors in their own right.

"Petrobras, the Brazilian national oil
company, is 68 percent owned
by investors and 32 percent by the Brazilian
government, though the government retains the
majority of the voting shares. Petrobras had
already established itself at the forefront
in terms of capabilities in exploring for and
developing oil in the challenging deep waters
offshore. Beginning with the Tupi
find in 2006, potentially very large
discoveries are being made in what had
heretofore been inaccessible resources in
Brazil's deep waters, below salt deposits.
These discoveries could make Petrobras - and
Brazil - into a new powerhouse
of world oil. Malaysia's Petronas had turned
itself into a significant international
company, operating in 32 countries outside
Malaysia. State companies in other
countries in the former Soviet
Union - KazMunayGas in Kazakhstan and
SOCAR in Azerbaijan - have also emerged as
important players. While Qatar is
an oil exporter, its massive natural gas
reserves put it at the forefront of the
liquefied natural gas industry (LNG) and,
along with Algeria's Sonatrach and other
exporters, at the center of growing global
trade in natural gas."

Daniel Yergin, The Prize, new 2009
epilogue, Free Press, Copyright 1991, 1992,
2009 by Daniel Yergin, pp 765-770.


1 Comments:

Blogger tiffany said...

Francisco Ebeling of the Brazilian Institute of Oil, Gas and Biofuels explains the true significance of offshore pre-salt oil discoveries

http://www.alternativelatininvestor.com/commodities.php

4:19 PM  

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