Big Oil Getting Smaller
Control of the world’s oil is in a smaller and smaller number of hands, writes Sacha Kumaria on Yale Global Online. Rising oil prices — analysts predict $100 per barrel by the end of 2007 — has fuelled increasing competition between independent oil companies (IOC’s) such as Exxon Mobil and national oil companies (NOC’s). However, the world’s largest oil companies plan for contraction rather than expansion of their holdings. The latest deal between Russian state-owned Gazprom and oil company Total thus marks a significant new trend: NOC’s in countries like Russia and Venezuela are demanding high payments from competing independent firms, forcing them to sell their refineries and pipelines. These high payments also reduce funds for research and development, a field of expertise previously dominated by IOC’s.
