Petroleum Monopolies of the Capitalist Countries
Petroleum Monopolies of the Capitalist Countries
The petroleum economy of the capitalist countries is the sphere of activity of powerful monopolies. The petroleum industry is dominated by slightly more than ten international trusts, which significantly surpass the monopolies of other sectors in terms of financial power, capacity of production facilities, and ranking in world production and trade. In 1972 there were nine petroleum companies among the 20 largest industrial monopolies. In terms of assets, the Exxon Corporation (until Jan. 1, 1973, Standard Oil Company [New Jersey]) and the Royal Dutch-Shell Group occupy first and third place among capitalist industrial monopolies. In Belgium, Petrofina is the country’s largest monopoly. In France two of the five largest industrial companies are petroleum companies.
American and British monopolies predominate in the petroleum industry. Five American, one British, and one British-Dutch company are members of the international petroleum cartel. In addition, the American “independent” monopolies, which became particularly important after the 1950’s in connection with the discovery of new oil fields, also occupy important positions. Among them are the Standard Oil Company (Indiana Corporation), Occidental Petroleum, and the Continental Oil Company. Among the state-controlled companies that gained strength in the 1950’s and 1960’s and now occupy an important position in the petroleum industry of the developed capitalist
|Table 1. Largest petroleum monopolies of the capitalist world in 1972 (in order of decreasing turnover)|
|Year of establishment||Number of employees||Assets (million dollars)||Turnover (million dollars)||Net profit (million dollars)|
|Exxon Corporation ..........||1882||141,000||21,558||20,310||1,532|
|Mobil Oil ..........||1882||75,400||9,217||9,166||574|
|Gulf Oil ..........||1907||57,500||9,324||6,243||197|
|Standard Oil Company of California ..........||1879||41,500||8,084||5,829||547|
|Standard Oil Company (Indiana) ..........||1889||46,600||6,186||4,503||375|
|Royal Dutch-Shell Group (Great Britain, Netherlands) ..........||1907||174,000||20,067||14,060||705|
|British Petroleum (Great Britain) ..........||1909||70,000||8,161||5,712||176|
|Compagnie Francaise des Petroles (France) ..........||1924||24,000||3,926||2,806||115|
|ENI (Italy) ..........||1953||78,900||7,089||2,748||18|
|Elf-ERAP (France) ..........||1960||20,400||3,693||2,396||11|
|Petrofina (Belgium) ..........||1920||23,300||2,090||1,566||70|
countries are ENI (Ente Nazionale Idrocarbury) in Italy and Elf-ERAP in France. However, these companies are much smaller than the American and British monopolies (see Table 1) and do not exercise as much influence on the industry.
The leading position of the largest petroleum monopolies is based mainly on exploitation of natural and human resources outside their own countries. A predominant form of their economic expansion into foreign countries is the export of capital. Among the leading petroleum monopolies of the USA and Great Britain, 50–80 percent of their assets are invested abroad. Up to 75 percent of all production and petroleum-refining operations of the Exxon Corporation and Mobil Oil monopolies are conducted outside the USA. British Petroleum has concentrated 100 percent of its oil production and 80 percent of its refining operations abroad (as of 1972). Branches of American and British petroleum monopolies are among the leading petroleum firms of such countries as France, Italy, and the Federal Republic of Germany.
The establishment of the American and British petroleum monopolies and their almost half-century-long domination of the capitalist petroleum economy were based on their seizure and subsequent division among themselves of major oil fields in developing countries. Until the 1970’s, 90 percent of all oil in Iran was produced by the International Oil Consortium, consisting of the Exxon Corporation (with a 7 percent share), Mobil Oil (7 percent), the Standard Oil Company of California (7 percent), Texaco (7 percent), Gulf Oil (7 percent), British Petroleum (40 percent), Royal Dutch-Shell (14 percent), Compagnie Française des Pétroles (6 percent), and nine independent American companies (5 percent). In Saudi Arabia, the petroleum industry was dominated by the Arabian-American Oil Company (Aramco), consisting of Exxon Corporation (30 percent), Standard Oil Company of California (30 percent), Texaco (30 percent), and Mobil Oil (10 percent). In Kuwait the Kuwait Oil Company was held jointly by Gulf and British Petroleum. Until mid-1972 all oil in Iraq was produced by the Iraq Petroleum Company (now nationalized), in which 23.75 percent of the stock was owned by British Petroleum, 23.75 percent by Royal Dutch-Shell, and 23.75 percent by the Exxon Corporation and Mobil Oil.
The largest petroleum monopolies not only are petroleum suppliers but also control a large part of the production and sales of petroleum products in consumer countries.
Petroleum monopolies are companies with coordinated production programs spread throughout the capitalist world in a network of production, transportation, sales, research, and other enterprises. They control all operations, from exploration, production, and transportation of oil to manufacture and sales of petroleum and petrochemical products. Such an organization provides a high degree of flexibility in case of a change in economic conditions; it also places all earnings from various subdivisions of the industry in a common corporate treasury.
Among the ten monopolies showing the largest net earnings are five petroleum monopolies. Petroleum monopolies form the basis of industrial empires owned by the most powerful financial groups of the capitalist world. Four of the leading petroleum monopolies in the USA are part of the sphere of influence of the Rockefeller and Morgan families. A large part of the shares of British Petroleum and Compagnie Française des Pétroles is owned by the state.
The strong influence of petroleum monopolies on the foreign policy of the capitalist countries results from dependence on foreign sources of raw materials and foreign markets and from ties to leading financial groups. Petroleum monopolies played an important role in a number of acts of imperialist aggression (suppression of Iran’s attempts at nationalization of the petroleum industry during the 1950’s; the Middle East crisis).
The capitalist petroleum economy is developing in a climate of fierce competitive struggle, both within the international petroleum cartel and between the cartel and outside monopolies. Before World War II (1939–45) and during the first few years after the war the sharpest conflicts within the cartel were taking place between its British and American members.
The conflict between cartel members and outsiders—American independent petroleum monopolies and particularly the monopolies of France, Italy, and the Federal Republic of Germany—became more acute in the 1950’s. From 1960 on, a weakening of the monopolies’ position was observed in oil-producing countries, who were intensifying their fight for economic independence and whose governments were increasing their interests in the petroleum industry. The National Iranian Oil Company, established in Iran in 1951, produces oil independently and in partnership with foreign companies. State-controlled companies have been established in Kuwait (1960), Saudi Arabia (1962), Algeria (1963), and Iraq (1964). The struggle of state capitalism in the developing countries for limitation of the activity of the petroleum monopolies and for strengthening the rights of the state is now organized on an international scale. The Organization of Petroleum Exporting Countries (OPEC) was founded in 1960 on the initiative of Iraq, Iran, Kuwait, Saudi Arabia, and Venezuela; Qatar, Indonesia, Libya, Abu Dhabi, Nigeria, Algeria, and Ecuador subsequently became members. In 1962, OPEC was registered with the Secretariat of the United Nations as a fully accredited intergovernmental association. OPEC’s goals are to provide for the participation of petroleum-producing countries in the exploitation of their petroleum resources and to transfer control of the national petroleum industries to the governments of the countries. In the late 1960’s and early 1970’s royalty agreements were reached that defined the participation of oil-producing countries in petroleum production conducted on the basis of earlier concession contracts with the petroleum monopolies. The conditions of renegotiated agreements became increasingly favorable to the oil-producing countries. In a number of countries the property of foreign companies was nationalized completely (Iraq, 1972) or partially. Agreements between nine petroleum monopolies and Saudi Arabia, Kuwait, Qatar, and Abu Dhabi, providing for participation of the states in the capital funds of affiliated companies established by petroleum monopolies for the production of oil in the states, became effective in January 1973. According to these agreements, the state companies were to own 25 percent of the capital of the companies affiliated with monopolies beginning in 1973 and 51 percent by 1982. In early 1974, Kuwait achieved an increase to 60 percent in its share in Kuwait Oil.
In the early 1970’s the largest petroleum monopoly, the Exxon Corporation, accounted for 16 percent of the production and 15 percent of the refining of petroleum in the capitalist world (287 million tons and 257 million tons, respectively, in 1972). Among OPEC member countries its share was 18.3 percent of oil production and 19.7 percent of petroleum refining (1969). Exxon controls 70 oil refineries, 64 petrochemical enterprises, and petroleum products pipelines; it uses owned and leased tankers with a deadweight of more than 20 million tons and has service stations in almost every capitalist country. The company controls reserves estimated at 6.5 billion tons, 90 percent of which are located in foreign countries. Exxon is the chief participant in most of the cartel agreements concluded by the petroleum monopolies of the USA and Great Britain for joint exploitation of the oil resources of capitalist countries. Exxon is controlled by the Rockefeller family.
The second largest monopoly in the capitalist world and the largest monopoly in Europe is the Royal Dutch-Shell Group. It is controlled by two companies that were merged in 1907—the British firm Shell Transport and Trading and the Dutch firm Royal Dutch Petroleum. The partners share, on a 40:60 basis, all assets, earnings, and losses of all companies that are in the sphere of influence of the monopoly. After World War II some groups representing France and the USA had acquired some stock and bonds of the controlling companies; as a consequence, French and particularly American monopoly capital interests became highly influential within the Royal Dutch-Shell Group. Royal Dutch-Shell produces oil in Iran, Venezuela, Nigeria, and other countries. It has refineries and petrochemical enterprises in large industrial centers of Great Britain, the Netherlands, France, Italy, the Federal Republic of Germany, the USA, and Japan. In 1972 the monopoly produced 225 million tons of petroleum and refined 257 million tons. As of 1969 its share of oil production among the OPEC countries was 11.5 percent; its share of petroleum refining was 12.7 percent for that year. The sphere of influence of the monopoly includes more than 500 companies.
British Petroleum (until 1954, Anglo-Iranian Oil Company) is an outgrowth of a concession for exploitation of oil fields obtained by the British from Iran in 1901. In 1954, as a result of pressure exerted by the American petroleum trusts, British Petroleum was forced to assign the exploitation rights for Iran oil fields to the International Oil Consortium. In 1972 its petroleum production and refining were 230 million tons and 120 million tons, respectively. The major stockholder of British Petroleum is the British government; in 1971 it held 48.4 percent of the stock.
The Texaco monopoly, controlled by a Chicago financial group, produced 169 million tons of petroleum and refined 148 million tons in 1972. Its exploitation of foreign oil deposits (in Iran, Venezuela, Libya, Saudi Arabia, Indonesia, and other countries) provided more than 70 percent of its production. In 1969 its share of the petroleum production of the OPEC countries was 8.7 percent.
The basis for the postwar development of the Gulf Oil Company, which produced 161 million tons of petroleum and refined 87 million tons in 1972, was the exploitation of Kuwait oil fields. In Kuwait, Gulf Oil and British Petroleum monopolized the production of oil. Gulf also produces oil in Iran, Venezuela, and other developing countries. In the OPEC countries its share of oil production is 9.5 percent, and its share of petroleum refining is 7.1 percent. Gulf Oil is the largest industrial company of the Mellon financial group.
The Standard Oil Company of California is one of the leading firms in the Rockefeller petroleum empire. Its 1972 oil production and petroleum refining were 166 million tons and 102 million tons, respectively. About 80 percent of the oil produced by Standard comes from the eastern hemisphere, mainly Saudi Arabia, Iran, and Indonesia. As of early 1973, Standard had more than 80 daughter companies and branches in 60 countries of the capitalist world.
In 1972 the Mobil Oil Company produced 110 million tons of petroleum and refined 112 million tons. More than 75 percent of total oil production comes from deposits in Iran, Saudi Arabia, and Qatar and a number of countries of Latin America and Africa. In the mid-1960’s, Mobil strengthened its position in the main markets for petroleum products (particularly in Western Europe), increased the capacity of its petroleum refineries, and expanded its distribution network. Mobil is a descendant of the Standard Oil trust and is controlled by the Rockefellers.
The Standard Oil Company of Indiana is the largest of the outsiders. It differs from the members of the international petroleum cartel in that its growth was based on exploitation of the petroleum resources of the USA, which in the early 1970’s accounted for 80 percent of its petroleum production and more than 90 percent of its refining. In the late 1950’s, Standard began a vigorous penetration of the main regions of oil production and consumption in the eastern hemisphere. Specifically, it acquired a share in the International Oil Consortium and established a number of daughter companies in Great Britain, Italy, Switzerland, and other countries. The monopoly is controlled by the Rockefeller financial group and by others.
The state-controlled oil and gas association ENI is one of the most active outsiders, the largest petroleum monopoly and one of the leading industrial monopolies in Italy. The transformation of ENI into a leading international petroleum monopoly began in the late 1950’s against the background of a fierce competitive struggle against the members of the international petroleum cartel. In the fight for raw-material sources, ENI was the first to change the customary concession agreements concluded by the cartel members, offering instead collaboration in exploration, production, and refining and more favorable profit-sharing conditions. As a result, in 1958, ENI gained access to the oil fields of Iran, and in subsequent years it became a part of the petroleum industries of Senegal, Libya, Tunisia, and the Sudan. Relying on government support, ENI was able to place significant limitations on the influence of British and American monopolies on Italy’s management of petroleum resources. ENI controls more than 25 percent of the Italian petroleum-products market.
I. M. REZNIKOVA