fossilfuelopolis

Prospecting the academic grounds on global energies patterns

The Seven Sisters

The history of the supermajors traces back to the Seven Sisters, the seven oil companies which formed the Consortium of Iran cartel and dominated the global petroleum industry from the mid-1940s to the 1970s.

The Seven Sisters were:

  • The Anglo-Persian Oil Company (now BP)
  • Gulf Oil, Standard Oil of California (Socal), and Texaco (Now Chevron)
  • Royal Dutch Shell
  • Standard Oil of New Jersey (Esso) and Standard Oil Company of New York (Socony) (now ExxonMobil)

Before the oil crisis of 1973 the members of the Seven Sisters controlled around 85% of the world oil reserves. The currently known today as super-majors began to emerge in the late 90s, in response to the fall in oil prices. Large petroleum companies began to merge, often in a effort to improve economies of scale, hedge against oil price volatility and reduce large cash reserves through reinvestment.

The following major mergers and acquisitions of oil and gas companies took place between 1998 and 2002:

  • BP’s acquisitions of Amoco in 1998 and of ARCO in 2000;
  • Exxon’s merger with Mobil in 1999, forming ExxonMobil;
  • Total’s merger with Petrofina in 1999 and with Elf Aquitaine in 2000, with the resulting company subsequently renamed Total S.A.;
  • Chevron’s acquisition of Texaco in 2001; and
  • the merger of  Conoco Inc  and Philips Petroleum Company in 2002, forming ConocoPhillips.

This process of consolidation created some of the largest global corporations as defined by the Forbes ranking, and as of 2007 all were within the top 25. Between 2004 and 2007 the profits of the six supermajors totaled US$494.8 billion. That is in those three years of increasing oil price, the six largest oil companies (IOCs) made in profits he equivalent of the Chinese GNP of 2009 (4,822,913 millions US$) (this page indicates the biggest worldwide companies)

Scholars acknowledge today the growing power of NOCs which have to be distinguished from OPEC.

The  Financial Times has used the label The New Seven Sisters to refer to a group of what it argues are the most influential national oil and gas companies based in countries outside of the OCDE, namely CNPC (China), Gazprom(Russia), National Iranian Oil Company  (Iran), Petrobras (Brazil), PDVSA (Venezuela), Petronas (Malaysia), Saudi Aramco (Saudi Arabia).

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